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State Tax Return Form

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State Tax Return Form

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

American Taxpayer Relief Act of 2012 (Pub. L. 112-240)

The American Taxpayer Relief Act of 2012 (Pub. L. 112-240) retroactively extends certain fuel tax credits that expired on Dec. 31, 2011. The retroactively extended fuel tax credits are the biodiesel mixture credit, biodiesel credit, alternative fuel credit and alternative fuel mixture credit. These credits are now scheduled to expire on Dec. 31, 2013.

These Q&As tell taxpayers how to claim the credits for qualifying sales or uses during 2012. They also describe changes to the cellulosic biofuel credit for 2013. 

More information on qualification for the credits is on Form 720, Quarterly Federal Excise Tax Return; Form 720X, Amended Quarterly Federal Excise Tax Return; Form 4136, Credit for Federal Tax Paid on Fuels; Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit; Form 8849, Claim for Refund of Excise Taxes; and Form 8864, Biodiesel and Renewable Diesel Fuels Credit.

Q1. How do I claim the biodiesel mixture (including renewable diesel mixture) credit for qualifying sales and uses during 2012? What is the deadline for filing a claim?

A1. Choose one of the following options to claim the credit:

OPTION 1: Follow the procedures in Notice 2013-26. These procedures allow all claims to be made on Form 8849 for all qualifying sales and uses in 2012. These claims must be made by July 1, 2013.

OPTION 2: If you do not make the claim by July 1, 2013, for sales and uses in 2012, follow the procedures below.

If you reported excise tax liability for gasoline, diesel fuel, or kerosene on Form 720 during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.

    • To amend your Form 720, file Form 720X in accordance with the instructions to that form.
    • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
    • If your biodiesel mixture (including renewable diesel mixture) credit exceeds the amount that you claim on Form 720X, you may claim that excess as an income tax credit on your 2012 federal income tax return by attaching to the return Form 4136 in accordance with the instructions for that form.
    • Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.

Q2. Do I need to submit Certificates for Biodiesel with my biodiesel mixture claims?

A2. Yes. See the instructions to Form 720, Form 8849, or Form 4136, as appropriate. If you did not receive certificates during 2012, the biodiesel producer may issue them to you now. However, the IRS cannot require biodiesel producers to issue a certificate.

Q3. How do I claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A3. You may claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching to the return Form 8864, in accordance with the instructions for that form. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 8864 to an amended income tax return.

Q4. How do I claim the alternative fuel credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A4. The term “alternative fuel” generally includes:

  • Liquefied petroleum gas.
  • P Series Fuels.
  • Compressed or liquefied natural gas.
  • Liquefied hydrogen.
  • Any liquid fuel which meets certain carbon recapture requirements and that is derived from coal (including peat) through the Fischer-Tropsch process.
  • Compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3)).
  • Liquid fuel derived from biomass (as defined in section 45K(c)(3)).

Choose one of the following options to claim the credit:

OPTION 1: Follow the procedures in Notice 2013-26. These procedures allow all claims to be made on Form 8849 for all qualifying sales and uses in 2012. These claims must be made by July 1, 2013.

OPTION 2: If you do not make the claim by July 1, 2013, for sales and uses in 2012, follow the procedures below.

    • If you reported excise tax liability for alternative fuel on Form 720 during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.
    • To amend your Form 720, file Form 720X in accordance with the instructions to that form.
    • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
    • If your alternative fuel credit exceeds the amount that you claim on Form 720X, you may claim the excess as an income tax credit on your 2012 federal income tax return by attaching to the return Form 4136 in accordance with the instructions for that form.
    • Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.

Q5. How do I claim the alternative fuel mixture credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A5. See below.

  • If you reported excise tax liability for gasoline, diesel fuel or kerosene on Form 720, during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the amount of those liabilities.
  • To amend your Form 720, file Form 720X in accordance with the instructions to the form.
  • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
  • You may claim the alternative fuel mixture credit only up to the amount of your tax liabilities for gasoline, diesel fuel or kerosene.
  • You may not claim any excess alternative fuel mixture credit on your income tax return or receive a payment for that amount. 

Q6. Do I have to be registered by IRS to claim the biodiesel mixture credit (including renewable diesel mixture credit), biodiesel credit (including renewable diesel credit), alternative fuel credit or alternative fuel mixture credit?

A6. You must be registered by the IRS at the time you file your claims for the alternative fuel credit and the alternative fuel mixture credit.

If you are already registered with an AL (alternative fuel) or AM (alternative fuel mixture) activity letter, as appropriate, do not apply again for registration. 

However, if you are not already registered by the IRS with the appropriate activity letter, apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.

Q7. How do I claim the cellulosic biofuel credit for qualifying sales or uses during 2012?

A7. You may claim the cellulosic biofuel credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching Form 6478 to the return in accordance with the instructions for that form.

You must be registered by the IRS at the time you file your claim for the cellulosic biofuel credit.

If you are already registered with a CB (producers of cellulosic biofuel) activity letter, do not apply again for registration. However, if you are not already registered by the IRS with the CB activity letter, you may apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.

Q8. What changes did the American Taxpayer Relief Act make to the cellulosic biofuel credit?

A8. Effective Jan. 3, 2013, the Act changed the designation of the credit to “second generation biofuel credit.” Also effective on Jan. 3, 2013, biofuels produced from algae, cyanobacteria, and lemna feedstocks are eligible for the credit. The second generation biofuel credit expires for fuel produced after Dec. 31, 2013.

Q9. If I am a second generation biofuel producer, do I need to be registered by the IRS to claim the credit?

A9. Yes, you must be registered by the IRS at the time you file your claims for second generation biofuel credit. Apply for activity letter “CB” using Form 637. If you are already registered by the IRS with a CB activity letter, do not apply again for registration.

Related Item: IRS Forms and Publications

Page Last Reviewed or Updated: 07-Mar-2014

The State Tax Return Form

State tax return form 3. State tax return form   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. State tax return form Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. State tax return form Certain contracts held by a charitable remainder trust. State tax return form Excise Taxes. State tax return form Indoor tanning services. State tax return form Application for Recognition of ExemptionPolitical activity. State tax return form Private delivery service. State tax return form Amendments to organizing documents required. State tax return form How to show reasonable action and good faith. State tax return form Not acting reasonably and in good faith. State tax return form Prejudicing the interest of the Government. State tax return form Procedure for requesting extension. State tax return form More information. State tax return form Organizations Not Required To File Form 1023 Articles of OrganizationOrganizational Test Dedication and Distribution of Assets Educational Organizations and Private SchoolsEducational Organizations Private Schools Organizations Providing InsuranceCharitable Risk Pools Other Section 501(c)(3) OrganizationsCharitable Organizations Religious Organizations Scientific Organizations Literary Organizations Amateur Athletic Organizations Prevention of Cruelty to Children or Animals Private Foundations and Public CharitiesPrivate Foundations Public Charities Private Operating Foundations Lobbying ExpendituresLobbying expenditures. State tax return form Grass roots expenditures. State tax return form Lobbying nontaxable amount. State tax return form Grass roots nontaxable amount. State tax return form Organization that no longer qualifies. State tax return form Tax on organization. State tax return form Tax on managers. State tax return form Taxes on organizations. State tax return form Taxes on managers. State tax return form Political expenditures. State tax return form Correction of expenditure. State tax return form Introduction An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes. State tax return form Religious. State tax return form Charitable. State tax return form Scientific. State tax return form Testing for public safety. State tax return form Literary. State tax return form Educational. State tax return form Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment; however, see Amateur Athletic Organizations , later in this chapter). State tax return form The prevention of cruelty to children or animals. State tax return form To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. State tax return form A trust is a fund or foundation and will qualify. State tax return form However, an individual or a partnership will not qualify. State tax return form Examples. State tax return form   Qualifying organizations include: Nonprofit old-age homes, Parent-teacher associations, Charitable hospitals or other charitable organizations, Alumni associations, Schools, Chapters of the Red Cross, Boys' or Girls' Clubs, and Churches. State tax return form Child care organizations. State tax return form   The term educational purposes includes providing for care of children away from their homes if substantially all the care provided is to enable individuals (the parents) to be gainfully employed and the services are available to the general public. State tax return form Instrumentalities. State tax return form   A state or municipal instrumentality may qualify under section 501(c)(3) if it is organized as a separate entity from the governmental unit that created it and if it otherwise meets the organizational and operational tests of section 501(c)(3). State tax return form Examples of a qualifying instrumentality might include state schools, universities, or hospitals. State tax return form However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. State tax return form A state or municipality itself does not qualify for exemption. State tax return form Topics - This chapter discusses: Contributions to 501(c)(3) organizations, Applications for recognition of exemption, Articles of Organization, Educational organizations and private schools, Organizations providing insurance, Other section 501(c)(3) organizations, Private foundations and public charities, and Lobbying expenditures. State tax return form Useful Items - You may want to see: Forms (and Instructions) 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code See chapter 6 for information about getting publications and forms. State tax return form Contributions to 501(c)(3) Organizations Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return. State tax return form Fundraising events. State tax return form   If the donor receives something of value in return for the contribution, a common occurrence with fundraising efforts, part or all of the contribution may not be deductible. State tax return form This may apply to fundraising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. State tax return form   If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. State tax return form If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. State tax return form You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fundraising event or solicit their contributions, how much is deductible and how much is for the goods or services. State tax return form See Disclosure of Quid Pro Quo Contributions in chapter 2. State tax return form Exemption application not filed. State tax return form   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. State tax return form Separate fund—contributions that are deductible. State tax return form   An organization that is exempt from federal income tax other than as an organization described in section 501(c)(3) can, if it desires, establish a fund, separate and apart from its other funds, exclusively for religious, charitable, scientific, literary, or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. State tax return form   If the fund is organized and operated exclusively for these purposes, it may qualify for exemption as an organization described in section 501(c)(3), and contributions made to it will be deductible as provided by section 170. State tax return form A fund with these characteristics must be organized in such a manner as to prohibit the use of its funds upon dissolution, or otherwise, for the general purposes of the organization creating it. State tax return form Personal benefit contracts. State tax return form   Generally, charitable deductions will not be allowed for a transfer to, or for the use of, a section 501(c)(3) or (c)(4) organization if in connection with the transfer: The organization directly or indirectly pays, or previously paid, a premium on a personal benefit contract for the transferor, or There is an understanding or expectation that anyone will directly or indirectly pay a premium on a personal benefit contract for the transferor. State tax return form   A personal benefit contract with respect to the transferor is any life insurance, annuity, or endowment contract, if any direct or indirect beneficiary under the contract is the transferor, any member of the transferor's family, or any other person designated by the transferor. State tax return form Certain annuity contracts. State tax return form   If an organization incurs an obligation to pay a charitable gift annuity, and the organization purchases an annuity contract to fund the obligation, individuals receiving payments under the charitable gift annuity will not be treated as indirect beneficiaries if the organization owns all of the incidents of ownership under the contract, is entitled to all payments under the contract, and the timing and amount of the payments are substantially the same as the timing and amount of payments to each person under the obligation (as such obligation is in effect at the time of the transfer). State tax return form Certain contracts held by a charitable remainder trust. State tax return form   An individual will not be considered an indirect beneficiary under a life insurance, annuity, or endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust solely by reason of being entitled to the payment if the trust owns all of the incidents of ownership under the contract, and the trust is entitled to all payments under the contract. State tax return form Excise tax. State tax return form   If the premiums are paid in connection with a transfer for which a deduction is not allowable under the deduction denial rule, without regard to when the transfer to the charitable organization was made, an excise tax will be applied that is equal to the amount of the premiums paid by the organization on any life insurance, annuity, or endowment contract. State tax return form The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. State tax return form Excise Taxes. State tax return form   A charitable organization liable for excise taxes must file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. State tax return form Generally, the due date for filing Form 4720 occurs on the fifteenth day of the fifth month following the close of the organization's tax year. State tax return form Indoor tanning services. State tax return form   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. State tax return form For more information, go to IRS. State tax return form gov and select Affordable Care Act Tax Provisions. State tax return form Application for Recognition of Exemption This discussion describes certain information to be provided upon application for recognition of exemption by all organizations created for any of the purposes described earlier in this chapter. State tax return form For example, the application must include a conformed copy of the organization's articles of incorporation, as discussed under Articles of Organization , later in this chapter. State tax return form See the organization headings that follow for specific information your organization may need to provide. State tax return form Form 1023. State tax return form   Your organization must file its application for recognition of exemption on Form 1023. State tax return form See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. State tax return form Some organizations are not required to file Form 1023. State tax return form See Organizations Not Required To File Form 1023, later. State tax return form    Additional information to help you complete your application can be found online. State tax return form Go to Exemption Requirement – Section 501(c)(3) Organizations and select the link at the bottom of the Web page for step by step help with the application process. State tax return form See Exemption Requirements - Section 501(c)(3) Organizations. State tax return form   Form 1023 and accompanying statements must show that all of the following are true. State tax return form The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. State tax return form ) specified in the introduction to this chapter. State tax return form No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. State tax return form You must establish that your organization will not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. State tax return form The organization will not, as a substantial part of its activities, attempt to influence legislation (unless it elects to come under the provisions allowing certain lobbying expenditures) or participate to any extent in a political campaign for or against any candidate for public office. State tax return form See Political activity, next, and Lobbying Expenditures , near the end of this chapter. State tax return form Political activity. State tax return form   If any of the activities (whether or not substantial) of your organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization will not qualify for tax-exempt status under section 501(c)(3). State tax return form Such participation or intervention includes the publishing or distributing of statements. State tax return form   Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. State tax return form Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c)(3), while other so-called voter education activities may be prohibited. State tax return form Effective date of exemption. State tax return form   Most organizations described in this chapter that were organized after October 9, 1969, will not be treated as tax exempt unless they apply for recognition of exemption by filing Form 1023. State tax return form These organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. State tax return form If the organization files the application within this 27-month period, the organization's exemption will be recognized retroactively to the date it was organized. State tax return form Otherwise, exemption will be recognized only from the date of receipt. State tax return form The date of receipt is the date of the U. State tax return form S. State tax return form postmark on the cover in which an exemption application is mailed or, if no postmark appears on the cover, the date the application is stamped as received by the IRS. State tax return form Private delivery service. State tax return form   If a private delivery service designated by the IRS, rather than the U. State tax return form S. State tax return form Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. State tax return form The following private delivery services have been designated by the IRS. State tax return form DHL Express (DHL): DHL “Same Day” Service. State tax return form Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. State tax return form United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. State tax return form M. State tax return form , UPS Worldwide Express Plus, and UPS Worldwide Express. State tax return form Amendments to organizing documents required. State tax return form   If an organization is required to alter its activities or to make substantive amendments to its organizing document, the ruling or determination letter recognizing its exempt status will be effective as of the date the changes are made. State tax return form If only a nonsubstantive amendment is made, exempt status will be effective as of the date it was organized, if the application was filed within the 15-month period, or the date the application was filed. State tax return form Extensions of time for filing. State tax return form   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. State tax return form Automatic 12-month extension. State tax return form Organizations will receive an automatic 12-month extension if they file an application for recognition of exemption with the IRS within 12 months of the original deadline. State tax return form To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. State tax return form 9100-2. State tax return form ” Discretionary extensions. State tax return form An organization that fails to file a Form 1023 within the extended 12-month period will be granted an extension to file if it submits evidence (including affidavits) to establish that: It acted reasonably and in good faith, and Granting a discretionary extension will not prejudice the interests of the government. State tax return form How to show reasonable action and good faith. State tax return form   An organization acted reasonably and showed good faith if at least one of the following is true. State tax return form The organization requests relief before its failure to file is discovered by the IRS. State tax return form The organization failed to file because of intervening events beyond its control. State tax return form The organization exercised reasonable diligence (taking into account the complexity of the return or issue and the organization's experience in these matters) but was not aware of the filing requirement. State tax return form The organization reasonably relied upon the written advice of the IRS. State tax return form The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. State tax return form An organization cannot rely on the advice of a tax professional if it knows or should know that he or she is not competent to render advice on filing exemption applications or is not aware of all the relevant facts. State tax return form Not acting reasonably and in good faith. State tax return form   An organization has not acted reasonably and in good faith under the following circumstances. State tax return form It seeks to change a return position for which an accuracy-related penalty has been or could be imposed at the time the relief is requested. State tax return form It was informed of the requirement to file and related tax consequences, but chose not to file. State tax return form It uses hindsight in requesting relief. State tax return form The IRS will not ordinarily grant an extension if specific facts have changed since the due date that makes filing an application advantageous to an organization. State tax return form Prejudicing the interest of the Government. State tax return form   Prejudice to the interest of the Government results if granting an extension of time to file to an organization results in a lower total tax liability for the years to which the filing applies than would have been the case if the organization had filed on time. State tax return form Before granting an extension, the IRS can require the organization requesting it to submit a statement from an independent auditor certifying that no prejudice will result if the extension is granted. State tax return form The interests of the Government are ordinarily prejudiced if the tax year in which the application should have been filed (or any tax year that would have been affected had the filing been timely) are closed by the statute of limitations before relief is granted. State tax return form The IRS can condition a grant of relief on the organization providing the IRS with a statement from an independent auditor certifying that the interests of the Government are not prejudiced. State tax return form Procedure for requesting extension. State tax return form   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. State tax return form A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. State tax return form Any documents relevant to the application. State tax return form An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. State tax return form If the organization relied on a tax professional's advice, the affidavit must describe the engagement and responsibilities of the professional and the extent to which the organization relied on him or her. State tax return form This affidavit must be accompanied by a dated declaration, signed by an individual who has personal knowledge of the facts and circumstances, who is authorized to act for the organization, which states, “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. State tax return form ” Detailed affidavits from individuals having knowledge or information about the events that led to the failure to make the application and to the discovery of that failure. State tax return form This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. State tax return form The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. State tax return form These affidavits must include the name, current address, and taxpayer identification number of the individual, and be accompanied by a dated declaration, signed by the individual, which states: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. State tax return form ” The organization must state whether the returns for the tax year in which the application should have been filed or any tax years that would have been affected by the application had it been timely made are being examined by the IRS, an appeals office, or a federal court. State tax return form The organization must notify the IRS office considering the request for relief if the IRS starts an examination of any such return while the organization's request for relief is pending. State tax return form The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. State tax return form   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. State tax return form Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. State tax return form More information. State tax return form   For more information about these procedures, see Regulations sections 301. State tax return form 9100-1, 301. State tax return form 9100-2, 301. State tax return form 9100-3, Revenue Procedure 2013-4, section 6. State tax return form 04, 2013-1 I. State tax return form R. State tax return form B. State tax return form 126, and Revenue Procedure 2013-8, 2013-1 I. State tax return form R. State tax return form B. State tax return form 237. State tax return form See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. State tax return form Notification from the IRS. State tax return form   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. State tax return form Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. State tax return form These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group. State tax return form Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). State tax return form These organizations are exempt automatically if they meet the requirements of section 501(c)(3). State tax return form Filing Form 1023 to establish exemption. State tax return form   If the organization wants to establish its exemption with the IRS and receive a ruling or determination letter recognizing its exempt status, it should file Form 1023. State tax return form By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. State tax return form A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. State tax return form Private foundations. State tax return form   See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation. State tax return form Gross receipts test. State tax return form   For purposes of the gross receipts test, an organization normally does not have more than $5,000 annually in gross receipts if: During its first tax year the organization received gross receipts of $7,500 or less, During its first 2 years the organization had a total of $12,000 or less in gross receipts, and In the case of an organization that has been in existence for at least 3 years, the total gross receipts received by the organization during the immediately preceding 2 years, plus the current year, are $15,000 or less. State tax return form   An organization with gross receipts more than the amounts in the gross receipts test, unless otherwise exempt from filing Form 1023, must file a Form 1023 within 90 days after the end of the period in which the amounts are exceeded. State tax return form For example, an organization's gross receipts for its first tax year were less than $7,500, but at the end of its second tax year its gross receipts for the 2-year period were more than $12,000. State tax return form The organization must file Form 1023 within 90 days after the end of its second tax year. State tax return form   If the organization had existed for at least 3 tax years and had met the gross receipts test for all prior tax years but fails to meet the requirement for the current tax year, its tax-exempt status for the prior years will not be lost even if Form 1023 is not filed within 90 days after the close of the current tax year. State tax return form However, the organization will not be treated as a section 501(c)(3) organization for the period beginning with the current tax year and ending with the filing of Form 1023. State tax return form Example. State tax return form   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. State tax return form It was incorporated on January 1, 2009, and files returns on a calendar-year basis. State tax return form It did not file a Form 1023. State tax return form The organization's gross receipts during the years 2009 through 2012 were as follows: 2009 $3,600 2010 2,900 2011 400 2012 12,600   The organization's total gross receipts for 2009, 2010, and 2011 were $6,900. State tax return form Therefore, it did not have to file Form 1023 and is exempt for those years. State tax return form However, for 2010, 2011, and 2012 the total gross receipts were $15,900. State tax return form Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. State tax return form If it does not file within this time period, it will not be exempt under section 501(c)(3) for the period beginning with tax year 2012 ending when the Form 1023 is received by the IRS. State tax return form The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. State tax return form   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. State tax return form See the procedures for this extension discussed earlier. State tax return form Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. State tax return form This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. State tax return form Organizational Test The articles of organization must limit the organization's purposes to one or more of those described at the beginning of this chapter and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. State tax return form These conditions for exemption are referred to as the organizational test. State tax return form Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. State tax return form Therefore, the organizational test may be met if the purposes stated in the articles of organization are limited in some way by reference to section 501(c)(3). State tax return form The requirement that your organization's purposes and powers must be limited by the articles of organization is not satisfied if the limit is contained only in the bylaws or other rules or regulations. State tax return form Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. State tax return form Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. State tax return form In interpreting an organization's articles, the law of the state where the organization was created is controlling. State tax return form If an organization contends that the terms of its articles have a different meaning under state law than their generally accepted meaning, such meaning must be established by a clear and convincing reference to relevant court decisions, opinions of the state attorney general, or other appropriate state authorities. State tax return form The following are examples illustrating the organizational test. State tax return form Example 1. State tax return form Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). State tax return form These articles appropriately limit the organization's purposes. State tax return form The organization meets the organizational test. State tax return form Example 2. State tax return form An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. State tax return form The organization will not be properly limited as to its purposes since all research is not scientific. State tax return form The organization does not meet the organizational test. State tax return form Example 3. State tax return form An organization's articles state that its purpose is to receive contributions and pay them over to organizations that are described in section 501(c)(3) and exempt from taxation under section 501(a). State tax return form The organization meets the organizational test. State tax return form Example 4. State tax return form If a stated purpose in the articles is the conduct of a school of adult education and its manner of operation is described in detail, such a purpose will be satisfactorily limited. State tax return form Example 5. State tax return form If the articles state the organization is formed for charitable purposes, without any further description, such language ordinarily will be sufficient since the term charitable has a generally accepted legal meaning. State tax return form On the other hand, if the purposes are stated to be charitable, philanthropic, and benevolent, the organizational requirement will not be met since the terms philanthropic and benevolent have no generally accepted legal meaning and, therefore, the stated purposes may, under the laws of the state, permit activities that are broader than those intended by the exemption law. State tax return form Example 6. State tax return form If the articles state an organization is formed to promote American ideals, or to foster the best interests of the people, or to further the common welfare and well-being of the community, without any limitation or provision restricting such purposes to accomplishment only in a charitable manner, the purposes will not be sufficiently limited. State tax return form Such purposes are vague and may be accomplished other than in an exempt manner. State tax return form Example 7. State tax return form A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. State tax return form A hospital may or may not be exempt depending on the manner in which it is operated. State tax return form Example 8. State tax return form An organization that is expressly empowered by its articles to carry on social activities will not be sufficiently limited as to its power, even if its articles state that it is organized and will be operated exclusively for charitable purposes. State tax return form Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. State tax return form This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the Federal Government or to a state or local government for a public purpose. State tax return form If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. State tax return form Dedication. State tax return form   To establish that your organization's assets will be permanently dedicated to an exempt purpose, the articles of organization should contain a provision ensuring their distribution for an exempt purpose in the event of dissolution. State tax return form Although reliance can be placed upon state law to establish permanent dedication of assets for exempt purposes, your organization's application probably can be processed much more rapidly if its articles of organization include a provision ensuring permanent dedication of assets for exempt purposes. State tax return form Distribution. State tax return form   Revenue Procedure 82-2, 1982-1 C. State tax return form B. State tax return form 367, identifies the states and circumstances in which the IRS will not require an express provision for the distribution of assets upon dissolution in the articles of organization. State tax return form The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. State tax return form   If a named beneficiary is to be the distributee, it must be one that would qualify and would be exempt within the meaning of section 501(c)(3) at the time the dissolution takes place. State tax return form Since the named beneficiary at the time of dissolution may not be qualified, may not be in existence, or may be unwilling or unable to accept the assets of the dissolving organization, a provision should be made for distribution of the assets for one or more of the purposes specified in this chapter in the event of any such contingency. State tax return form Sample articles of organization. State tax return form   See sample articles of organization in the Appendix in the back of this publication. State tax return form Educational Organizations and Private Schools If your organization wants to obtain recognition of exemption as an educational organization, you must submit complete information as to how your organization carries on or plans to carry on its educational activities, such as by conducting a school, by panels, discussions, lectures, forums, radio and television programs, or through various cultural media such as museums, symphony orchestras, or art exhibits. State tax return form In each instance, you must explain by whom and where these activities are or will be conducted and the amount of admission fees, if any. State tax return form You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. State tax return form If you are organized to conduct a school, you must submit full information regarding your tuition charges, number of faculty members, number of full-time and part-time students enrolled, courses of study and degrees conferred, together with a copy of your school catalog. State tax return form See also Private Schools , discussed later. State tax return form Educational Organizations The term educational relates to: The instruction or training of individuals for the purpose of improving or developing their capabilities, or The instruction of the public on subjects useful to individuals and beneficial to the community. State tax return form Advocacy of a position. State tax return form   Advocacy of a particular position or viewpoint may be educational if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the public to form an independent opinion or conclusion. State tax return form The mere presentation of unsupported opinion is not educational. State tax return form Method not educational. State tax return form   The method used by an organization to develop and present its views is a factor in determining if an organization qualifies as educational within the meaning of section 501(c)(3). State tax return form The following factors may indicate that the method is not educational. State tax return form The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. State tax return form The facts that purport to support the viewpoint are distorted. State tax return form The organization's presentations make substantial use of inflammatory and disparaging terms and express conclusions more on the basis of emotion than of objective evaluations. State tax return form The approach used is not aimed at developing an understanding on the part of the audience because it does not consider their background or training. State tax return form   Exceptional circumstances, however, may exist where an organization's advocacy may be educational even if one or more of the factors listed above are present. State tax return form Qualifying organizations. State tax return form   The following types of organizations may qualify as educational: An organization, such as a primary or secondary school, a college, or a professional or trade school, that has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled student body in attendance at a place where the educational activities are regularly carried on, An organization whose activities consist of conducting public discussion groups, forums, panels, lectures, or other similar programs, An organization that presents a course of instruction by correspondence or through the use of television or radio, A museum, zoo, planetarium, symphony orchestra, or other similar organization, A nonprofit children's day-care center, and A credit counseling organization. State tax return form College book stores, cafeterias, restaurants, etc. State tax return form   These and other on-campus organizations should submit information to show that they are controlled by and operated for the convenience of the faculty and student body or by whom they are controlled and whom they serve. State tax return form Alumni association. State tax return form   An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. State tax return form If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs . State tax return form Athletic organization. State tax return form   This type of organization must submit evidence that it is engaged in activities such as directing and controlling interscholastic athletic competitions, conducting tournaments, and prescribing eligibility rules for contestants. State tax return form If it is not so engaged, your organization may be exempt as a social club described in chapter 4. State tax return form Raising funds to be used for travel and other activities to interview and persuade prospective students with outstanding athletic ability to attend a particular university does not show an exempt purpose. State tax return form If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. State tax return form Private Schools Every private school filing an application for recognition of tax-exempt status must supply the IRS (on Schedule B, Form 1023) with the following information. State tax return form The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. State tax return form (This information also must be projected, so far as may be feasible, for the next academic year. State tax return form ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. State tax return form A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. State tax return form A statement indicating whether any of the organizations described in item (3) above have an objective of maintaining segregated public or private school education at the time the application is filed and, if so, whether any of the individuals described in item (3) are officers or active members of those organizations at the time the application is filed. State tax return form The public school district and county in which the school is located. State tax return form How to determine racial composition. State tax return form   The racial composition of the student body, faculty, and administrative staff can be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit to the school information that the school otherwise does not require. State tax return form Nevertheless, a statement of the method by which the racial composition was determined must be supplied. State tax return form The identity of individual students or members of the faculty and administrative staff should not be included with this information. State tax return form   A school that is a state or municipal instrumentality (see Instrumentalities , near the beginning of this chapter), whether or not it qualifies for exemption under section 501(c)(3), is not considered to be a private school for purposes of the following discussion. State tax return form Racially Nondiscriminatory Policy To qualify as an organization exempt from federal income tax, a private school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and that it does not discriminate against applicants and students on the basis of race, color, or national or ethnic origin. State tax return form Also, the school must circulate information that clearly states the school's admission policies. State tax return form A racially nondiscriminatory policy toward students means that the school admits the students of any race to all the rights, privileges, programs, and activities generally accorded or made available to students at that school and that the school does not discriminate on the basis of race in administering its educational policies, admission policies, scholarship and loan programs, and athletic and other school-administered programs. State tax return form The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. State tax return form The existence of a racially discriminatory policy with respect to the employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. State tax return form Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. State tax return form A policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance is not discrimination on the basis of race when the purpose and effect of this policy is to promote establishing and maintaining the school's nondiscriminatory policy. State tax return form A school that selects students on the basis of membership in a religious denomination or unit is not discriminating if membership in the denomination or unit is open to all on a racially nondiscriminatory basis. State tax return form Policy statement. State tax return form   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. State tax return form Also, the school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses to inform prospective students of its programs. State tax return form Publicity requirement. State tax return form   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. State tax return form Selective communication of a racially nondiscriminatory policy that a school provides solely to leaders of racial groups will not be considered an effective means of communication to make the policy known to all segments of the community. State tax return form To satisfy this requirement, the school must use one of the following two methods. State tax return form Method one. State tax return form   The school can publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. State tax return form Such publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. State tax return form When more than one community is served by a school, the school can publish the notice in those newspapers that are reasonably likely to be read by all racial segments in the communities that the school serves. State tax return form If this method is used, the notice must meet the following printing requirements. State tax return form It must appear in a section of the newspaper likely to be read by prospective students and their families. State tax return form It must occupy at least 3 column inches. State tax return form It must have its title printed in at least 12 point bold face type. State tax return form It must have the remaining text printed in at least 8 point type. State tax return form The following is an acceptable example of the notice:   NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS     The M School admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. State tax return form It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs. State tax return form   Method two. State tax return form   The school can use the broadcast media to publicize its racially nondiscriminatory policy if this use makes the policy known to all segments of the general community the school serves. State tax return form If the school uses this method, it must provide documentation showing that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. State tax return form In this case, appropriate documentation would include copies of the tapes or scripts used and records showing that there was an adequate number of announcements. State tax return form The documentation also would include proof that these announcements were made during hours when they were likely to be communicated to all segments of the general community, that they were long enough to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. State tax return form Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. State tax return form Exceptions. State tax return form   The publicity requirements will not apply in the following situations. State tax return form First, if for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school can make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit uses in the communities from which the students are drawn. State tax return form These newspapers and circulars can be distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. State tax return form If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and the second exception (discussed next) does not apply to the school, then it must comply with either of the publicity requirements explained earlier. State tax return form Second, if a school customarily draws a substantial percentage of its students nationwide, worldwide, from a large geographic section or sections of the United States, or from local communities, and if the school follows a racially nondiscriminatory policy as to its students, the school may satisfy the publicity requirement by complying with the instructions explained earlier under Policy statement . State tax return form   The school can demonstrate that it follows a racially nondiscriminatory policy either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, except for local community schools, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. State tax return form The question as to whether a school demonstrates such a policy satisfactorily will be determined on the basis of the facts and circumstances of each case. State tax return form   The IRS recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy when there are relatively few or no such students in these communities. State tax return form Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or are otherwise expressly obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any federal agency was a party. State tax return form   The IRS encourages schools to satisfy the publicity requirement by using either of the methods described earlier, even though a school considers itself to be within one of the Exceptions. State tax return form The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. State tax return form In this regard, it is each school's responsibility to determine whether either of the exceptions applies. State tax return form Such responsibility will prepare the school, if it is audited by the IRS, to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with either one of the publicity requirements was justified by one of the exceptions. State tax return form Also, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official was aware of these statements. State tax return form Facilities and programs. State tax return form   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. State tax return form Scholarship and loan programs. State tax return form   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. State tax return form This must be known throughout the general community being served by the school and should be referred to in its publicity. State tax return form Financial assistance programs, as well as scholarships and loans made under financial assistance programs, that favor members of one or more racial minority groups and that do not significantly detract from or are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. State tax return form Certification. State tax return form   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students must certify annually, under penalties of perjury, on Schedule E (Form 990 or 990-EZ) or Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax, whichever applies, that to the best of his or her knowledge and belief the school has satisfied all requirements that apply, as previously explained. State tax return form   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. State tax return form Recordkeeping requirements. State tax return form With certain exceptions, given later, each exempt private school must maintain the following records for a minimum period of 3 years, beginning with the year after the year of compilation or acquisition. State tax return form Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. State tax return form Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. State tax return form Copies of all materials used by or on behalf of the school to solicit contributions. State tax return form Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. State tax return form (Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed. State tax return form ) The racial composition of the student body, faculty, and administrative staff can be determined in the same manner as that described at the beginning of this section. State tax return form However, a school cannot discontinue maintaining a system of records that reflect the racial composition of its students, faculty, and administrative staff used on November 6, 1975, unless it substitutes a different system that compiles substantially the same information, without advance approval of the IRS. State tax return form The IRS does not require that a school release any personally identifiable records or personal information except in accordance with the requirements of the Family Educational Rights and Privacy Act of 1974. State tax return form Similarly, the IRS does not require a school to keep records prohibited under state or federal law. State tax return form Exceptions. State tax return form   The school does not have to independently maintain these records for IRS use if both of the following are true. State tax return form Substantially the same information has been included in a report or reports filed with an agency or agencies of federal, state, or local governments, and this information is current within 1 year. State tax return form The school maintains copies of these reports from which this information is readily obtainable. State tax return form If these reports do not include all of the information required, as discussed earlier, records providing such remaining information must be maintained by the school for IRS use. State tax return form Failure to maintain records. State tax return form   Failure to maintain or to produce the required records and information, upon proper request, will create a presumption that the organization has failed to comply with these guidelines. State tax return form Organizations Providing Insurance An organization described in sections 501(c)(3) or 501(c)(4) may be exempt from tax only if no substantial part of its activities consists of providing commercial-type insurance. State tax return form However, this rule does not apply to state-sponsored organizations described in sections 501(c)(26) or 501(c)(27), which are discussed in chapter 4, or to charitable risk pools, discussed next. State tax return form Charitable Risk Pools A charitable risk pool is treated as organized and operated exclusively for charitable purposes if it: Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management, Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a), Is organized under state law authorizing this type of risk pooling, Is exempt from state income tax (or will be after qualifying as a section 501(c)(3) organization), Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, Is controlled by a board of directors elected by its members, and Is organized under documents requiring that: Each member be a section 501(c)(3) organization exempt from tax under section 501(a), Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and Each insurance policy issued by the pool provide that it will not cover events occurring after a final determination described in (b). State tax return form Other Section 501(c)(3) Organizations In addition to the information required for all organizations, as described earlier, you should include any other information described in this section. State tax return form Charitable Organizations If your organization is applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest. State tax return form Some examples of this type of organization are those organized for: Relief of the poor, the distressed, or the underprivileged, Advancement of religion, Advancement of education or science, Erection or maintenance of public buildings, monuments, or works, Lessening the burdens of government, Lessening of neighborhood tensions, Elimination of prejudice and discrimination, Defense of human and civil rights secured by law, and Combating community deterioration and juvenile delinquency. State tax return form The rest of this section contains a description of the information to be provided by certain specific organizations. State tax return form This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. State tax return form Each of the following organizations must submit the information described. State tax return form Charitable organization supporting education. State tax return form   Submit information showing how your organization supports education — for example, contributes to an existing educational institution, endows a professorial chair, contributes toward paying teachers' salaries, or contributes to an educational institution to enable it to carry on research. State tax return form Scholarships. State tax return form   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. State tax return form Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. State tax return form How and by whom the recipients are or will be selected. State tax return form If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. State tax return form If awards are or will be made to recipients of a particular class, for example, children of employees of a particular employer— Whether any preference is or will be accorded an applicant by reason of the parent's position, length of employment, or salary, Whether as a condition of the award the recipient must upon graduation accept employment with the company, and Whether the award will be continued even if the parent's employment ends. State tax return form A copy of the scholarship application form and any brochures or literature describing the scholarship program. State tax return form Hospital. State tax return form   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. State tax return form   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. State tax return form You must attach a list showing: The names of the active and courtesy staff members of the proprietary hospital, as well as the names of your medical staff members after the transfer to nonprofit ownership, and The names of any doctors who continued to lease office space in the hospital after its transfer to nonprofit ownership and the amount of rent paid. State tax return form Submit also an appraisal showing the fair rental value of the rented space. State tax return form Clinic. State tax return form   If you are organized to operate a clinic, attach a statement including: A description of the facilities and services, To whom the services are offered, such as the public at large or a specific group, How charges are determined, such as on a profit basis, to recover costs, or at less than cost, By whom administered and controlled, Whether any of the professional staff (that is, those who perform or will perform the clinical services) also serve or will serve in an administrative capacity, and How compensation paid the professional staff is or will be determined. State tax return form Home for the aged. State tax return form   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. State tax return form Community nursing bureau. State tax return form   If you provide a nursing register or community nursing bureau, provide information showing that your organization will be operated as a community project and will receive its primary support from public contributions to maintain a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses for the benefit of hospitals, health agencies, doctors, and individuals. State tax return form Organization providing loans. State tax return form   If you make, or will make, loans for charitable and educational purposes, submit the following information. State tax return form An explanation of the circumstances under which such loans are, or will be, made. State tax return form Criteria for selection, including the rules of eligibility. State tax return form How and by whom the recipients are or will be selected. State tax return form Manner of repayment of the loan. State tax return form Security required, if any. State tax return form Interest charged, if any, and when payable. State tax return form Copies in duplicate of the loan application and any brochures or literature describing the loan program. State tax return form Public-interest law firms. State tax return form   If your organization was formed to litigate in the public interest (as opposed to providing legal services to the poor), such as in the area of protection of the environment, you should submit the following information. State tax return form How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. State tax return form Whether the organization will accept fees for its services. State tax return form A description of the cases litigated or to be litigated and how they benefit the public generally. State tax return form Whether the policies and program of the organization are the responsibility of a board or committee representative of the public interest, which is neither controlled by employees or persons who litigate on behalf of the organization nor by any organization that is not itself an organization described in this chapter. State tax return form Whether the organization is operated, through sharing of office space or otherwise, in a way to create identification or confusion with a particular private law firm. State tax return form Whether there is an arrangement to provide, directly or indirectly, a deduction for the cost of litigation that is for the private benefit of the donor. State tax return form Acceptance of attorneys' fees. State tax return form   A nonprofit public-interest law firm can accept attorneys' fees in public-interest cases if the fees are paid directly by its clients and the fees are not more than the actual costs incurred in the case. State tax return form Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. State tax return form   Firms can accept fees awarded or approved by a court or an administrative agency and paid by an opposing party if the firms do not use the likelihood or probability of fee awards as a consideration in the selection of cases. State tax return form All fee awards must be paid to the organization and not to its individual staff attorneys. State tax return form Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. State tax return form Private attorneys, whose services are retained by the firm to assist it in particular cases, can be compensated by the firm, but only on a fixed fee or salary basis. State tax return form   The total amount of all attorneys' fees (court awarded and those received from clients) must not be more than 50% of the total cost of operations of the organization's legal functions, calculated over a 5-year period. State tax return form   If, in order to carry out its program, an organization violates applicable canons of ethics, disrupts the judicial system, or engages in any illegal action, the organization will jeopardize its exemption. State tax return form Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. State tax return form That the particular religious beliefs of the organization are truly and sincerely held. State tax return form That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. State tax return form Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. State tax return form If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs. State tax return form Churches. State tax return form   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. State tax return form In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church. State tax return form   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. State tax return form Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. State tax return form The IRS considers the facts and circumstances of each organization applying for church status. State tax return form Convention or association of churches. State tax return form   Any organization that is otherwise a convention or association of churches will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization. State tax return form Integrated auxiliaries. State tax return form   An organization is an integrated auxiliary of a church if all the following are true. State tax return form The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). State tax return form It is affiliated with a church or a convention or association of churches. State tax return form It is internally supported. State tax return form An organization is internally supported unless both of the following are true. State tax return form It offers admissions, goods, services, or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for a small part of the cost). State tax return form It normally gets more than 50% of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses. State tax return form Special rule. State tax return form   Men's and women's organizations, seminaries, mission societies, and youth groups that satisfy (1) and (2) shown earlier are integrated auxiliaries of a church even if they are not internally supported. State tax return form   In order for an organization (including a church and religious organization) to qualify for tax exemption, no part of its net earnings can inure to any individual. State tax return form   Although an individual is entitled to a charitable deduction for contributions to a church, the assignment or similar transfer of compensation for personal services to a church generally does not relieve a taxpayer of federal income tax liability on the compensation, regardless of the motivation behind the transfer. State tax return form Scientific Organizations You must show that your organization's research will be carried on in the public interest. State tax return form Scientific research will be considered to be in the public interest if the results of the research (including any patents, copyrights, processes, or formulas) are made available to the public on a nondiscriminatory basis; if the research is performed for the United States or a state, county, or municipal government; or if the research is carried on for one of the following purposes. State tax return form Aiding in the scientific education of college or university students. State tax return form Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th