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Tax form ez 5. Tax form ez   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. Tax form ez Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Reminder Foreign income. Tax form ez   If you are a U. Tax form ez S. Tax form ez citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. Tax form ez S. Tax form ez law. Tax form ez This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. Tax form ez This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). Tax form ez If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. Tax form ez For details, see Publication 54, Tax Guide for U. Tax form ez S. Tax form ez Citizens and Resident Aliens Abroad. Tax form ez Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. Tax form ez The following topics are included. Tax form ez Bonuses and awards. Tax form ez Special rules for certain employees. Tax form ez Sickness and injury benefits. Tax form ez The chapter explains what income is included in the employee's gross income and what is not included. Tax form ez Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income Employee Compensation This section discusses various types of employee compensation including fringe benefits, retirement plan contributions, stock options, and restricted property. Tax form ez Form W-2. Tax form ez    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. Tax form ez Include your pay on line 7 of Form 1040 or Form 1040A, or on line 1 of Form 1040EZ, even if you do not receive a Form W-2. Tax form ez   If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. Tax form ez These wages must be included on line 7 of Form 1040. Tax form ez See Form 8919 for more information. Tax form ez Childcare providers. Tax form ez    If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. Tax form ez If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Tax form ez You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. Tax form ez Babysitting. Tax form ez   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. Tax form ez Miscellaneous Compensation This section discusses different types of employee compensation. Tax form ez Advance commissions and other earnings. Tax form ez   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. Tax form ez    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. Tax form ez If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), or you may be able to take a credit for that year. Tax form ez See Repayments in chapter 12. Tax form ez Allowances and reimbursements. Tax form ez    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. Tax form ez If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. Tax form ez Back pay awards. Tax form ez    Include in income amounts you are awarded in a settlement or judgment for back pay. Tax form ez These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. Tax form ez They should be reported to you by your employer on Form W-2. Tax form ez Bonuses and awards. Tax form ez   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. Tax form ez These include prizes such as vacation trips for meeting sales goals. Tax form ez If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. Tax form ez However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. Tax form ez Employee achievement award. Tax form ez   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. Tax form ez However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. Tax form ez Your employer can tell you whether your award is a qualified plan award. Tax form ez Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. Tax form ez   However, the exclusion does not apply to the following awards: A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. Tax form ez A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. Tax form ez Example. Tax form ez Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. Tax form ez Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. Tax form ez However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 – $1,600) in his income. Tax form ez Differential wage payments. Tax form ez   This is any payment made to you by an employer for any period during which you are, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages you would have received from the employer during that period. Tax form ez These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. Tax form ez The payments are reported as wages on Form W-2. Tax form ez Government cost-of-living allowances. Tax form ez   Most payments received by U. Tax form ez S. Tax form ez Government civilian employees for working abroad are taxable. Tax form ez However, certain cost-of-living allowances are tax free. Tax form ez Publication 516, U. Tax form ez S. Tax form ez Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. Tax form ez Nonqualified deferred compensation plans. Tax form ez   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. Tax form ez This amount is shown on Form W-2, box 12, using code Y. Tax form ez This amount is not included in your income. Tax form ez   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. Tax form ez This amount is included in your wages shown on Form W-2, box 1. Tax form ez It is also shown on Form W-2, box 12, using code Z. Tax form ez Note received for services. Tax form ez    If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. Tax form ez When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. Tax form ez Do not include that part again in your income. Tax form ez Include the rest of the payment in your income in the year of payment. Tax form ez   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. Tax form ez Severance pay. Tax form ez   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. Tax form ez Accrued leave payment. Tax form ez    If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. Tax form ez   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. Tax form ez You can reduce gross wages by the amount you repaid in the same tax year in which you received it. Tax form ez Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on the return and the wages on your Forms W-2. Tax form ez Outplacement services. Tax form ez   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. Tax form ez    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). Tax form ez Sick pay. Tax form ez   Pay you receive from your employer while you are sick or injured is part of your salary or wages. Tax form ez In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. Tax form ez A state sickness or disability fund. Tax form ez An association of employers or employees. Tax form ez An insurance company, if your employer paid for the plan. Tax form ez However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. Tax form ez For more information, see Publication 525. Tax form ez Social security and Medicare taxes paid by employer. Tax form ez   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. Tax form ez The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. Tax form ez However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. Tax form ez Stock appreciation rights. Tax form ez   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. Tax form ez When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. Tax form ez You include the cash payment in your income in the year you use the right. Tax form ez Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. Tax form ez Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. Tax form ez Accounting period. Tax form ez   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. Tax form ez Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. Tax form ez The general rule: benefits are reported for a full calendar year (January 1–December 31). Tax form ez The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. Tax form ez For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. Tax form ez  Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. Tax form ez   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). Tax form ez Form W-2. Tax form ez   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. Tax form ez Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). Tax form ez However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). Tax form ez Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. Tax form ez Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . Tax form ez For information on the items covered in this section, other than Long-term care coverage, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Tax form ez Long-term care coverage. Tax form ez    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. Tax form ez However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. Tax form ez This amount will be reported as wages in box 1 of your Form W-2. Tax form ez   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. Tax form ez Archer MSA contributions. Tax form ez    Contributions by your employer to your Archer MSA generally are not included in your income. Tax form ez Their total will be reported in box 12 of Form W-2 with code R. Tax form ez You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Tax form ez File the form with your return. Tax form ez Health flexible spending arrangement (health FSA). Tax form ez   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. Tax form ez Note. Tax form ez Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. Tax form ez The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. Tax form ez For more information, see Notice 2012-40, 2012-26 I. Tax form ez R. Tax form ez B. Tax form ez 1046, available at www. Tax form ez irs. Tax form ez gov/irb/2012-26 IRB/ar09. Tax form ez html. Tax form ez Health reimbursement arrangement (HRA). Tax form ez   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. Tax form ez Health savings accounts (HSA). Tax form ez   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. Tax form ez Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. Tax form ez Contributions made by your employer are not included in your income. Tax form ez Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. Tax form ez Distributions not used for qualified medical expenses are included in your income. Tax form ez See Publication 969 for the requirements of an HSA. Tax form ez   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Tax form ez The contributions are treated as a distribution of money and are not included in the partner's gross income. Tax form ez Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. Tax form ez In both situations, the partner can deduct the contribution made to the partner's HSA. Tax form ez   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. Tax form ez The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Tax form ez Qualified HSA funding distribution. Tax form ez   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. Tax form ez See Publication 590 for the requirements for these qualified HSA funding distributions. Tax form ez Failure to maintain eligibility. Tax form ez   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. Tax form ez If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. Tax form ez This income is also subject to an additional 10% tax. Tax form ez Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. Tax form ez See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. Tax form ez Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. Tax form ez They also are included as social security and Medicare wages in boxes 3 and 5. Tax form ez However, they are not included as wages in box 1. Tax form ez To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. Tax form ez File the form with your return. Tax form ez De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. Tax form ez In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. Tax form ez Holiday gifts. Tax form ez   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. Tax form ez However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. Tax form ez Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. Tax form ez For more information, see Publication 970, Tax Benefits for Education. Tax form ez Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. Tax form ez However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. Tax form ez For exceptions, see Entire cost excluded , and Entire cost taxed , later. Tax form ez If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. Tax form ez Also, it is shown separately in box 12 with code C. Tax form ez Group-term life insurance. Tax form ez   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. Tax form ez Permanent benefits. Tax form ez   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. Tax form ez Your employer should be able to tell you the amount to include in your income. Tax form ez Accidental death benefits. Tax form ez   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. Tax form ez Former employer. Tax form ez   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. Tax form ez Also, it is shown separately in box 12 with code C. Tax form ez Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. Tax form ez You must pay these taxes with your income tax return. Tax form ez Include them on line 60, Form 1040, and follow the instructions for line 60. Tax form ez For more information, see the Instructions for Form 1040. Tax form ez Two or more employers. Tax form ez   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. Tax form ez If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. Tax form ez You must figure how much to include in your income. Tax form ez Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. Tax form ez Figuring the taxable cost. Tax form ez   Use the following worksheet to figure the amount to include in your income. Tax form ez     Worksheet 5-1. Tax form ez Figuring the Cost of Group-Term Life Insurance To Include in Income 1. Tax form ez Enter the total amount of your insurance coverage from your employer(s) 1. Tax form ez   2. Tax form ez Limit on exclusion for employer-provided group-term life insurance coverage 2. Tax form ez 50,000 3. Tax form ez Subtract line 2 from line 1 3. Tax form ez   4. Tax form ez Divide line 3 by $1,000. Tax form ez Figure to the nearest tenth 4. Tax form ez   5. Tax form ez Go to Table 5-1. Tax form ez Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Tax form ez   6. Tax form ez Multiply line 4 by line 5 6. Tax form ez   7. Tax form ez Enter the number of full months of coverage at this cost. Tax form ez 7. Tax form ez   8. Tax form ez Multiply line 6 by line 7 8. Tax form ez   9. Tax form ez Enter the premiums you paid per month 9. Tax form ez       10. Tax form ez Enter the number of months you paid the premiums 10. Tax form ez       11. Tax form ez Multiply line 9 by line 10. Tax form ez 11. Tax form ez   12. Tax form ez Subtract line 11 from line 8. Tax form ez Include this amount in your income as wages 12. Tax form ez      Table 5-1. Tax form ez Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. Tax form ez 05 25 through 29 . Tax form ez 06 30 through 34 . Tax form ez 08 35 through 39 . Tax form ez 09 40 through 44 . Tax form ez 10 45 through 49 . Tax form ez 15 50 through 54 . Tax form ez 23 55 through 59 . Tax form ez 43 60 through 64 . Tax form ez 66 65 through 69 1. Tax form ez 27 70 and older 2. Tax form ez 06 Example. Tax form ez You are 51 years old and work for employers A and B. Tax form ez Both employers provide group-term life insurance coverage for you for the entire year. Tax form ez Your coverage is $35,000 with employer A and $45,000 with employer B. Tax form ez You pay premiums of $4. Tax form ez 15 a month under the employer B group plan. Tax form ez You figure the amount to include in your income as shown in Worksheet 5-1. Tax form ez Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. Tax form ez Worksheet 5-1. Tax form ez Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. Tax form ez Enter the total amount of your insurance coverage from your employer(s) 1. Tax form ez 80,000 2. Tax form ez Limit on exclusion for employer-provided group-term life insurance coverage 2. Tax form ez 50,000 3. Tax form ez Subtract line 2 from line 1 3. Tax form ez 30,000 4. Tax form ez Divide line 3 by $1,000. Tax form ez Figure to the nearest tenth 4. Tax form ez 30. Tax form ez 0 5. Tax form ez Go to Table 5-1. Tax form ez Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Tax form ez . Tax form ez 23 6. Tax form ez Multiply line 4 by line 5 6. Tax form ez 6. Tax form ez 90 7. Tax form ez Enter the number of full months of coverage at this cost. Tax form ez 7. Tax form ez 12 8. Tax form ez Multiply line 6 by line 7 8. Tax form ez 82. Tax form ez 80 9. Tax form ez Enter the premiums you paid per month 9. Tax form ez 4. Tax form ez 15     10. Tax form ez Enter the number of months you paid the premiums 10. Tax form ez 12     11. Tax form ez Multiply line 9 by line 10. Tax form ez 11. Tax form ez 49. Tax form ez 80 12. Tax form ez Subtract line 11 from line 8. Tax form ez Include this amount in your income as wages 12. Tax form ez 33. Tax form ez 00 Entire cost excluded. Tax form ez   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. Tax form ez You are permanently and totally disabled and have ended your employment. Tax form ez Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. Tax form ez A charitable organization (defined in chapter 24) to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. Tax form ez (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. Tax form ez ) The plan existed on January 1, 1984, and You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. Tax form ez Entire cost taxed. Tax form ez   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply: The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. Tax form ez You are a key employee and your employer's plan discriminates in favor of key employees. Tax form ez Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. Tax form ez Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. Tax form ez You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. Tax form ez Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. Tax form ez A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. Tax form ez Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. Tax form ez However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. Tax form ez Exclusion limit. Tax form ez   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. Tax form ez   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. Tax form ez   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. Tax form ez   If the benefits have a value that is more than these limits, the excess must be included in your income. Tax form ez You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. Tax form ez Commuter highway vehicle. Tax form ez   This is a highway vehicle that seats at least six adults (not including the driver). Tax form ez At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). Tax form ez Transit pass. Tax form ez   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. Tax form ez Qualified parking. Tax form ez   This is parking provided to an employee at or near the employer's place of business. Tax form ez It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. Tax form ez It does not include parking at or near the employee's home. Tax form ez Qualified bicycle commuting. Tax form ez   This is reimbursement based on the number of qualified bicycle commuting months for the year. Tax form ez A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. Tax form ez The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. Tax form ez Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. Tax form ez (Your employer can tell you whether your retirement plan is qualified. Tax form ez ) However, the cost of life insurance coverage included in the plan may have to be included. Tax form ez See Group-Term Life Insurance , earlier, under Fringe Benefits. Tax form ez If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. Tax form ez However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. Tax form ez For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. Tax form ez S. Tax form ez Civil Service Retirement Benefits, if you are a federal employee or retiree). Tax form ez Elective deferrals. Tax form ez   If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. Tax form ez The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. Tax form ez An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. Tax form ez However, it is included in wages subject to social security and Medicare taxes. Tax form ez   Elective deferrals include elective contributions to the following retirement plans. Tax form ez Cash or deferred arrangements (section 401(k) plans). Tax form ez The Thrift Savings Plan for federal employees. Tax form ez Salary reduction simplified employee pension plans (SARSEP). Tax form ez Savings incentive match plans for employees (SIMPLE plans). Tax form ez Tax-sheltered annuity plans (403(b) plans). Tax form ez Section 501(c)(18)(D) plans. Tax form ez Section 457 plans. Tax form ez Qualified automatic contribution arrangements. Tax form ez   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. Tax form ez You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. Tax form ez The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. Tax form ez   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. Tax form ez Overall limit on deferrals. Tax form ez   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3) and (5) above. Tax form ez The limit for SIMPLE plans is $12,000. Tax form ez The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. Tax form ez The limit for section 457 plans is the lesser of your includible compensation or $17,500. Tax form ez Amounts deferred under specific plan limits are part of the overall limit on deferrals. Tax form ez Designated Roth contributions. Tax form ez   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. Tax form ez Designated Roth contributions are treated as elective deferrals, except that they are included in income. Tax form ez Excess deferrals. Tax form ez   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. Tax form ez However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. Tax form ez   If you set aside more than the limit, the excess generally must be included in your income for that year, unless you have an excess deferral of a designated Roth contribution. Tax form ez See Publication 525 for a discussion of the tax treatment of excess deferrals. Tax form ez Catch-up contributions. Tax form ez   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. Tax form ez Stock Options If you receive a nonstatutory option to buy or sell stock or other property as payment for your services, you usually will have income when you receive the option, when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option. Tax form ez However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. Tax form ez Your employer can tell you which kind of option you hold. Tax form ez For more information, see Publication 525. Tax form ez Restricted Property In most cases, if you receive property for your services, you must include its fair market value in your income in the year you receive the property. Tax form ez However, if you receive stock or other property that has certain restrictions that affect its value, you do not include the value of the property in your income until it has substantially vested. Tax form ez (You can choose to include the value of the property in your income in the year it is transferred to you. Tax form ez ) For more information, see Restricted Property in Publication 525. Tax form ez Dividends received on restricted stock. Tax form ez   Dividends you receive on restricted stock are treated as compensation and not as dividend income. Tax form ez Your employer should include these payments on your Form W-2. Tax form ez Stock you chose to include in income. Tax form ez   Dividends you receive on restricted stock you chose to include in your income in the year transferred are treated the same as any other dividends. Tax form ez Report them on your return as dividends. Tax form ez For a discussion of dividends, see chapter 8. Tax form ez    For information on how to treat dividends reported on both your Form W-2 and Form 1099-DIV, see Dividends received on restricted stock in Publication 525. Tax form ez Special Rules for Certain Employees This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers. Tax form ez Clergy Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. Tax form ez , in addition to your salary. Tax form ez If the offering is made to the religious institution, it is not taxable to you. Tax form ez If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. Tax form ez However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. Tax form ez See chapter 24. Tax form ez Pension. Tax form ez    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. Tax form ez It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Tax form ez Housing. Tax form ez    Special rules for housing apply to members of the clergy. Tax form ez Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. Tax form ez However, the exclusion cannot be more than the reasonable pay for your service. Tax form ez If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. Tax form ez The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. Tax form ez However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. Tax form ez For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Tax form ez Members of Religious Orders If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order. Tax form ez Services performed for the order. Tax form ez   If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order. Tax form ez   If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. Tax form ez Any wages you earn as an agent of an order that you turn over to the order are not included in your income. Tax form ez Example. Tax form ez You are a member of a church order and have taken a vow of poverty. Tax form ez You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. Tax form ez You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. Tax form ez However, you remain under the general direction and control of the order. Tax form ez You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income. Tax form ez Services performed outside the order. Tax form ez   If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: They are the kind of services that are ordinarily the duties of members of the order. Tax form ez They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. Tax form ez If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. Tax form ez Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. Tax form ez Example. Tax form ez Mark Brown is a member of a religious order and has taken a vow of poverty. Tax form ez He renounces all claims to his earnings and turns over his earnings to the order. Tax form ez Mark is a schoolteacher. Tax form ez He was instructed by the superiors of the order to get a job with a private tax-exempt school. Tax form ez Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. Tax form ez Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. Tax form ez The wages Mark earns working for the school are included in his income. Tax form ez Foreign Employer Special rules apply if you work for a foreign employer. Tax form ez U. Tax form ez S. Tax form ez citizen. Tax form ez   If you are a U. Tax form ez S. Tax form ez citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income. Tax form ez Social security and Medicare taxes. Tax form ez   You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. Tax form ez However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. Tax form ez This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. Tax form ez Employees of international organizations or foreign governments. Tax form ez   Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). Tax form ez   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. Tax form ez You are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). Tax form ez Your work is like the work done by employees of the United States in foreign countries. Tax form ez The foreign government gives an equal exemption to employees of the United States in its country. Tax form ez Waiver of alien status. Tax form ez   If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. Tax form ez See Foreign Employer in Publication 525. Tax form ez Employment abroad. Tax form ez   For information on the tax treatment of income earned abroad, see Publication 54. Tax form ez Military Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. Tax form ez Allowances generally are not taxed. Tax form ez For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. Tax form ez Differential wage payments. Tax form ez   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. Tax form ez These wages are subject to income tax withholding and are reported on a Form W-2. Tax form ez See the discussion under Miscellaneous Compensation , earlier. Tax form ez Military retirement pay. Tax form ez   If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Tax form ez Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan. Tax form ez   For more detailed discussion of survivor annuities, see chapter 10. Tax form ez Disability. Tax form ez   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. Tax form ez Veterans' benefits. Tax form ez   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). Tax form ez The following amounts paid to veterans or their families are not taxable. Tax form ez Education, training, and subsistence allowances. Tax form ez Disability compensation and pension payments for disabilities paid either to veterans or their families. Tax form ez Grants for homes designed for wheelchair living. Tax form ez Grants for motor vehicles for veterans who lost their sight or the use of their limbs. Tax form ez Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. Tax form ez Interest on insurance dividends you leave on deposit with the VA. Tax form ez Benefits under a dependent-care assistance program. Tax form ez The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. Tax form ez Payments made under the compensated work therapy program. Tax form ez Any bonus payment by a state or political subdivision because of service in a combat zone. Tax form ez Volunteers The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions. Tax form ez Peace Corps. Tax form ez   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. Tax form ez Taxable allowances. Tax form ez   The following allowances must be included in your income and reported as wages: Allowances paid to your spouse and minor children while you are a volunteer leader training in the United States. Tax form ez Living allowances designated by the Director of the Peace Corps as basic compensation. Tax form ez These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. Tax form ez Leave allowances. Tax form ez Readjustment allowances or termination payments. Tax form ez These are considered received by you when credited to your account. Tax form ez Example. Tax form ez Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. Tax form ez Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. Tax form ez Volunteers in Service to America (VISTA). Tax form ez   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. Tax form ez National Senior Services Corps programs. Tax form ez   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. Tax form ez Retired Senior Volunteer Program (RSVP). Tax form ez Foster Grandparent Program. Tax form ez Senior Companion Program. Tax form ez Service Corps of Retired Executives (SCORE). Tax form ez   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. Tax form ez Volunteer tax counseling. Tax form ez   Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE). Tax form ez   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. Tax form ez See chapter 24. Tax form ez Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. Tax form ez In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. Tax form ez If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. Tax form ez However, certain payments may not be taxable to you. Tax form ez Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. Tax form ez In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. Tax form ez Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. Tax form ez Cost paid by you. Tax form ez   If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. Tax form ez If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. Tax form ez See Reimbursement in a later year in chapter 21. Tax form ez Cafeteria plans. Tax form ez   In most cases, if you are covered by an accident or health insurance plan through a cafeteria plan, and the amount of the insurance premiums was not included in your income, you are not considered to have paid the premiums and you must include any benefits you receive in your income. Tax form ez If the amount of the premiums was included in your income, you are considered to have paid the premiums, and any benefits you receive are not taxable. Tax form ez Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Tax form ez You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. Tax form ez Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Tax form ez You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Tax form ez For information on this credit and the definition of permanent and total disability, see chapter 33. Tax form ez Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Tax form ez Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Tax form ez The rules for reporting pensions are explained in How To Report in chapter 10. Tax form ez For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. Tax form ez Retirement and profit-sharing plans. Tax form ez   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Tax form ez The payments must be reported as a pension or annuity. Tax form ez For more information on pensions, see chapter 10. Tax form ez Accrued leave payment. Tax form ez   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Tax form ez The payment is not a disability payment. Tax form ez Include it in your income in the tax year you receive it. Tax form ez Military and Government Disability Pensions Certain military and government disability pensions are not taxable. Tax form ez Service-connected disability. Tax form ez   You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services. Tax form ez The armed forces of any country. Tax form ez The National Oceanic and Atmospheric Administration. Tax form ez The Public Health Service. Tax form ez The Foreign Service. Tax form ez Conditions for exclusion. Tax form ez   Do not include the disability payments in your income if any of the following conditions apply. Tax form ez You were entitled to receive a disability payment before September 25, 1975. Tax form ez You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975. Tax form ez You receive the disability payments for a combat-related injury. Tax form ez This is a personal injury or sickness that Results directly from armed conflict, Takes place while you are engaged in extra-hazardous service, Takes place under conditions simulating war, including training exercises such as maneuvers, or Is caused by an instrumentality of war. Tax form ez You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. Tax form ez Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. Tax form ez Pension based on years of service. Tax form ez   If you receive a disability pension based on years of service, in most cases you must include it in your income. Tax form ez However, if the pension qualifies for the exclusion for a service-connected disability (discussed earlier), do not include in income the part of your pension that you would have received if the pension had been based on a percentage of disability. Tax form ez You must include the rest of your pension in your income. Tax form ez Retroactive VA determination. Tax form ez   If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. Tax form ez You can claim a refund of any tax paid on the excludable amount (subject to the statute of limitations) by filing an amended return on Form 1040X for each previous year during the retroactive period. Tax form ez You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. Tax form ez The letter must show the amount withheld and the effective date of the benefit. Tax form ez   If you receive a lump-sum disability severance payment and are later awarded VA disability benefits, exclude 100% of the severance benefit from your income. Tax form ez However, you must include in your income any lump-sum readjustment or other nondisability severance payment you received on release from active duty, even if you are later given a retroactive disability rating by the VA. Tax form ez Special statute of limitations. Tax form ez   In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. Tax form ez However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended by a 1-year period beginning on the date of the determination. Tax form ez This 1-year extended period applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination. Tax form ez Example. Tax form ez You retired in 2007 and receive a pension based on your years of service. Tax form ez On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. Tax form ez Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. Tax form ez However, under the special limitation period, you can also file a claim for 2009 as long as you file the claim by August 1, 2014. Tax form ez You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. Tax form ez Terrorist attack or military action. Tax form ez   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. Tax form ez Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. Tax form ez Amounts you receive from them (other than policyholder dividends or premium refunds) in most cases are excludable from income as amounts received for personal injury or sickness. Tax form ez To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return. Tax form ez A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. Tax form ez The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits, and In most cases, not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. Tax form ez Qualified long-term care services. Tax form ez   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services, and Required by a chronically ill individual and provided pursuant to a plan of care as prescribed by a licensed health care practitioner. Tax form ez Chronically ill individual. Tax form ez   A chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as one of the following: An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. Tax form ez Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Tax form ez An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Tax form ez Limit on exclusion. Tax form ez   You generally can exclude from gross income up to $320 a day for 2013. Tax form ez See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. Tax form ez Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. Tax form ez The exemption also applies to your survivors. Tax form ez The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. Tax form ez If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Tax form ez For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Tax form ez Return to work. Tax form ez    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Tax form ez Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Tax form ez Railroad sick pay. Tax form ez    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. Tax form ez However, do not include them in your income if they are for an on-the-job injury. Tax form ez   If you received income because of a disability, see Disability Pensions , earlier. Tax form ez Federal Employees' Compensation Act (FECA). Tax form ez   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Tax form ez However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. Tax form ez Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. Tax form ez Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Tax form ez    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Tax form ez For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. Tax form ez    You can deduct the amount you spend to buy back sick leave for an earlier year to be eligible for nontaxable FECA benefits for that period. Tax form ez It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). Tax form ez If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. Tax form ez Do not deduct it separately. Tax form ez Other compensation. Tax form ez   Many other amounts you receive as compensation for sickness or injury are not taxable. Tax form ez These include the following amounts. Tax form ez Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. Tax form ez Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. Tax form ez Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Tax form ez Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. Tax form ez This compensation must be based only on the injury and not on the period of your absence from work. Tax form ez These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Tax form ez Reimbursement for medical care. Tax form ez    A reimbursement for medical care is generally not taxable. Tax form ez However, it may reduce your medical expense deduction. Tax form ez For more information, see chapter 21. 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IRS - Collecting Revenue

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These tables provide an overview of the main IRS functions: processing tax returns and collecting revenue. Much of these data are published by fiscal year; however, historical tax collection data are also available, as well as projections of returns to be filed in the future.

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Fiscal Year Data

The tables below were originally published in the IRS Data Book, which is IRS Publication 55B, and are complied by various divisions throughout the IRS. The IRS's fiscal year runs from October 1 to September 30.


Summary of Internal Revenue Collections

Internal Revenue Collections and Refunds
Internal Revenue collections and refunds, by type of tax, including corporation, individual, employment, estate, gift, and excise taxes.

Internal Revenue Gross Collections

Internal Revenue Gross Collections
These tables breakout the total taxes paid by type of tax, including corporation, individual, employment, estate & gift, and excise taxes.


Internal Revenue Gross Collections
Shown by state and by type of tax, including corporation, individual and employment, railroad retirement, unemployment insurance, estate, gift, and excise taxes.

•  Prior to 2000, gross collections were reported by IRS region and district, as shown in the tables below.

Fiscal Years available: 
1999    1998    1997    1996    1995

Summary of Number of Returns

Number of Returns Filed
These tables provide a summary of returns filed, by tax type, including income, estate, gift, employment, and excise taxes, as well as tax-exempt organizations, employee plan, and supplemental documents.

Number of Returns Filed
These tables provide a summary of returns filed, by tax type and state, including income, estate, gift, employment, and excise taxes, as well as tax-exempt organizations, employee plan, and supplemental documents.
by Type of Return and State

•  From 1995 to 1999, the number of returns filed are available by IRS region and district. 
by type of tax and fiscal years
1999     1998     1997     1996     1995

Number of Returns Filed Electronically, by Type of Return and State
The number of tax returns filed electronically is available broken out by state.  Also included are the breakouts for online filers and paid-preparer filed returns.

Selected Information from Returns Filed
For many years, IRS published information from filed returns.  Details cover the presidential election campaign fund, contributions to reduce public debt, the earned income tax credit, and IRS master file accounts.

Fiscal Years available:   
2005     2004     2003     2002     2001     2000     1999     1998     1997     1996     1995


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SOI Historical Tables

The following tables are part of the SOI Historical tables published in the SOI Bulletin.

Treasury Department Gross Tax Collections
Classified by: Amounts collected, by quarter and fiscal year, by type of return
Fiscal Years covered: 1987-2007
                                        
Federal Excise Taxes Reported to or Collected by the IRS, Alcohol and Tobacco Tax and Trade Bureau, and Customs Service

 

Classified by:

Fiscal Years
covered:

Type of excise tax (including luxury taxes, fuel, sport fishing equipment, environmental taxes, wine, beer, tobacco, etc.), by fiscal year

1999-2007

 


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Filing Projections for Selected Tax Returns

Projections of Federal Tax Return Filings: Calendar Years 2005-2012
                              
    • SOI Bulletin article This article discusses the return projections in detail, including the effects of new forms and e-file.  Projection highlights and methodology are also included.
                                                        
    • Data table Filing projections are broken out by form types and method of filing (where multiple options are available).

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Page Last Reviewed or Updated: 25-Feb-2014

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