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1040nr filing Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. 1040nr filing Gross monthly rate. 1040nr filing Your cost. 1040nr filing Choosing a survivor annuity after retirement. 1040nr filing Canceling a survivor annuity after retirement. 1040nr filing Annuity starting date after 1986. 1040nr filing Annuity starting date before 1987. 1040nr filing Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. 1040nr filing Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. 1040nr filing The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. 1040nr filing If the refund includes only your contributions, none of the refund is taxable. 1040nr filing If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). 1040nr filing If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040nr filing See Rollover Rules in Part II for information on how to make a rollover. 1040nr filing Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. 1040nr filing Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. 1040nr filing If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040nr filing If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. 1040nr filing For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040nr filing A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. 1040nr filing Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. 1040nr filing OPM will tell you how to make the choice. 1040nr filing The choice for no withholding remains in effect until you change it. 1040nr filing These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. 1040nr filing If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. 1040nr filing You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. 1040nr filing Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. 1040nr filing For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. 1040nr filing Form CSA 1099R. 1040nr filing   Form CSA 1099R is mailed to you by OPM each year. 1040nr filing It will show any tax you had withheld. 1040nr filing File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. 1040nr filing    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. 1040nr filing servicesonline. 1040nr filing opm. 1040nr filing gov. 1040nr filing To log in, you will need your retirement CSA claim number and your personal identification number. 1040nr filing Choosing no withholding on payments outside the United States. 1040nr filing   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. 1040nr filing   To choose no withholding if you are a U. 1040nr filing S. 1040nr filing citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. 1040nr filing Otherwise, OPM has to withhold tax. 1040nr filing For example, OPM must withhold if you provide a U. 1040nr filing S. 1040nr filing address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. 1040nr filing S. 1040nr filing home address. 1040nr filing   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. 1040nr filing S. 1040nr filing citizen, a U. 1040nr filing S. 1040nr filing resident alien, or someone who left the United States to avoid tax. 1040nr filing But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. 1040nr filing For details, see Publication 519, U. 1040nr filing S. 1040nr filing Tax Guide for Aliens. 1040nr filing Withholding certificate. 1040nr filing   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. 1040nr filing The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. 1040nr filing If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. 1040nr filing To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040nr filing C. 1040nr filing calling area must call 202-606-0500). 1040nr filing No special form is needed. 1040nr filing You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. 1040nr filing If you have TTY/TDD equipment, call 1-855–887–4957. 1040nr filing If you need a PIN, call OPM's Retirement Information Office. 1040nr filing You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. 1040nr filing servicesonline. 1040nr filing opm. 1040nr filing gov. 1040nr filing You will need your retirement CSA or CSF claim number and your PIN. 1040nr filing Withholding from certain lump-sum payments. 1040nr filing   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. 1040nr filing Tax will be withheld at a 20% rate on the interest distributed. 1040nr filing However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. 1040nr filing If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. 1040nr filing Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. 1040nr filing See Rollover Rules in Part II. 1040nr filing If you receive only your contributions, no tax will be withheld. 1040nr filing Withholding from Thrift Savings Plan payments. 1040nr filing   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. 1040nr filing The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. 1040nr filing  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. 1040nr filing By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. 1040nr filing   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. 1040nr filing The above document is also available in the “Forms & Publications” section of the TSP website at www. 1040nr filing tsp. 1040nr filing gov. 1040nr filing Estimated tax. 1040nr filing   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). 1040nr filing The return must cover all 12 months. 1040nr filing   You do not have to pay estimated tax for 2014 if you were a U. 1040nr filing S. 1040nr filing citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. 1040nr filing   Publication 505 contains information that you can use to help you figure your estimated tax payments. 1040nr filing Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. 1040nr filing The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. 1040nr filing Children. 1040nr filing   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. 1040nr filing   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. 1040nr filing Form CSF 1099R. 1040nr filing   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. 1040nr filing It will show the total amount of the annuity you received in the past year. 1040nr filing It also should show, separately, the survivor annuity for a child or children. 1040nr filing Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. 1040nr filing   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. 1040nr filing    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. 1040nr filing servicesonline. 1040nr filing opm. 1040nr filing gov. 1040nr filing To log in you will need your retirement CSF claim number and personal identification number. 1040nr filing    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040nr filing C. 1040nr filing calling area must call 202-606-0500). 1040nr filing You will need your CSF claim number and your social security number when you call. 1040nr filing Taxable part of annuity. 1040nr filing   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. 1040nr filing To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. 1040nr filing Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. 1040nr filing If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. 1040nr filing However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. 1040nr filing Annuity statement. 1040nr filing   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). 1040nr filing You will use this information to figure the tax-free recovery of your cost. 1040nr filing Annuity starting date. 1040nr filing   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. 1040nr filing If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. 1040nr filing Gross monthly rate. 1040nr filing   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. 1040nr filing Your cost. 1040nr filing   Your monthly annuity payment contains an amount on which you have previously paid income tax. 1040nr filing This amount represents part of your contributions to the retirement plan. 1040nr filing Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. 1040nr filing   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. 1040nr filing If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. 1040nr filing (See Lump-sum credit under Alternative Annuity Option, later. 1040nr filing )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. 1040nr filing You cannot claim an interest deduction for any interest payments. 1040nr filing You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. 1040nr filing Recovering your cost tax free. 1040nr filing   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. 1040nr filing If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. 1040nr filing If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). 1040nr filing If your annuity starting date is after November 18, 1996, you must use the Simplified Method. 1040nr filing   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). 1040nr filing The tax-free part is a fixed dollar amount. 1040nr filing It remains the same, even if your annuity is increased. 1040nr filing Generally, this rule applies as long as you receive your annuity. 1040nr filing However, see Exclusion limit , later. 1040nr filing Choosing a survivor annuity after retirement. 1040nr filing    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. 1040nr filing   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. 1040nr filing To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. 1040nr filing Figure the expected return as of the date the reduced annuity begins. 1040nr filing For details on the General Rule, see Publication 939. 1040nr filing Canceling a survivor annuity after retirement. 1040nr filing   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. 1040nr filing The increased annuity does not change the cost recovery you figured at the annuity starting date. 1040nr filing The tax-free part of each annuity payment remains the same. 1040nr filing    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040nr filing C. 1040nr filing calling area must call 202-606-0500). 1040nr filing Exclusion limit. 1040nr filing   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. 1040nr filing Annuity starting date after 1986. 1040nr filing   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. 1040nr filing Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. 1040nr filing Example. 1040nr filing Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. 1040nr filing If your cost is $12,000, the exclusion ends after 10 years (120 months). 1040nr filing Thereafter, your entire annuity is generally fully taxable. 1040nr filing Annuity starting date before 1987. 1040nr filing   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. 1040nr filing If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. 1040nr filing The total exclusion may be more than your cost. 1040nr filing Deduction of unrecovered cost. 1040nr filing   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. 1040nr filing The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). 1040nr filing If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. 1040nr filing Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. 1040nr filing (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. 1040nr filing ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. 1040nr filing The Simplified Method does not apply if your annuity starting date is before July 2, 1986. 1040nr filing Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. 1040nr filing This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040nr filing If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. 1040nr filing Worksheet A. 1040nr filing   Use Worksheet A. 1040nr filing Simplified Method (near the end of this publication), to figure your taxable annuity. 1040nr filing Be sure to keep the completed worksheet. 1040nr filing It will help you figure your taxable amounts for later years. 1040nr filing Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. 1040nr filing However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. 1040nr filing Line 2. 1040nr filing   See Your cost , earlier, for an explanation of your cost in the plan. 1040nr filing If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. 1040nr filing Line 3. 1040nr filing   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. 1040nr filing If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. 1040nr filing If your annuity starting date is before 1998, use Table 1. 1040nr filing Line 6. 1040nr filing   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. 1040nr filing If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. 1040nr filing Example. 1040nr filing Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. 1040nr filing His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. 1040nr filing He must use the Simplified Method to figure the tax-free part of his annuity benefits. 1040nr filing Bill's monthly annuity benefit is $1,000. 1040nr filing He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. 1040nr filing At his annuity starting date, he was 65 and Kathy was 57. 1040nr filing Bill's completed Worksheet A is shown later. 1040nr filing To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). 1040nr filing Bill keeps a copy of the completed worksheet for his records. 1040nr filing It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. 1040nr filing Bill's tax-free monthly amount is $100. 1040nr filing (See line 4 of the worksheet. 1040nr filing ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. 1040nr filing If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. 1040nr filing If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. 1040nr filing General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. 1040nr filing If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. 1040nr filing If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. 1040nr filing Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. 1040nr filing Figuring this percentage is complex and requires the use of actuarial tables. 1040nr filing For these tables and other information about using the General Rule, see Publication 939. 1040nr filing Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. 1040nr filing Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. 1040nr filing After your cost was recovered, all payments became fully taxable. 1040nr filing You cannot use another rule to again exclude amounts from income. 1040nr filing The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. 1040nr filing Worksheet A. 1040nr filing Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. 1040nr filing 1. 1040nr filing Enter the total pension or annuity payments received this year. 1040nr filing Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040nr filing $ 8,000 2. 1040nr filing Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040nr filing See Your cost in Part II, Rules for Retirees, earlier 2. 1040nr filing 31,000 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040nr filing Otherwise, go to line 3. 1040nr filing   3. 1040nr filing Enter the appropriate number from Table 1 below. 1040nr filing But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040nr filing 3. 1040nr filing 310 4. 1040nr filing Divide line 2 by the number on line 3 4. 1040nr filing 100 5. 1040nr filing Multiply line 4 by the number of months for which this year's payments were made. 1040nr filing If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040nr filing Otherwise, go to line 6 5. 1040nr filing 800 6. 1040nr filing Enter any amounts previously recovered tax free in years after 1986. 1040nr filing This is the amount shown on line 10 of your worksheet for last year 6. 1040nr filing 0 7. 1040nr filing Subtract line 6 from line 2 7. 1040nr filing 31,000 8. 1040nr filing Enter the smaller of line 5 or line 7 8. 1040nr filing 800 9. 1040nr filing Taxable amount for year. 1040nr filing Subtract line 8 from line 1. 1040nr filing Enter the result, but not less than zero. 1040nr filing Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040nr filing If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040nr filing If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040nr filing If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040nr filing $7,200 10. 1040nr filing Was your annuity starting date before 1987?   Yes. 1040nr filing Do not complete the rest of this worksheet. 1040nr filing    No. 1040nr filing Add lines 6 and 8. 1040nr filing This is the amount you have recovered tax free through 2013. 1040nr filing You will need this number if you need to fill out this worksheet next year 10. 1040nr filing 800 11. 1040nr filing Balance of cost to be recovered. 1040nr filing Subtract line 10 from line 2. 1040nr filing If zero, you will not have to complete this worksheet next year. 1040nr filing The payments you receive next year will generally be fully taxable 11. 1040nr filing $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040nr filing Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. 1040nr filing If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. 1040nr filing You are eligible to make this choice if you meet all of the following requirements. 1040nr filing You are retiring, but not on disability. 1040nr filing You have a life-threatening illness or other critical medical condition. 1040nr filing You do not have a former spouse entitled to court ordered benefits based on your service. 1040nr filing If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. 1040nr filing Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. 1040nr filing The tax-free part represents part of your cost. 1040nr filing The taxable part represents part of the earnings on your annuity contract. 1040nr filing Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. 1040nr filing Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. 1040nr filing Your taxable amount may therefore be more than the lump-sum payment you receive. 1040nr filing You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. 1040nr filing If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040nr filing See Rollover Rules , later, for information on how to make a rollover. 1040nr filing OPM can make a direct rollover only up to the amount of the lump-sum payment. 1040nr filing Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. 1040nr filing The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040nr filing It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. 1040nr filing For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040nr filing Worksheet B. 1040nr filing   Use Worksheet B. 1040nr filing Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. 1040nr filing Be sure to keep the completed worksheet for your records. 1040nr filing   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. 1040nr filing Lump-sum credit. 1040nr filing   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). 1040nr filing However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. 1040nr filing Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. 1040nr filing Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. 1040nr filing You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. 1040nr filing Present value of your annuity contract. 1040nr filing   The present value of your annuity contract is figured using actuarial tables provided by the IRS. 1040nr filing If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. 1040nr filing Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. 1040nr filing , NW Washington, DC 20224-0002 Example. 1040nr filing David Brown retired from the federal government in 2013, one month after his 55th birthday. 1040nr filing He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. 1040nr filing The present value of his annuity contract was $155,000. 1040nr filing The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. 1040nr filing The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. 1040nr filing See Reduced Annuity , later. 1040nr filing Worksheet B. 1040nr filing Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . 1040nr filing  1. 1040nr filing Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. 1040nr filing $ 31,000 2. 1040nr filing Enter the present value of your annuity contract 2. 1040nr filing 155,000 3. 1040nr filing Divide line 1 by line 2 3. 1040nr filing . 1040nr filing 20 4. 1040nr filing Tax-free amount. 1040nr filing Multiply line 1 by line 3. 1040nr filing (Caution: Do not include this amount on line 6 of Worksheet A in this publication. 1040nr filing ) 4. 1040nr filing $6,200 5. 1040nr filing Taxable amount (net cost in the plan). 1040nr filing Subtract line 4 from line 1. 1040nr filing Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040nr filing Also, enter this amount on line 2 of Worksheet A in this publication. 1040nr filing 5. 1040nr filing $24,800   Lump-sum payment in installments. 1040nr filing   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. 1040nr filing You will receive the first installment after you make the choice upon retirement. 1040nr filing The second installment will be paid to you, with interest, in the next calendar year. 1040nr filing (Exceptions to the installment rule are provided for cases of critical medical need. 1040nr filing )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. 1040nr filing If the payment has a tax-free part, you must treat the taxable part as received first. 1040nr filing How to report. 1040nr filing   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. 1040nr filing Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. 1040nr filing    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. 1040nr filing Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. 1040nr filing These annuity payments each will have a tax-free and a taxable part. 1040nr filing To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). 1040nr filing For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. 1040nr filing To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. 1040nr filing Enter as your net cost on line 2 the amount from Worksheet B, line 5. 1040nr filing Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040nr filing Example. 1040nr filing The facts are the same as in the example for David Brown in the preceding discussion. 1040nr filing In addition, David received 10 annuity payments in 2013 of $1,200 each. 1040nr filing Using Worksheet A, he figures the taxable part of his annuity payments. 1040nr filing He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. 1040nr filing His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). 1040nr filing He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. 1040nr filing David's filled-in Worksheet A is shown on the next page. 1040nr filing Worksheet A. 1040nr filing Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . 1040nr filing 1. 1040nr filing Enter the total pension or annuity payments received this year. 1040nr filing Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040nr filing $ 12,000 2. 1040nr filing Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040nr filing See Your cost in Part II, Rules for Retirees, earlier 2. 1040nr filing 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040nr filing Otherwise, go to line 3. 1040nr filing   3. 1040nr filing Enter the appropriate number from Table 1 below. 1040nr filing But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040nr filing 3. 1040nr filing 360 4. 1040nr filing Divide line 2 by the number on line 3 4. 1040nr filing 68. 1040nr filing 89 5. 1040nr filing Multiply line 4 by the number of months for which this year's payments were made. 1040nr filing If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040nr filing Otherwise, go to line 6 5. 1040nr filing 688. 1040nr filing 90 6. 1040nr filing Enter any amounts previously recovered tax free in years after 1986. 1040nr filing This is the amount shown on line 10 of your worksheet for last year 6. 1040nr filing 0 7. 1040nr filing Subtract line 6 from line 2 7. 1040nr filing 24,800 8. 1040nr filing Enter the smaller of line 5 or line 7 8. 1040nr filing 688. 1040nr filing 90 9. 1040nr filing Taxable amount for year. 1040nr filing Subtract line 8 from line 1. 1040nr filing Enter the result, but not less than zero. 1040nr filing Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040nr filing If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040nr filing If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040nr filing If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040nr filing $11,311. 1040nr filing 10 10. 1040nr filing Was your annuity starting date before 1987?   Yes. 1040nr filing Do not complete the rest of this worksheet. 1040nr filing    No. 1040nr filing Add lines 6 and 8. 1040nr filing This is the amount you have recovered tax free through 2013. 1040nr filing You will need this number if you need to fill out this worksheet next year 10. 1040nr filing 688. 1040nr filing 90 11. 1040nr filing Balance of cost to be recovered. 1040nr filing Subtract line 10 from line 2. 1040nr filing If zero, you will not have to complete this worksheet next year. 1040nr filing The payments you receive next year will generally be fully taxable 11. 1040nr filing $24,111. 1040nr filing 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040nr filing Reemployment after choosing the alternative annuity option. 1040nr filing If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. 1040nr filing If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. 1040nr filing Annuity starting date before November 19, 1996. 1040nr filing   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. 1040nr filing Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. 1040nr filing However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040nr filing Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. 1040nr filing The gift may be taxable for gift tax purposes. 1040nr filing The value of the gift is equal to the value of the annuity. 1040nr filing Joint and survivor annuity. 1040nr filing   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. 1040nr filing This will eliminate any gift tax liability with regard to that gift. 1040nr filing   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. 1040nr filing This may result in a taxable gift. 1040nr filing More information. 1040nr filing   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. 1040nr filing Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. 1040nr filing Annual leave. 1040nr filing   A payment for accrued annual leave received on retirement is a salary payment. 1040nr filing It is taxable as wages in the tax year you receive it. 1040nr filing Voluntary contributions. 1040nr filing   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. 1040nr filing They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. 1040nr filing Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. 1040nr filing See Thrift Savings Plan , later. 1040nr filing Additional annuity benefit. 1040nr filing   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. 1040nr filing This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. 1040nr filing It does not matter that you receive only one monthly check covering both benefits. 1040nr filing Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. 1040nr filing   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. 1040nr filing Refund of voluntary contributions. 1040nr filing   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. 1040nr filing If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. 1040nr filing See Rollover Rules , later. 1040nr filing The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040nr filing It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. 1040nr filing For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040nr filing Community property laws. 1040nr filing   State community property laws apply to your annuity. 1040nr filing These laws will affect your income tax only if you file a return separately from your spouse. 1040nr filing   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. 1040nr filing Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. 1040nr filing   At any time, you have only one domicile even though you may have more than one home. 1040nr filing Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. 1040nr filing The question of your domicile is mainly a matter of your intentions as indicated by your actions. 1040nr filing   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. 1040nr filing The division is based on your periods of service and domicile in community and noncommunity property states while you were married. 1040nr filing   For more information, see Publication 555, Community Property. 1040nr filing Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. 1040nr filing The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. 1040nr filing This amount is taxable as wages. 1040nr filing Your annuity will continue to be taxed just as it was before. 1040nr filing If you are still recovering your cost, you continue to do so. 1040nr filing If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. 1040nr filing Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. 1040nr filing A nonresident alien is an individual who is not a citizen or a resident alien of the United States. 1040nr filing Special rule for figuring your total contributions. 1040nr filing   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. 1040nr filing You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. 1040nr filing For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. 1040nr filing Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. 1040nr filing   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. 1040nr filing Limit on taxable amount. 1040nr filing   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. 1040nr filing Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. 1040nr filing The numerator of the fraction is the retiree's total U. 1040nr filing S. 1040nr filing Government basic pay, other than tax-exempt pay for services performed outside the United States. 1040nr filing The denominator is the retiree's total U. 1040nr filing S. 1040nr filing Government basic pay for all services. 1040nr filing    Basic pay includes regular pay plus any standby differential. 1040nr filing It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. 1040nr filing   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. 1040nr filing (For an annuity, first complete Worksheet A in this publication. 1040nr filing ) Worksheet C. 1040nr filing Limited Taxable Amount for Nonresident Alien 1. 1040nr filing Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040nr filing   2. 1040nr filing Enter the total U. 1040nr filing S. 1040nr filing Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040nr filing   3. 1040nr filing Enter the total U. 1040nr filing S. 1040nr filing Government basic pay for all services 3. 1040nr filing   4. 1040nr filing Divide line 2 by line 3 4. 1040nr filing   5. 1040nr filing Limited taxable amount. 1040nr filing Multiply line 1 by line 4. 1040nr filing Enter this amount on Form 1040NR, line 17b 5. 1040nr filing   Example 1. 1040nr filing You are a nonresident alien who performed all services for the U. 1040nr filing S. 1040nr filing Government abroad as a nonresident alien. 1040nr filing You retired and began to receive a monthly annuity of $200. 1040nr filing Your total basic pay for all services for the U. 1040nr filing S. 1040nr filing Government was $100,000. 1040nr filing All of your basic pay was tax exempt because it was not U. 1040nr filing S. 1040nr filing source income. 1040nr filing The taxable amount of your annuity using Worksheet A in this publication is $720. 1040nr filing You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040nr filing Worksheet C. 1040nr filing Limited Taxable Amount for Nonresident Alien — Example 1 1. 1040nr filing Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040nr filing $ 720 2. 1040nr filing Enter the total U. 1040nr filing S. 1040nr filing Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040nr filing 0 3. 1040nr filing Enter the total U. 1040nr filing S. 1040nr filing Government basic pay for all services 3. 1040nr filing 100,000 4. 1040nr filing Divide line 2 by line 3 4. 1040nr filing 0 5. 1040nr filing Limited taxable amount. 1040nr filing Multiply line 1 by line 4. 1040nr filing Enter this amount on Form 1040NR, line 17b 5. 1040nr filing 0 Example 2. 1040nr filing You are a nonresident alien who performed services for the U. 1040nr filing S. 1040nr filing Government as a nonresident alien both within the United States and abroad. 1040nr filing You retired and began to receive a monthly annuity of $240. 1040nr filing Your total basic pay for your services for the U. 1040nr filing S. 1040nr filing Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. 1040nr filing The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. 1040nr filing S. 1040nr filing source income. 1040nr filing The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. 1040nr filing You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040nr filing Worksheet C. 1040nr filing Limited Taxable Amount for Nonresident Alien — Example 2 1. 1040nr filing Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040nr filing $ 1,980 2. 1040nr filing Enter the total U. 1040nr filing S. 1040nr filing Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040nr filing 40,000 3. 1040nr filing Enter the total U. 1040nr filing S. 1040nr filing Government basic pay for all services 3. 1040nr filing 120,000 4. 1040nr filing Divide line 2 by line 3 4. 1040nr filing . 1040nr filing 333 5. 1040nr filing Limited taxable amount. 1040nr filing Multiply line 1 by line 4. 1040nr filing Enter this amount on Form 1040NR, line 17b 5. 1040nr filing 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. 1040nr filing (However, see Roth TSP balance and Uniformed services TSP accounts, next. 1040nr filing ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. 1040nr filing The way that you withdraw your account balance determines when you must pay the tax. 1040nr filing Roth TSP balance. 1040nr filing   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. 1040nr filing This means Roth TSP contributions are included in your income. 1040nr filing The contribution limits are the same as the traditional TSP. 1040nr filing You can elect to have part or all of your TSP contributions designated as a Roth TSP. 1040nr filing Agency contributions will be part of your traditional TSP balance. 1040nr filing Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. 1040nr filing   Qualified distributions from your Roth TSP are not included in income. 1040nr filing This applies to both your cost in the account and income earned on that account. 1040nr filing A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. 1040nr filing   For more information, go to the TSP website, www. 1040nr filing tsp. 1040nr filing gov, or the TSP Service Office. 1040nr filing See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. 1040nr filing Uniformed services TSP accounts. 1040nr filing   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. 1040nr filing However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. 1040nr filing See Roth TSP balance discussed previously to get more information about Roth contributions. 1040nr filing The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. 1040nr filing You can get more information from the TSP website, www. 1040nr filing tsp. 1040nr filing gov, or the TSP Service Office. 1040nr filing Direct rollover by the TSP. 1040nr filing   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. 1040nr filing However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040nr filing Also, see Rollover Rules , later. 1040nr filing Direct rollover by the TSP to a Roth IRA. 1040nr filing   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. 1040nr filing However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040nr filing Also, see Rollovers to Roth IRAs for more information, later. 1040nr filing Note. 1040nr filing A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. 1040nr filing This is because you already paid tax on those contributions. 1040nr filing You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. 1040nr filing TSP annuity. 1040nr filing   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. 1040nr filing The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. 1040nr filing However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. 1040nr filing See Roth TSP balance , earlier. 1040nr filing This is because you already paid tax on those contributions. 1040nr filing Cash withdrawals. 1040nr filing   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. 1040nr filing (See Rollover Rules , later. 1040nr filing ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. 1040nr filing See Lump-Sum Distributions in Publication 575 for details. 1040nr filing However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. 1040nr filing See Roth TSP balance , earlier. 1040nr filing    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. 1040nr filing   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. 1040nr filing If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. 1040nr filing See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. 1040nr filing However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. 1040nr filing See Roth TSP balance , earlier, for a discussion of those conditions. 1040nr filing Tax on early distributions. 1040nr filing   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. 1040nr filing However, this additional tax does not apply in certain situations, including any of the following. 1040nr filing You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. 1040nr filing You choose to receive your account balance in monthly payments based on your life expectancy. 1040nr filing You are totally and permanently disabled. 1040nr filing You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). 1040nr filing The earnings may be subject to the 10% tax depending on whether you met certain conditions. 1040nr filing See Roth TSP balance , earlier. 1040nr filing   For more information, see Tax on Early Distributions in Publication 575. 1040nr filing Outstanding loan. 1040nr filing   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. 1040nr filing The distribution also may be subject to the additional 10% tax on early distributions. 1040nr filing However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. 1040nr filing See Rollover Rules , later. 1040nr filing   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. 1040nr filing However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. 1040nr filing See Roth TSP balance , earlier. 1040nr filing More information. 1040nr filing   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. 1040nr filing Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). 1040nr filing    The above documents are also available on the TSP website at www. 1040nr filing tsp. 1040nr filing gov. 1040nr filing Select “Forms & Publications. 1040nr filing ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. 1040nr filing You do not include the amount rolled over in your income, and you cannot take a deduction for it. 1040nr filing The amount rolled over is taxed later as the new program pays that amount to you. 1040nr filing If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. 1040nr filing However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. 1040nr filing To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. 1040nr filing You can also roll over a distribution from a qualified retirement plan into a Roth IRA. 1040nr filing Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. 1040nr filing See Rollovers to Roth IRAs , later, for more information. 1040nr filing Qualified retirement plan. 1040nr filing   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. 1040nr filing The CSRS, FERS, and TSP are considered qualified retirement plans. 1040nr filing Distributions eligible for rollover treatment. 1040nr filing   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. 1040nr filing You cannot roll over any part of your CSRS or FERS annuity payments. 1040nr filing   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. 1040nr filing   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. 1040nr filing However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. 1040nr filing Direct rollover option. 1040nr filing   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. 1040nr filing   There is an automatic rollover requirement for mandatory distributions. 1040nr filing A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. 1040nr filing The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. 1040nr filing You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. 1040nr filing If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. 1040nr filing No tax withheld. 1040nr filing   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. 1040nr filing However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. 1040nr filing Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. 1040nr filing Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. 1040nr filing Payment to you option. 1040nr filing   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. 1040nr filing However, the full amount is treated as distributed to you even though you actually receive only 80%. 1040nr filing You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. 1040nr filing Rollovers to Roth IRAs are generally included in income. 1040nr filing Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. 1040nr filing If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. 1040nr filing However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). 1040nr filing Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. 1040nr filing See Roth TSP balance , earlier. 1040nr filing Also, see Tax on Early Distributions in Publication 575. 1040nr filing Exception to withholding. 1040nr filing   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. 1040nr filing Partial rollovers. 1040nr filing   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. 1040nr filing See Lump-Sum Distributions in Publication 575. 1040nr filing However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. 1040nr filing Rolling over more than amount received. 1040nr filing   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). 1040nr filing Example. 1040nr filing You left government service at age 53. 1040nr filing On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you
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Page Last Reviewed or Updated: 14-Mar-2014

The 1040nr Filing

1040nr filing 2. 1040nr filing   Filing Requirements and Required Disclosures Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Annual Information ReturnsSupporting Organization Annual Information Return Unrelated Business Income Tax ReturnEstimated tax. 1040nr filing Employment Tax ReturnsException. 1040nr filing FUTA tax exception. 1040nr filing FICA tax exemption election. 1040nr filing Revoking the election. 1040nr filing Definitions. 1040nr filing Effect on employees. 1040nr filing Political Organization Income Tax ReturnExempt function. 1040nr filing Political organization taxable income. 1040nr filing Separate fund. 1040nr filing Failure to file. 1040nr filing Failure to pay on time. 1040nr filing Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. 1040nr filing Publicly traded securities. 1040nr filing Exceptions. 1040nr filing Form 8283. 1040nr filing Information Provided to DonorsDisclosure of Quid Pro Quo Contributions Acknowledgment of Charitable Contributions of $250 or More Acknowledgment of Vehicle Contribution Qualified Intellectual Property Report of Cash Received Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting FormsAnnual Information Return Public Inspection of Exemption Application Political Organization Reporting Forms Required DisclosuresSolicitation of Nondeductible Contributions Sales of Information or Services Available Free From Government Dues Used for Lobbying or Political Activities Prohibited Tax Shelter Transactions Miscellaneous RulesOrganizational Changes and Exempt Status Introduction Most exempt organizations (including private foundations) must file various returns and reports at some time during (or following the close of) their accounting period. 1040nr filing Topics - This chapter discusses: Annual information returns Unrelated business income tax return Employment tax returns Political organization income tax return Reporting requirements for a political organization Donee information return Information provided to donors Report of cash received Public inspection of exemption applications, annual returns, and political organizations reporting forms Required disclosures Miscellaneous rules Useful Items - You may want to see: Publication 15 Circular E, Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 598 Tax on Unrelated Business Income of Exempt Organizations Form (and Instructions) 941 Employer's Quarterly Federal Tax Return 990 Return of Organization Exempt From Income Tax 990-EZ Short Form Return of Organization Exempt From Income Tax Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support Schedule B (Form 990, 990-EZ, or 990-PF) Schedule of Contributors Schedule C (Form 990 or 990-EZ) Political Campaign and Lobbying Activities Schedule D (Form 990) Supplemental Financial Statements Schedule E (Form 990 or 990-EZ) Schools Schedule F (Form 990) Statement of Activities Outside the United States Schedule G (Form 990 or 990-EZ) Supplemental Information Regarding Fundraising or Gaming Activities Schedule H (Form 990) Hospitals Schedule I (Form 990) Grants and Other Assistance to Organizations, Governments, and Individuals in the United States Schedule J (Form 990) Compensation Information Schedule K (Form 990) Supplemental Information on Tax-Exempt Bonds Schedule L (Form 990 or 990-EZ) Transactions With Interested Persons Schedule M (Form 990) Noncash Contributions Schedule N (Form 990 or 990-EZ) Liquidation, Termination, Dissolution, or Significant Disposition of Assets Schedule O (Form 990 or 990-EZ) Supplemental Information to Form 990 Schedule R (Form 990) Related Organizations and Unrelated Partnerships 990-PF Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation 990-BL Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons 990-T Exempt Organization Business Income Tax Return 990-W Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations 1120-POL U. 1040nr filing S. 1040nr filing Income Tax Return for Certain Political Organizations 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code 5768 Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation 6069 Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption from Employer Social Security and Medicare Taxes 8282 Donee Information Return 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8453-X Political Organization Declaration for Electronic Filing of Notice of Section 527 Status 8822-B Change of Address-Business 8868 Application for Extension of Time to File an Exempt Organization Return 8870 Information Return for Transfers Associated with Certain Personal Benefits Contracts 8871 Political Organization Notice of Section 527 Status 8872 Political Organization Report of Contributions and Expenditures 8886-T Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction 8899 Notice of Income from Donated Intellectual Property 8940 Request for Miscellaneous Determination See chapter 6 for information about getting these publications and forms. 1040nr filing Annual Information Returns Every organization exempt from federal income tax under section 501(a) must file an Annual Exempt Organization Return except: A church, an interchurch organization of local units of a church, a convention or association of churches, An integrated auxiliary of a church, A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs, A school below college level affiliated with a church or operated by a religious order, Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries, An exclusively religious activity of any religious order, A state institution, the income of which is excluded from gross income under section 115, A corporation described in section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States, and is exempt from Federal income taxes, A stock bonus, pension, or profit-sharing trust that qualifies under section 401 (required to file Form 5500, Annual Return/Report of Employee Benefit Plan), A religious or apostolic organization described in section 501(d) (required to file Form 1065, U. 1040nr filing S. 1040nr filing Return of Partnership Income), A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48, 1995-2 C. 1040nr filing B. 1040nr filing 418, www. 1040nr filing irs. 1040nr filing gov/pub/irs-tege/rp1995-48. 1040nr filing pdf, A private foundation described in section 501(c)(3) and exempt under section 501(a) (required to file Form 990-PF, Return of Private Foundation), A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee, An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less, or A foreign organization, or an organization located in a U. 1040nr filing S. 1040nr filing possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. 1040nr filing Supporting Organization Annual Information Return For tax years ending after August 17, 2006, all section 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ with the IRS regardless of the organization's gross receipts, unless it qualifies as one of the following: An integrated auxiliary of a church; The exclusively religious activities of a religious order; or An organization, the gross receipts of which are normally not more than $5,000, that supports a section 509(a)(3) religious order. 1040nr filing If the organization is described in item (3) above, then it must submit Form 990-N (e-Postcard) unless it voluntarily files Form 990 or 990-EZ. 1040nr filing On its annual information return, at Part I, Schedule A (Form 990 or 990-EZ) a supporting organization must: List the section 509(a)(3) organizations to which it provides support, Indicate whether it is a Type I, Type II, or Type III supporting organization, and Certify that the organization is not controlled directly or indirectly by disqualified persons (other than by foundation managers and other than one or more publicly supported organizations). 1040nr filing Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Small tax-exempt organizations with annual gross receipts normally $50,000 or less must submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, with the IRS each year, if they choose not to file a Form 990 or 990-EZ. 1040nr filing Form 990-N requires the following information: The organization's legal name, and mailing address; Any name under which it operates and does business; Its Internet website address (if any); Its taxpayer identification number; The name and address of a principal officer; Organization's annual tax period; Verification that the organization's annual gross receipts are normally $50,000 or less; and Notification if the organization has terminated. 1040nr filing Form 990-N is due by the 15th day of the fifth month after the close of the tax year. 1040nr filing For tax years beginning after December 31, 2006, any organization that fails to meet its annual reporting requirement for 3 consecutive years will automatically lose its tax-exempt status. 1040nr filing To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. 1040nr filing Exceptions. 1040nr filing   This filing requirement does not apply to: Churches, their integrated auxiliaries, and conventions or associations of churches; Organizations that are included in a group return; Private foundations required to file Form 990-PF; and Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. 1040nr filing Forms 990 and 990-EZ Exempt organizations, other than private foundations, must file their annual information returns on Form 990 or 990-EZ, unless excepted from filing or allowed to submit Form 990-N, described earlier. 1040nr filing Generally, political organizations with gross receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or more for the tax year are required to file Form 990 or 990-EZ unless specifically excepted from filing the annual return. 1040nr filing The following political organizations are not required to file Form 990 or Form 990-EZ. 1040nr filing A state or local committee of a political party. 1040nr filing A political committee of a state or local candidate. 1040nr filing A caucus or association of state or local officials. 1040nr filing A political organization that is required to report as a political committee under the Federal Election Campaign Act. 1040nr filing A 501(c) organization that has expenditures for influencing or attempting to influence the selection, nomination, election, or appointment of any individual for a federal, state, or local public office. 1040nr filing Form 990-EZ. 1040nr filing   This is a shortened version of Form 990. 1040nr filing It is designed for use by small exempt organizations and nonexempt charitable trusts. 1040nr filing   Beginning in tax year 2010, an organization can file either Form 990 or 990-EZ if it meets the following: Its gross receipts during the year are less than $200,000. 1040nr filing Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. 1040nr filing If your organization does not meet either of these conditions, you cannot file Form 990-EZ. 1040nr filing Instead you must file Form 990. 1040nr filing Group return. 1040nr filing   A group return on Form 990 may be filed by a central, parent, or like organization for two or more local organizations, none of which is a private foundation. 1040nr filing This return is in addition to the central organization's separate annual return if it must file a return. 1040nr filing It cannot be included in the group return. 1040nr filing See the instructions for Form 990 for the conditions under which this procedure may be used. 1040nr filing    In any year that an organization is properly included as a subordinate organization on a group return, it should not file its own Form 990. 1040nr filing Schedule A (Form 990 or 990-EZ). 1040nr filing   Organizations, other than private foundations, that are described in section 501(c)(3) and that are otherwise required to file Form 990 or 990-EZ must also complete Schedule A of that form. 1040nr filing Schedule B (Form 990, Form 990-EZ, or 990-PF). 1040nr filing   Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. 1040nr filing Schedule O (Form 990). 1040nr filing   Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. 1040nr filing   Other schedules may be required to be filed with Form 990 or 990-EZ. 1040nr filing See the instructions for Form 990 or the instructions for Form 990-EZ for more information. 1040nr filing Report significant new or changed program services and changes to organizational documents. 1040nr filing    An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to EO Determinations. 1040nr filing EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents. 1040nr filing See Miscellaneous Rules, Organization Changes and Exempt Status, later. 1040nr filing Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. 1040nr filing These organizations are discussed in chapter 3. 1040nr filing Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. 1040nr filing If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. 1040nr filing See Regulations section 301. 1040nr filing 6033-4 for more information. 1040nr filing The IRS may waive the requirement to file electronically in cases of undue hardship. 1040nr filing For information on filing a waiver, see Notice 2010-13, 2010-4 I. 1040nr filing R. 1040nr filing B. 1040nr filing 327, available at www. 1040nr filing irs. 1040nr filing gov/ir/2010-04_IRSB/ar14. 1040nr filing html. 1040nr filing Form 990. 1040nr filing   An organization is required to file Form 990 electronically if it files at least 250 returns during the calendar year and has total assets of $10 million or more at the end of the tax year. 1040nr filing Form 990-PF. 1040nr filing   An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. 1040nr filing Due Date Forms 990, 990-EZ, or 990-PF must be filed by the 15th day of the fifth month after the end of your organization's accounting period. 1040nr filing Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. 1040nr filing Extension of time to file. 1040nr filing   Use Form 8868 to request an automatic 3-month extension of time to file Forms 990, 990-EZ, or 990-PF and also to apply for an additional (not automatic) 3-month extension if needed. 1040nr filing   Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. 1040nr filing For more information, see Form 8868 and its instructions. 1040nr filing   When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. 1040nr filing However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. 1040nr filing Application for exemption pending. 1040nr filing   An organization that claims to be exempt under section 501(a) but has not established its exempt status by the due date for filing an information return must complete and file Form 990, 990-EZ, 990–N or 990-PF (if it considers itself a private foundation), unless the organization is exempt from Form 990-series filing requirements. 1040nr filing If the organization's application is pending with the IRS, it must so indicate on Forms 990, 990-EZ, or 990-PF (whichever applies) by checking the application pending block at the top of page 1 of the return. 1040nr filing For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. 1040nr filing State reporting requirements. 1040nr filing   Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. 1040nr filing See the instructions for those forms. 1040nr filing Form 8870. 1040nr filing   Organizations that filed a Form 990, 990-EZ, or 990-PF, and paid premiums or received transfers on certain life insurance, annuity, and endowment contracts (personal benefit contracts), must file Form 8870. 1040nr filing For more information, see Form 8870 and the instructions for that form. 1040nr filing Automatic Revocation If the organization fails to file a Form 990, 990-EZ, or 990-PF, or fails to submit a Form 990-N, as required, for 3 consecutive years, it will automatically lose its tax-exempt status by operation of law. 1040nr filing The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. 1040nr filing gov. 1040nr filing This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. 1040nr filing The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. 1040nr filing It also includes the effective date of the automatic revocation and the date it was posted to the list. 1040nr filing The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. 1040nr filing Tax Effect of Loss of Tax-Exempt Status If your organization’s tax-exempt status is automatically revoked, you may be required to file one of the following federal income tax returns and pay any applicable income taxes: Form 1120, U. 1040nr filing S. 1040nr filing Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of your organization’s tax year, or Form 1041, U. 1040nr filing S. 1040nr filing Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of your organization’s tax year. 1040nr filing In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to received tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database). 1040nr filing An organization whose exemption was automatically revoked must apply for tax exemption in order to regain its tax exemption (even if it was not originally required to apply). 1040nr filing In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. 1040nr filing For more information about automatic revocation, go to IRS. 1040nr filing gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. 1040nr filing Penalties Penalties for failure to file. 1040nr filing   Generally, an exempt organization that fails to file a required return must pay a penalty of $20 a day for each day the failure continues. 1040nr filing The same penalty will apply if the organization does not give all the information required on the return or does not give the correct information. 1040nr filing Maximum penalty. 1040nr filing   The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. 1040nr filing Organization with gross receipts over $1 million. 1040nr filing   For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000. 1040nr filing Managers. 1040nr filing   If the organization is subject to this penalty, the IRS may specify a date by which the return or correct information must be supplied by the organization. 1040nr filing Failure to comply with this demand will result in a penalty imposed upon the manager of the organization, or upon any other person responsible for filing a correct return. 1040nr filing The penalty is $10 a day for each day that a return is not filed after the period given for filing. 1040nr filing The maximum penalty imposed on all persons with respect to any one return is $5,000. 1040nr filing Exception for reasonable cause. 1040nr filing   No penalty will be imposed if reasonable cause for failure to file timely can be shown. 1040nr filing Unrelated Business Income Tax Return Even though your organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. 1040nr filing Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. 1040nr filing If your organization has $1,000 or more of unrelated business income, you must file Form 990-T in addition to your required annual information return. 1040nr filing Estimated tax. 1040nr filing   Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. 1040nr filing Use Form 990-W to figure your organization's estimated tax payments. 1040nr filing Travel tour programs. 1040nr filing   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose to which tax exemption was granted to the organization. 1040nr filing   Whether travel tour activities conducted by an organization are substantially related to the organization's tax exempt purpose is determined by looking at all the relevant facts and circumstances, including, but not limited to, how a travel tour is developed, promoted, and operated. 1040nr filing Example. 1040nr filing ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). 1040nr filing As part of its activities, ABC operates a travel tour program. 1040nr filing The program is open to all current members of ABC and their guests. 1040nr filing ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. 1040nr filing Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. 1040nr filing XYZ pays ABC a per person fee for each participant. 1040nr filing Although the literature advertising the tours encourages ABC members to continue their lifelong learning by joining the tours, and a faculty member of ABC's related university frequently joins the tour as a guest of the alumni association, none of the tours include any scheduled instruction or curriculum related to the destinations being visited. 1040nr filing The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. 1040nr filing Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. 1040nr filing Therefore, ABC's tour program is an unrelated trade or business. 1040nr filing For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. 1040nr filing Employment Tax Returns Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA), unless that employer is specifically excepted by law from those requirements, or if the taxes clearly do not apply. 1040nr filing For more information, obtain a copy of Publication 15, which summarizes the responsibilities of an employer, Publication 15-A, Publication 15-B, and Form 941. 1040nr filing Small Business Health Care Tax Credit. 1040nr filing   If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. 1040nr filing Go to IRS. 1040nr filing gov and select Affordable Care Act Tax Provisions for more details. 1040nr filing See Small Business Health Care Tax Credit at www. 1040nr filing irs. 1040nr filing gov/newsroom/article/0,,id=223666,00. 1040nr filing html. 1040nr filing Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. 1040nr filing   The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). 1040nr filing The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer's share of social security tax. 1040nr filing The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. 1040nr filing This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. 1040nr filing   The credit can be as high as $6,240 for qualified tax-exempt organizations. 1040nr filing The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. 1040nr filing The amount of the credit for qualified tax-exempt organizations may not exceed the organization's employer social security tax for the period for which the credit is claimed. 1040nr filing   All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. 1040nr filing The process for certifying veterans for this credit is the same for all employers. 1040nr filing For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. 1040nr filing Notice 2012-13, 2012-9 I. 1040nr filing R. 1040nr filing B. 1040nr filing 421, also provides additional guidance on submission Form 8850. 1040nr filing   Organizations described in section 501(c) and exempt from taxation under section 501(a) may claim the credit for qualified veterans who begin work on or after Nov. 1040nr filing 22, 2011, and before January 1, 2013. 1040nr filing After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, Form 5884-C. 1040nr filing File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. 1040nr filing It is recommended that qualified tax-exempt employers do not reduce their required deposits in anticipation of any credit as the forms are processed separately. 1040nr filing In addition to Form 5884-C and its instructions, tax-exempt employers should see Notice 2012-13 and the Frequently Asked Questions & Answers for more details for claiming the credit. 1040nr filing Trust fund recovery penalty. 1040nr filing   If any person required to collect, truthfully account for, and pay over any of these taxes willfully fails to satisfy any of these requirements or willfully tries in any way to evade or defeat any of them, that person will be subject to a penalty. 1040nr filing The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. 1040nr filing The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. 1040nr filing Exception. 1040nr filing   The penalty is not imposed on any unpaid volunteer director or member of a board of trustees of an exempt organization if the unpaid volunteer serves solely in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which the penalty is imposed. 1040nr filing   This exception does not apply if it results in no one being liable for the penalty. 1040nr filing FICA and FUTA tax exceptions. 1040nr filing   Payments for services performed by a minister of a church in the exercise of the ministry, or a member of a religious order performing duties required by the order, are generally not subject to FICA or FUTA taxes. 1040nr filing FUTA tax exception. 1040nr filing   Payments for services performed by an employee of a religious, charitable, educational, or other organization described in section 501(c)(3) that are generally subject to FICA taxes if the payments are $100 or more for the year, are not subject to FUTA taxes. 1040nr filing FICA tax exemption election. 1040nr filing   Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. 1040nr filing   To elect the exemption, Form 8274 must be filed before the first date on which a quarterly employment tax return would otherwise be due from the electing organization. 1040nr filing The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. 1040nr filing   The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. 1040nr filing Revoking the election. 1040nr filing   The election can be revoked by the IRS if the organization fails to file Form W-2, Wage and Tax Statement, for 2 years and fails to furnish certain information upon request by the IRS. 1040nr filing Such revocation will apply retroactively to the beginning of the 2-year period. 1040nr filing Definitions. 1040nr filing   For purposes of this election, the term church means a church, a convention or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or by a convention or association of churches. 1040nr filing   The term qualified church-controlled organization means any church-controlled section 501(c)(3) tax-exempt organization, other than an organization that both: Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public at other than a nominal charge that is substantially less than the cost of providing such goods, services, or facilities, and Normally receives more than 25% of its support from the sum of governmental sources and receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities that are not unrelated trades or businesses. 1040nr filing Effect on employees. 1040nr filing   If a church or qualified church-controlled organization has made an election, payment for services performed for that church or organization, other than in an unrelated trade or business, will not be subject to FICA taxes. 1040nr filing However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. 1040nr filing The tax applies to income of $108. 1040nr filing 28 or more for the tax year from that church or organization, and no deductions for trade or business expenses are allowed against this self-employment income. 1040nr filing   Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. 1040nr filing Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. 1040nr filing Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. 1040nr filing S. 1040nr filing Income Tax Return for Certain Political Organizations, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527. 1040nr filing A political organization that has $25,000 ($100,000 for a qualified state or local political organization) or more in gross receipts for the tax year must file Form 990 or Form 990-EZ (and Schedule B of the form), unless excepted. 1040nr filing See Forms 990 and 990-EZ , earlier. 1040nr filing Political organization. 1040nr filing   A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. 1040nr filing Exempt function. 1040nr filing   An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. 1040nr filing It also includes certain office expenses of a holder of public office or an office in a political organization. 1040nr filing Certain political organizations are required to notify the IRS that they are section 527 organizations. 1040nr filing These organizations must use Form 8871. 1040nr filing Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. 1040nr filing For a discussion on these forms, see Reporting Requirements for a Political Organization, later. 1040nr filing Political organization taxable income. 1040nr filing   Political organization taxable income is the excess of: Gross income for the tax year (excluding exempt function income) minus Deductions directly connected with the earning of gross income. 1040nr filing To figure taxable income, allow for a $100 specific deduction, but do not allow for the net operating loss deduction, the dividends-received deduction, and other special deductions for corporations. 1040nr filing Exempt organization not a political organization. 1040nr filing   An organization exempt under section 501(c) that spends any amount for an exempt function must file Form 1120-POL for any year which it has political taxable income. 1040nr filing These organizations must include in gross income the lesser of: The total amount of its exempt function expenditures, or The organization's net investment income. 1040nr filing Separate fund. 1040nr filing   A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. 1040nr filing The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. 1040nr filing Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. 1040nr filing Due date. 1040nr filing   Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. 1040nr filing Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. 1040nr filing If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. 1040nr filing    Form 1120-POL is not required of an exempt organization that makes expenditures for political purposes if its gross income does not exceed its directly connected deductions by more than $100 for the tax year. 1040nr filing Extension of time to file. 1040nr filing    Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. 1040nr filing The extension will be granted if you complete Form 7004 properly, make a proper estimate of the tax (if applicable), file Form 1120-POL by the due date, and pay any tax due. 1040nr filing Failure to file. 1040nr filing   A political organization that fails to file Form 1120-POL is subject to a penalty equal to 5% of the tax due for each month (or partial month) the return is late up to a maximum of 25% of the tax due, unless the organization shows the failure was due to reasonable cause. 1040nr filing For more information about filing Form 1120-POL, refer to the instructions accompanying the form. 1040nr filing Failure to pay on time. 1040nr filing   An organization that does not pay the tax when due generally may have to pay a penalty of 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. 1040nr filing The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. 1040nr filing Reporting Requirements for a Political Organization Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. 1040nr filing The organization is also required to periodically report certain contributions received and expenditures made by the organization. 1040nr filing To notify the IRS of section 527 treatment, an organization must file Form 8871. 1040nr filing To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. 1040nr filing Form 8871 A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. 1040nr filing However, an organization is not required to file Form 8871 if: It reasonably expects its annual gross receipts to always be less than $25,000. 1040nr filing It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. 1040nr filing S. 1040nr filing C. 1040nr filing 431(4)). 1040nr filing It is a state or local candidate committee. 1040nr filing It is a state or local committee of a political party. 1040nr filing It is a section 501(c) organization that has made an “exempt function expenditure. 1040nr filing ” All other political organizations are required to file Form 8871. 1040nr filing An organization must provide on Form 8871: Its name and address (including any business address, if different) and its electronic mailing address; Its purpose; The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its board of directors; The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ. 1040nr filing Employer identification number. 1040nr filing   If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. 1040nr filing IRS. 1040nr filing gov/businesses/small. 1040nr filing By telephone at 1-800-829-4933 from 7:00 a. 1040nr filing m. 1040nr filing to 10:00 p. 1040nr filing m. 1040nr filing in the organization's local time zone. 1040nr filing By mailing or faxing Form SS-4. 1040nr filing   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. 1040nr filing Due dates. 1040nr filing   The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. 1040nr filing If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. 1040nr filing When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. 1040nr filing   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. 1040nr filing How to file. 1040nr filing   An organization must file Form 8871 electronically via the IRS Internet website at www. 1040nr filing IRS. 1040nr filing gov/polorgs (Keyword: political orgs). 1040nr filing Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. 1040nr filing   After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. 1040nr filing Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872. 1040nr filing Penalties Failure to file. 1040nr filing   An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. 1040nr filing Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income. 1040nr filing   Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. 1040nr filing If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed. 1040nr filing    The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. 1040nr filing Fraudulent returns. 1040nr filing   Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both. 1040nr filing Waiver of penalties. 1040nr filing   The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect. 1040nr filing Additional information. 1040nr filing   For more information on Form 8871, see the form and its instructions. 1040nr filing For a discussion on the public inspection requirements for the form, see Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms , later. 1040nr filing Form 8872 Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except: A political organization that is not required to file Form 8871 (discussed earlier). 1040nr filing A political organization that is subject to tax on its income because it did not file or amend Form 8871. 1040nr filing A qualified state or local political organization (QSLPO), discussed below. 1040nr filing All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. 1040nr filing Qualified state or local political organization. 1040nr filing   A state or local political organization may be a QSLPO if: All of its political activities relate solely to state or local public office (or office in a state or local political organization). 1040nr filing It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS. 1040nr filing The state agency and the organization make the reports publicly available. 1040nr filing No federal candidate or office holder: Controls or materially participates in the direction of the organization, Solicits contributions for the organization, or Directs the disbursements of the organization. 1040nr filing Information required on Form 8872. 1040nr filing   If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872. 1040nr filing   If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made. 1040nr filing   For additional information that is required, see Form 8872. 1040nr filing Due dates. 1040nr filing   The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year). 1040nr filing   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. 1040nr filing Election year filing. 1040nr filing    In election years, Form 8872 must be filed on either a quarterly or a monthly basis. 1040nr filing Both a pre-election report and a post-election report are also required to be filed in an election year. 1040nr filing An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). 1040nr filing Nonelection year filing. 1040nr filing    In nonelection years, the form must be filed on a semiannual or monthly basis. 1040nr filing A complete listing of these filing periods are in the Form 8872 Instructions. 1040nr filing A nonelection year is any odd-numbered year. 1040nr filing How to file. 1040nr filing   Form 8872 can be filed either electronically or by mail. 1040nr filing However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. 1040nr filing    To file by mail, send Form 8872 to the:   Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. 1040nr filing   File electronically via the IRS internet website at www. 1040nr filing IRS. 1040nr filing gov/polorgs. 1040nr filing You will need a user ID and password to electronically file Form 8872. 1040nr filing Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail. 1040nr filing   Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: Internal Revenue Service Attn: Request for 8872 Password Mail Stop 6273 Ogden, UT 84201 Lost username and password. 1040nr filing   If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. 1040nr filing You can also fax your request to (801) 620-3249. 1040nr filing It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. 1040nr filing Penalty A penalty will be imposed if the organization is required to file Form 8872 and it: Fails to file the form by the due date, or Files the form but fails to report all of the information required or reports incorrect information. 1040nr filing The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. 1040nr filing Fraudulent returns. 1040nr filing   Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both. 1040nr filing Waiver of penalties. 1040nr filing   The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect. 1040nr filing Donee Information Return Dispositions of donated property. 1040nr filing   If an organization receives charitable deduction property and within three years sells, exchanges, or otherwise disposes of the property, the organization must file Form 8282, Donee Information Return. 1040nr filing However, an organization is not required to file Form 8282 if: The property is valued at $500 or less, or The property is consumed or distributed for charitable purposes. 1040nr filing   Form 8282 must be filed with the IRS within 125 days after the disposition. 1040nr filing Additionally, a copy of Form 8282 must be given to the donor. 1040nr filing If the organization fails to file the required information return, penalties may apply. 1040nr filing Charitable deduction property. 1040nr filing   This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283, Noncash Charitable Contributions. 1040nr filing Publicly traded securities. 1040nr filing   These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. 1040nr filing Appraisal summary. 1040nr filing   If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. 1040nr filing below. 1040nr filing Exceptions. 1040nr filing   A written appraisal is not needed if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane), if your deduction for the vehicle is limited to the gross proceeds from its sale, Intellectual property, Certain securities considered to have market quotations readily available (see Regulations section 1. 1040nr filing 170A-13(c)(7)(xi)(B)), Inventory and other property donated by a corporation that are qualified contributions for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or Any donation of stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. 1040nr filing   The donee organization is not a qualified appraiser for the purpose of valuing the donated property. 1040nr filing For more information, get Publication 561, Determining the Value of Donated Property. 1040nr filing Form 8283. 1040nr filing   For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. 1040nr filing The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. 1040nr filing The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. 1040nr filing The signature does not represent concurrence in the appraised value of the contributed property. 1040nr filing A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. 1040nr filing The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. 1040nr filing A copy of Form 8283 must be given to the donee. 1040nr filing Information Provided to Donors In some situations, a donor must obtain certain information from a donee organization to obtain a deduction for a charitable contribution. 1040nr filing In other situations, the donee organization is required to provide information to the donor. 1040nr filing A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. 1040nr filing (See Disclosure statement. 1040nr filing later. 1040nr filing ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. 1040nr filing See Quid pro quo contribution below for an example. 1040nr filing Failure to make the required disclosure may result in a penalty to the organization. 1040nr filing A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. 1040nr filing In certain circumstances, an organization may be able to meet both of these requirements with the same written document. 1040nr filing Disclosure of Quid Pro Quo Contributions A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution over $75. 1040nr filing Quid pro quo contribution. 1040nr filing   A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. 1040nr filing Your charitable organization must provide the donor a written statement informing the donor of the fair market value of the items or services it provided in exchange for the contribution. 1040nr filing Generally, a written statement is required for each payment, whenever the contribution portion is over $75. 1040nr filing Example. 1040nr filing If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. 1040nr filing In this example, the charitable part of the payment is $60. 1040nr filing Even though the deductible part of the payment is not more than $75, a written statement must be filed because the total payment is more than $75. 1040nr filing If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. 1040nr filing Disclosure statement. 1040nr filing   The required written disclosure statement must: Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity, and Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received. 1040nr filing The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. 1040nr filing If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution. 1040nr filing   No disclosure statement is required if any of the following are true. 1040nr filing The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. 1040nr filing B. 1040nr filing 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. 1040nr filing B. 1040nr filing 507 (as adjusted for inflation), Revenue Procedure 92-49. 1040nr filing There is no donative element involved in a particular transaction with a charity (for example, there is generally no donative element involved in a visitor's purchase from a museum gift shop). 1040nr filing There is only an intangible religious benefit provided to the donor. 1040nr filing The intangible religious benefit must be provided to the donor by an organization organized exclusively for religious purposes, and must be of a type that generally is not sold in a commercial transaction outside the donative context. 1040nr filing For example, a donor who, for a payment, is granted admission to a religious ceremony for which there is no admission charge is provided an intangible religious benefit. 1040nr filing A donor is not provided intangible religious benefits for payments made for tuition for education leading to a recognized degree, travel services, or consumer goods. 1040nr filing The donor makes a payment of $75 or less per year and receives only annual membership benefits that consist of: Any rights or privileges (other than the right to purchase tickets for college athletic events) that the taxpayer can exercise often during the membership period, such as free or discounted admissions or parking or preferred access to goods or services, or Admission to events that are open only to members and the cost per person of which is within the limits for low-cost articles described in Revenue Procedure 90-12 (as adjusted for inflation), Revenue Procedure 90-12. 1040nr filing Good faith estimate of fair market value (FMV). 1040nr filing   An organization can use any reasonable method to estimate the FMV of goods or services it provided to a donor, as long as it applies the method in good faith. 1040nr filing   The organization can estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. 1040nr filing Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. 1040nr filing Example 1. 1040nr filing A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. 1040nr filing The tennis professional provides 1-hour lessons on a commercial basis for $100. 1040nr filing A good faith estimate of the lesson's FMV is $100. 1040nr filing Example 2. 1040nr filing For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. 1040nr filing A good faith estimate of the FMV of the right to hold the event in the museum can be made by using the cost of renting a hotel ballroom with a capacity, amenities, and atmosphere comparable to the museum room, even though the hotel ballroom lacks the unique art displayed in the museum room. 1040nr filing If the hotel ballroom rents for $2,500, a good faith estimate of the FMV of the right to hold the event in the museum is $2,500. 1040nr filing Example 3. 1040nr filing For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. 1040nr filing The artist does not provide tours on a commercial basis. 1040nr filing Tours of the museum normally are free to the public. 1040nr filing A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. 1040nr filing Penalty for failure to disclose. 1040nr filing   A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. 1040nr filing The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. 1040nr filing The charity can avoid the penalty if it can show that the failure was due to reasonable cause. 1040nr filing Acknowledgment of Charitable Contributions of $250 or More A donor can deduct a charitable contribution of $250 or more only if the donor has a written acknowledgment from the charitable organization. 1040nr filing The donor must get the acknowledgment by the earlier of: The date the donor files the original return for the year the contribution is made, or The due date, including extensions, for filing the return. 1040nr filing The donor is responsible for requesting and obtaining the written acknowledgment from the donee. 1040nr filing A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor's instructions or otherwise) distributes the amount received to one or more charities. 1040nr filing Quid pro quo contribution. 1040nr filing   If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the acknowledgment must include a good faith estimate of the value of the goods or services. 1040nr filing See Disclosure of Quid Pro Quo Contributions earlier. 1040nr filing Form of acknowledgment. 1040nr filing   Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. 1040nr filing For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. 1040nr filing Cash contributions. 1040nr filing   To deduct a contribution of cash, a check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. 1040nr filing In the case of a lump-sum contribution (rather than a contribution by payroll deduction) made through the Combined Federal Campaign or a similar program such as a United Way Campaign, the written communication must include the name of the donee organization that is the ultimate recipient of the charitable contribution. 1040nr filing Contributions by payroll deduction. 1040nr filing   An organization may substantiate an employee's contribution by deduction from its payroll by: A pay stub, Form W-2, or other document showing a contribution to a donee organization, together with A pledge card or other document from the donee organization that shows its name. 1040nr filing   For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. 1040nr filing The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. 1040nr filing Acknowledgment of Vehicle Contribution If an exempt organization receives a contribution of a qualified vehicle with a claimed value of more than $500, the donee organization is required to provide a contemporaneous written acknowledgment to the donor. 1040nr filing The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. 1040nr filing See section 3. 1040nr filing 03 of Notice 2005-44 for guidance on the information that must be included in a contemporaneous written acknowledgment and the deadline for furnishing the acknowledgment to the donor. 1040nr filing Any donee organization that provides a contemporaneous written acknowledgment to a donor is required to report to the IRS the information contained in the acknowledgment. 1040nr filing The report is due by February 28 (March 31 if filing electronically) of the year following the year in which the donee organization provides the acknowledgment to the donor. 1040nr filing The organization must file the report on Copy A of Form 1098-C. 1040nr filing An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. 1040nr filing S. 1040nr filing Information Returns. 1040nr filing See the Instructions for Form 1096 for the correct filing location. 1040nr filing An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. 1040nr filing Specifications for filing Form 1098-C electronically or magnetically can be found in Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically at www. 1040nr filing IRS. 1040nr filing gov/pub/irs-pdf/p1220. 1040nr filing pdf. 1040nr filing Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. 1040nr filing However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. 1040nr filing See the Instructions for Form 1098-C. 1040nr filing Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. 1040nr filing The contents of the acknowledgment depend upon whether the organization: Sells a qualified vehicle without any significant intervening use or material improvement, Intends to make a significant intervening use of or material improvement to a qualified vehicle prior to sale, or Sells a qualified vehicle to a needy individual at a price significantly below fair market value, or a gratuitous transfer to a needy individual in direct furtherance of a charitable purpose of the organization of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. 1040nr filing For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. 1040nr filing R. 1040nr filing B. 1040nr filing 1287, at www. 1040nr filing irs. 1040nr filing gov/irb/2005-25_IRB/2005-25_IRB/ar09. 1040nr filing html. 1040nr filing Material improvements or significant intervening use. 1040nr filing   To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's regularly conducted activities, and the use must be significant, not incidental. 1040nr filing Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. 1040nr filing For this purpose, use includes providing transportation on a regular basis for a significant period of time or significant use directly related to training in vehicle repair. 1040nr filing Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. 1040nr filing Examples of significant use include: Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. 1040nr filing Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. 1040nr filing   Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. 1040nr filing To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. 1040nr filing Material improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning or repair of upholstery, and installation of theft deterrent devices. 1040nr filing Penalties. 1040nr filing   If your charitable organization receives contributions of used motor vehicles, boats, and airplanes valued over $500 it may be subject to a penalty if it knowingly: Fails to furnish an acknowledgement in a timely manner, showing the required information, or Furnishes a false or fraudulent acknowledgement of the contribution. 1040nr filing    Other penalties may apply. 1040nr filing See Part O in the 2012 General Instructions for Certain Information Returns. 1040nr filing   An acknowledgment containing a certification will be presumed to be false or fraudulent if the qualified vehicle is sold to a buyer other than a needy individual without a significant intervening use or material improvement within 6 months of the date of the contribution. 1040nr filing   If a charity sells a donated vehicle at auction, the IRS will not accept as substantiation an acknowledgment from the charity stating that the vehicle is to be transferred to a needy individual for significantly below fair market value. 1040nr filing Vehicles sold at auction are not sold at prices significantly below fair market value, and the IRS will not treat vehicles sold at auction as qualifying for this exception. 1040nr filing   The penalty for a false or fraudulent acknowledgment where the donee certifies that the vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use or the donee certifies that the vehicle is to be transferred to a needy individual for significantly below fair market value in furtherance of the donee's charitable purpose is the larger of $5,000 or the claimed value of the vehicle multiplied by 39. 1040nr filing 6%. 1040nr filing   The penalty for an acknowledgment relating to a qualified vehicle being sold in an arm's length transaction to an unrelated party is the larger of the gross proceeds from the sale or the sales price stated in the acknowledgment multiplied by 39. 1040nr filing 6%. 1040nr filing Qualified Intellectual Property A taxpayer who contributes qualified intellectual property to a charity may be entitled to a charitable deduction, in addition to any initial deduction allowed in the year of contribution. 1040nr filing The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. 1040nr filing To qualify for the additional charitable deduction, the donor must provide notice to the donee at the time of the contribution that the donor intends to treat the contribution as qualified intellectual property contribution for purposes of sections 170(m) and 6050L. 1040nr filing Every donee organization described in section 170(c) (except a private foundation as defined in section 509(a) that is not described in section 170(b)(1)(F)) that receives or accrues net income from a charitable gift of qualified intellectual property must file Form 8899. 1040nr filing Form 8899. 1040nr filing   Form 8899, Notice of Income From Donated Intellectual Property, is used by a donee to report net income from qualified intellectual property to the donor of the property and to the IRS and is due by the last day of the first full month following the close of the donee’s tax year. 1040nr filing This form must be filed for each tax year of the donee in which the donated property produces net income, but only if all or part of that tax year occurs during the 10-year period beginning on the date of the contribution and that tax year does not begin after the expiration of the legal life of the donated property. 1040nr filing Qualified donee income. 1040nr filing   Qualified donee income is any net income received by or accrued to the donee that is properly allocable to the qualified intellectual property for the tax year of the donee which ends within or with the tax year of the donor. 1040nr filing Income is not treated as allocated to qualified intellectual property if it is received or accrued after the earlier of the expiration of the legal life of the qualified intellectual property, or the 10-year period beginning with the date of