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E-file state taxes free Publication 969 - Main Content Table of Contents Health Savings Accounts (HSAs)Qualifying for an HSA Contributions to an HSA Distributions From an HSA Balance in an HSA Death of HSA Holder Filing Form 8889 Employer Participation Medical Savings Accounts (MSAs)Archer MSAs Contributions to an MSA Distributions From an MSA Balance in an Archer MSA Death of the Archer MSA Holder Filing Form 8853 Employer Participation Medicare Advantage MSAs Flexible Spending Arrangements (FSAs)Qualifying for an FSA Contributions to an FSA Distributions From an FSA Balance in an FSA Employer Participation Health Reimbursement Arrangements (HRAs)Qualifying for an HRA Contributions to an HRA Distributions From an HRA Balance in an HRA Employer Participation How To Get Tax HelpLow Income Taxpayer Clinics Health Savings Accounts (HSAs) A health savings account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. E-file state taxes free You must be an eligible individual to qualify for an HSA. E-file state taxes free No permission or authorization from the IRS is necessary to establish an HSA. E-file state taxes free You set up an HSA with a trustee. E-file state taxes free A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. E-file state taxes free The HSA can be established through a trustee that is different from your health plan provider. E-file state taxes free Your employer may already have some information on HSA trustees in your area. E-file state taxes free If you have an Archer MSA, you can generally roll it over into an HSA tax free. E-file state taxes free See Rollovers, later. E-file state taxes free What are the benefits of an HSA?   You may enjoy several benefits from having an HSA. E-file state taxes free You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040. E-file state taxes free Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income. E-file state taxes free The contributions remain in your account until you use them. E-file state taxes free The interest or other earnings on the assets in the account are tax free. E-file state taxes free Distributions may be tax free if you pay qualified medical expenses. E-file state taxes free See Qualified medical expenses , later. E-file state taxes free An HSA is “portable. E-file state taxes free ” It stays with you if you change employers or leave the work force. E-file state taxes free Qualifying for an HSA To be an eligible individual and qualify for an HSA, you must meet the following requirements. E-file state taxes free You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month. E-file state taxes free You have no other health coverage except what is permitted under Other health coverage , later. E-file state taxes free You are not enrolled in Medicare. E-file state taxes free You cannot be claimed as a dependent on someone else's 2013 tax return. E-file state taxes free Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers). E-file state taxes free If you meet these requirements, you are an eligible individual even if your spouse has non-HDHP family coverage, provided your spouse's coverage does not cover you. E-file state taxes free If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an HSA contribution. E-file state taxes free This is true even if the other person does not actually claim your exemption. E-file state taxes free Each spouse who is an eligible individual who wants an HSA must open a separate HSA. E-file state taxes free You cannot have a joint HSA. E-file state taxes free High deductible health plan (HDHP). E-file state taxes free   An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. E-file state taxes free Out-of-pocket expenses include copayments and other amounts, but do not include premiums. E-file state taxes free   An HDHP may provide preventive care benefits without a deductible or with a deductible less than the minimum annual deductible. E-file state taxes free Preventive care includes, but is not limited to, the following. E-file state taxes free Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals. E-file state taxes free Routine prenatal and well-child care. E-file state taxes free Child and adult immunizations. E-file state taxes free Tobacco cessation programs. E-file state taxes free Obesity weight-loss programs. E-file state taxes free Screening services. E-file state taxes free This includes screening services for the following: Cancer. E-file state taxes free Heart and vascular diseases. E-file state taxes free Infectious diseases. E-file state taxes free Mental health conditions. E-file state taxes free Substance abuse. E-file state taxes free Metabolic, nutritional, and endocrine conditions. E-file state taxes free Musculoskeletal disorders. E-file state taxes free Obstetric and gynecological conditions. E-file state taxes free Pediatric conditions. E-file state taxes free Vision and hearing disorders. E-file state taxes free For more information on screening services, see Notice 2004-23, 2004-15 I. E-file state taxes free R. E-file state taxes free B. E-file state taxes free 725 available at www. E-file state taxes free irs. E-file state taxes free gov/irb/2004-15_IRB/ar10. E-file state taxes free html. E-file state taxes free     The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2013. E-file state taxes free      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,250 $12,500 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. E-file state taxes free Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. E-file state taxes free    The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2014. E-file state taxes free      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,350 $12,700 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. E-file state taxes free Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. E-file state taxes free   Self-only HDHP coverage is an HDHP covering only an eligible individual. E-file state taxes free Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual). E-file state taxes free Example. E-file state taxes free An eligible individual and his dependent child are covered under an “employee plus one” HDHP offered by the individual's employer. E-file state taxes free This is family HDHP coverage. E-file state taxes free Family plans that do not meet the high deductible rules. E-file state taxes free   There are some family plans that have deductibles for both the family as a whole and for individual family members. E-file state taxes free Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. E-file state taxes free If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. E-file state taxes free Example. E-file state taxes free You have family health insurance coverage in 2013. E-file state taxes free The annual deductible for the family plan is $3,500. E-file state taxes free This plan also has an individual deductible of $1,500 for each family member. E-file state taxes free The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($2,500) for family coverage. E-file state taxes free Other health coverage. E-file state taxes free   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. E-file state taxes free However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. E-file state taxes free    You can have additional insurance that provides benefits only for the following items. E-file state taxes free Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property. E-file state taxes free A specific disease or illness. E-file state taxes free A fixed amount per day (or other period) of hospitalization. E-file state taxes free   You can also have coverage (whether provided through insurance or otherwise) for the following items. E-file state taxes free Accidents. E-file state taxes free Disability. E-file state taxes free Dental care. E-file state taxes free Vision care. E-file state taxes free Long-term care. E-file state taxes free    Plans in which substantially all of the coverage is through the items listed earlier are not HDHPs. E-file state taxes free For example, if your plan provides coverage substantially all of which is for a specific disease or illness, the plan is not an HDHP for purposes of establishing an HSA. E-file state taxes free Prescription drug plans. E-file state taxes free   You can have a prescription drug plan, either as part of your HDHP or a separate plan (or rider), and qualify as an eligible individual if the plan does not provide benefits until the minimum annual deductible of the HDHP has been met. E-file state taxes free If you can receive benefits before that deductible is met, you are not an eligible individual. E-file state taxes free Other employee health plans. E-file state taxes free   An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses generally cannot make contributions to an HSA. E-file state taxes free Health FSAs and HRAs are discussed later. E-file state taxes free   However, an employee can make contributions to an HSA while covered under an HDHP and one or more of the following arrangements. E-file state taxes free Limited-purpose health FSA or HRA. E-file state taxes free These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. E-file state taxes free Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible. E-file state taxes free Suspended HRA. E-file state taxes free Before the beginning of an HRA coverage period, you can elect to suspend the HRA. E-file state taxes free The HRA does not pay or reimburse, at any time, the medical expenses incurred during the suspension period except preventive care and items listed under Other health coverage. E-file state taxes free When the suspension period ends, you are no longer eligible to make contributions to an HSA. E-file state taxes free Post-deductible health FSA or HRA. E-file state taxes free These arrangements do not pay or reimburse any medical expenses incurred before the minimum annual deductible amount is met. E-file state taxes free The deductible for these arrangements does not have to be the same as the deductible for the HDHP, but benefits may not be provided before the minimum annual deductible amount is met. E-file state taxes free Retirement HRA. E-file state taxes free This arrangement pays or reimburses only those medical expenses incurred after retirement. E-file state taxes free After retirement you are no longer eligible to make contributions to an HSA. E-file state taxes free Health FSA – grace period. E-file state taxes free   Coverage during a grace period by a general purpose health FSA is allowed if the balance in the health FSA at the end of its prior year plan is zero. E-file state taxes free See Flexible Spending Arrangements (FSAs) , later. E-file state taxes free Contributions to an HSA Any eligible individual can contribute to an HSA. E-file state taxes free For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. E-file state taxes free For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. E-file state taxes free Family members or any other person may also make contributions on behalf of an eligible individual. E-file state taxes free Contributions to an HSA must be made in cash. E-file state taxes free Contributions of stock or property are not allowed. E-file state taxes free Limit on Contributions The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. E-file state taxes free For 2013, if you have self-only HDHP coverage, you can contribute up to $3,250. E-file state taxes free If you have family HDHP coverage, you can contribute up to $6,450. E-file state taxes free For 2014, if you have self-only HDHP coverage, you can contribute up to $3,300. E-file state taxes free If you have family HDHP coverage you can contribute up to $6,550. E-file state taxes free If you were, or were considered (under the last-month rule, discussed later), an eligible individual for the entire year and did not change your type of coverage, you can contribute the full amount based on your type of coverage. E-file state taxes free However, if you were not an eligible individual for the entire year or changed your coverage during the year, your contribution limit is the greater of: The limitation shown on the Line 3 Limitation Chart and Worksheetin the Instructions for Form 8889, Health Savings Accounts (HSAs), or The maximum annual HSA contribution based on your HDHP coverage (self-only or family) on the first day of the last month of your tax year. E-file state taxes free If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2013 is $6,450 even if you changed coverage during the year. E-file state taxes free Last-month rule. E-file state taxes free   Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. E-file state taxes free You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month. E-file state taxes free Testing period. E-file state taxes free   If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. E-file state taxes free For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. E-file state taxes free For example, December 1, 2013, through December 31, 2014. E-file state taxes free   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule. E-file state taxes free You include this amount in your income in the year in which you fail to be an eligible individual. E-file state taxes free This amount is also subject to a 10% additional tax. E-file state taxes free The income and additional tax are shown on Form 8889, Part III. E-file state taxes free Example 1. E-file state taxes free Chris, age 53, becomes an eligible individual on December 1, 2013. E-file state taxes free He has family HDHP coverage on that date. E-file state taxes free Under the last-month rule, he contributes $6,450 to his HSA. E-file state taxes free Chris fails to be an eligible individual in June 2014. E-file state taxes free Because Chris did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), he must include in his 2014 income the contributions made in 2013 that would not have been made except for the last-month rule. E-file state taxes free Chris uses the worksheet in the Form 8889 instructions to determine this amount. E-file state taxes free January -0- February -0- March -0- April -0- May -0- June -0- July -0- August -0- September -0- October -0- November -0- December $6,450. E-file state taxes free 00 Total for all months $6,450. E-file state taxes free 00 Limitation. E-file state taxes free Divide the total by 12 $537. E-file state taxes free 50 Chris would include $5,912. E-file state taxes free 50 ($6,450. E-file state taxes free 00 – $537. E-file state taxes free 50) in his gross income on his 2014 tax return. E-file state taxes free Also, a 10% additional tax applies to this amount. E-file state taxes free Example 2. E-file state taxes free Erika, age 39, has self-only HDHP coverage on January 1, 2013. E-file state taxes free Erika changes to family HDHP coverage on November 1, 2013. E-file state taxes free Because Erika has family HDHP coverage on December 1, 2013, she contributes $6,450 for 2013. E-file state taxes free Erika fails to be an eligible individual in March 2014. E-file state taxes free Because she did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), she must include in income the contribution made that would not have been made except for the last-month rule. E-file state taxes free Erika uses the worksheet in the Form 8889 instructions to determine this amount. E-file state taxes free January $3,250. E-file state taxes free 00 February $3,250. E-file state taxes free 00 March $3,250. E-file state taxes free 00 April $3,250. E-file state taxes free 00 May $3,250. E-file state taxes free 00 June $3,250. E-file state taxes free 00 July $3,250. E-file state taxes free 00 August $3,250. E-file state taxes free 00 September $3,250. E-file state taxes free 00 October $3,250. E-file state taxes free 00 November $6,450. E-file state taxes free 00 December $6,450. E-file state taxes free 00 Total for all months $45,400. E-file state taxes free 00 Limitation. E-file state taxes free Divide the total by 12 $3,783. E-file state taxes free 34 Erika would include $2,666. E-file state taxes free 67 ($6,450 – $3,783. E-file state taxes free 34) in her gross income on her 2014 tax return. E-file state taxes free Also, a 10% additional tax applies to this amount. E-file state taxes free Additional contribution. E-file state taxes free   If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. E-file state taxes free For example, if you have self-only coverage, you can contribute up to $4,250 (the contribution limit for self-only coverage ($3,250) plus the additional contribution of $1,000). E-file state taxes free However, see Enrolled in Medicare , later. E-file state taxes free If you have more than one HSA in 2013, your total contributions to all the HSAs cannot be more than the limits discussed earlier. E-file state taxes free Reduction of contribution limit. E-file state taxes free   You must reduce the amount that can be contributed (including any additional contribution) to your HSA by the amount of any contribution made to your Archer MSA (including employer contributions) for the year. E-file state taxes free A special rule applies to married people, discussed next, if each spouse has family coverage under an HDHP. E-file state taxes free Rules for married people. E-file state taxes free   If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. E-file state taxes free If each spouse has family coverage under a separate plan, the contribution limit for 2013 is $6,450. E-file state taxes free You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. E-file state taxes free After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. E-file state taxes free The rules for married people apply only if both spouses are eligible individuals. E-file state taxes free If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. E-file state taxes free If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,450. E-file state taxes free Each spouse must make the additional contribution to his or her own HSA. E-file state taxes free Example. E-file state taxes free For 2013, Mr. E-file state taxes free Auburn and his wife are both eligible individuals. E-file state taxes free They each have family coverage under separate HDHPs. E-file state taxes free Mr. E-file state taxes free Auburn is 58 years old and Mrs. E-file state taxes free Auburn is 53. E-file state taxes free Mr. E-file state taxes free and Mrs. E-file state taxes free Auburn can split the family contribution limit ($6,450) equally or they can agree on a different division. E-file state taxes free If they split it equally, Mr. E-file state taxes free Auburn can contribute $4,225 to an HSA (one-half the maximum contribution for family coverage ($3,225) + $1,000 additional contribution) and Mrs. E-file state taxes free Auburn can contribute $3,225 to an HSA. E-file state taxes free Employer contributions. E-file state taxes free   You must reduce the amount you, or any other person, can contribute to your HSA by the amount of any contributions made by your employer that are excludable from your income. E-file state taxes free This includes amounts contributed to your account by your employer through a cafeteria plan. E-file state taxes free Enrolled in Medicare. E-file state taxes free   Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. E-file state taxes free Example. E-file state taxes free You turned age 65 in July 2013 and enrolled in Medicare. E-file state taxes free You had an HDHP with self-only coverage and are eligible for an additional contribution of $1,000. E-file state taxes free Your contribution limit is $2,125 ($4,250 × 6 ÷ 12). E-file state taxes free Qualified HSA funding distribution. E-file state taxes free   A qualified HSA funding distribution may be made from your traditional IRA or Roth IRA to your HSA. E-file state taxes free This distribution cannot be made from an ongoing SEP IRA or SIMPLE IRA. E-file state taxes free For this purpose, a SEP IRA or SIMPLE IRA is ongoing if an employer contribution is made for the plan year ending with or within your tax year in which the distribution would be made. E-file state taxes free   The maximum qualified HSA funding distribution depends on the HDHP coverage (self-only or family) you have on the first day of the month in which the contribution is made and your age as of the end of the tax year. E-file state taxes free The distribution must be made directly by the trustee of the IRA to the trustee of the HSA. E-file state taxes free The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. E-file state taxes free The qualified HSA funding distribution is shown on Form 8889 for the year in which the distribution is made. E-file state taxes free   You can make only one qualified HSA funding distribution during your lifetime. E-file state taxes free However, if you make a distribution during a month when you have self-only HDHP coverage, you can make another qualified HSA funding distribution in a later month in that tax year if you change to family HDHP coverage. E-file state taxes free The total qualified HSA funding distribution cannot be more than the contribution limit for family HDHP coverage plus any additional contribution to which you are entitled. E-file state taxes free Example. E-file state taxes free In 2013, you are an eligible individual, age 57, with self-only HDHP coverage. E-file state taxes free You can make a qualified HSA funding distribution of $4,250 ($3,250 plus $1,000 additional contribution). E-file state taxes free Funding distribution – testing period. E-file state taxes free   You must remain an eligible individual during the testing period. E-file state taxes free For a qualified HSA funding distribution, the testing period begins with the month in which the qualified HSA funding distribution is contributed and ends on the last day of the 12th month following that month. E-file state taxes free For example, if a qualified HSA funding distribution is contributed to your HSA on August 10, 2013, your testing period begins in August 2013, and ends on August 31, 2014. E-file state taxes free   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the qualified HSA funding distribution. E-file state taxes free You include this amount in income in the year in which you fail to be an eligible individual. E-file state taxes free This amount is also subject to a 10% additional tax. E-file state taxes free The income and the additional tax are shown on Form 8889, Part III. E-file state taxes free   Each qualified HSA funding distribution allowed has its own testing period. E-file state taxes free For example, you are an eligible individual, age 45, with self-only HDHP coverage. E-file state taxes free On June 18, 2013, you make a qualified HSA funding distribution of $3,250. E-file state taxes free On July 27, 2013, you enroll in family HDHP coverage and on August 17, 2013, you make a qualified HSA funding distribution of $3,200. E-file state taxes free Your testing period for the first distribution begins in June 2013 and ends on June 30, 2014. E-file state taxes free Your testing period for the second distribution begins in August 2013 and ends on August 31, 2014. E-file state taxes free   The testing period rule that applies under the last-month rule (discussed earlier) does not apply to amounts contributed to an HSA through a qualified HSA funding distribution. E-file state taxes free If you remain an eligible individual during the entire funding distribution testing period, then no amount of that distribution is included in income and will not be subject to the additional tax for failing to meet the last-month rule testing period. E-file state taxes free Rollovers A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit. E-file state taxes free Archer MSAs and other HSAs. E-file state taxes free   You can roll over amounts from Archer MSAs and other HSAs into an HSA. E-file state taxes free You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. E-file state taxes free Rollover contributions do not need to be in cash. E-file state taxes free Rollovers are not subject to the annual contribution limits. E-file state taxes free   You must roll over the amount within 60 days after the date of receipt. E-file state taxes free You can make only one rollover contribution to an HSA during a 1-year period. E-file state taxes free Note. E-file state taxes free If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer is not considered a rollover. E-file state taxes free There is no limit on the number of these transfers. E-file state taxes free Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889. E-file state taxes free When To Contribute You can make contributions to your HSA for 2013 until April 15, 2014. E-file state taxes free If you fail to be an eligible individual during 2013, you can still make contributions, up until April 15, 2014, for the months you were an eligible individual. E-file state taxes free Your employer can make contributions to your HSA between January 1, 2014, and April 15, 2014, that are allocated to 2013. E-file state taxes free Your employer must notify you and the trustee of your HSA that the contribution is for 2013. E-file state taxes free The contribution will be reported on your 2014 Form W-2. E-file state taxes free Reporting Contributions on Your Return Contributions made by your employer are not included in your income. E-file state taxes free Contributions to an employee's account by an employer using the amount of an employee's salary reduction through a cafeteria plan are treated as employer contributions. E-file state taxes free Generally, you can claim contributions you made and contributions made by any other person, other than your employer, on your behalf, as an adjustment to income. E-file state taxes free Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. E-file state taxes free The contributions are treated as a distribution of money and are not included in the partner's gross income. E-file state taxes free Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are deductible by the partnership and includible in the partner's gross income. E-file state taxes free In both situations, the partner can deduct the contribution made to the partner's HSA. E-file state taxes free Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are deductible by the S corporation and includible in the shareholder-employee's gross income. E-file state taxes free The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. E-file state taxes free Form 8889. E-file state taxes free   Report all contributions to your HSA on Form 8889 and file it with your Form 1040 or Form 1040NR. E-file state taxes free You should include all contributions made for 2013, including those made by April 15, 2014, that are designated for 2013. E-file state taxes free Contributions made by your employer and qualified HSA funding distributions are also shown on the form. E-file state taxes free   You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount contributed to your HSA during the year. E-file state taxes free Your employer's contributions also will be shown in box 12 of Form W-2, Wage and Tax Statement, with code W. E-file state taxes free Follow the instructions for Form 8889. E-file state taxes free Report your HSA deduction on Form 1040 or Form 1040NR. E-file state taxes free Excess contributions. E-file state taxes free   You will have excess contributions if the contributions to your HSA for the year are greater than the limits discussed earlier. E-file state taxes free Excess contributions are not deductible. E-file state taxes free Excess contributions made by your employer are included in your gross income. E-file state taxes free If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. E-file state taxes free   Generally, you must pay a 6% excise tax on excess contributions. E-file state taxes free See Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. E-file state taxes free The excise tax applies to each tax year the excess contribution remains in the account. E-file state taxes free   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. E-file state taxes free You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made. E-file state taxes free You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. E-file state taxes free If you fail to remain an eligible individual during any of the testing periods, discussed earlier, the amount you have to include in income is not an excess contribution. E-file state taxes free If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later. E-file state taxes free Deducting an excess contribution in a later year. E-file state taxes free   You may be able to deduct excess contributions for previous years that are still in your HSA. E-file state taxes free The excess contribution you can deduct for the current year is the lesser of the following two amounts. E-file state taxes free Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year. E-file state taxes free The total excess contributions in your HSA at the beginning of the year. E-file state taxes free   Amounts contributed for the year include contributions by you, your employer, and any other person. E-file state taxes free They also include any qualified HSA funding distribution made to your HSA. E-file state taxes free Any excess contribution remaining at the end of a tax year is subject to the excise tax. E-file state taxes free See Form 5329. E-file state taxes free Distributions From an HSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. E-file state taxes free When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your HSA to send you a distribution from your HSA. E-file state taxes free You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. E-file state taxes free If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. E-file state taxes free You do not have to make distributions from your HSA each year. E-file state taxes free If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. E-file state taxes free Generally, a distribution is money you get from your health savings account. E-file state taxes free Your total distributions include amounts paid with a debit card that restricts payments to health care and amounts withdrawn from the HSA by other individuals that you have designated. E-file state taxes free The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. E-file state taxes free Qualified medical expenses. E-file state taxes free   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. E-file state taxes free These are explained in Publication 502, Medical and Dental Expenses. E-file state taxes free   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for HSA purposes. E-file state taxes free A medicine or drug will be a qualified medical expense for HSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. E-file state taxes free   For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. E-file state taxes free State law determines when an HSA is established. E-file state taxes free An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established. E-file state taxes free   If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical expenses. E-file state taxes free   Qualified medical expenses are those incurred by the following persons. E-file state taxes free You and your spouse. E-file state taxes free All dependents you claim on your tax return. E-file state taxes free Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. E-file state taxes free    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. E-file state taxes free You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA. E-file state taxes free Insurance premiums. E-file state taxes free   You cannot treat insurance premiums as qualified medical expenses unless the premiums are for: Long-term care insurance. E-file state taxes free Health care continuation coverage (such as coverage under COBRA). E-file state taxes free Health care coverage while receiving unemployment compensation under federal or state law. E-file state taxes free Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap). E-file state taxes free   The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. E-file state taxes free See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040). E-file state taxes free   Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. E-file state taxes free For item (4), if you, the account beneficiary, are not 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally are not qualified medical expenses. E-file state taxes free Health coverage tax credit. E-file state taxes free   You cannot claim this credit for premiums that you pay with a tax-free distribution from your HSA. E-file state taxes free See Publication 502 for more information on this credit. E-file state taxes free Deemed distributions from HSAs. E-file state taxes free   The following situations result in deemed taxable distributions from your HSA. E-file state taxes free You engaged in any transaction prohibited by section 4975 with respect to any of your HSAs, at any time in 2013. E-file state taxes free Your account ceases to be an HSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8889. E-file state taxes free You used any portion of any of your HSAs as security for a loan at any time in 2013. E-file state taxes free You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. E-file state taxes free   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the HSA, Lending of money between you and the HSA, Furnishing goods, services, or facilities between you and the HSA, and Transfer to or use by you, or for your benefit, of any assets of the HSA. E-file state taxes free   Any deemed distribution will not be treated as used to pay qualified medical expenses. E-file state taxes free These distributions are included in your income and are subject to the additional 20% tax, discussed later. E-file state taxes free Recordkeeping. E-file state taxes free You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. E-file state taxes free Do not send these records with your tax return. E-file state taxes free Keep them with your tax records. E-file state taxes free Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). E-file state taxes free If you use a distribution from your HSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8889. E-file state taxes free However, the distribution of an excess contribution taken out after the due date, including extensions, of your return is subject to tax even if used for qualified medical expenses. E-file state taxes free Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. E-file state taxes free If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. E-file state taxes free Report the amount on Form 8889 and file it with your Form 1040 or Form 1040NR. E-file state taxes free You may have to pay an additional 20% tax on your taxable distribution. E-file state taxes free HSA administration and maintenance fees withdrawn by the trustee are not reported as distributions from the HSA. E-file state taxes free Additional tax. E-file state taxes free   There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. E-file state taxes free Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR. E-file state taxes free Exceptions. E-file state taxes free   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. E-file state taxes free Balance in an HSA An HSA is generally exempt from tax. E-file state taxes free You are permitted to take a distribution from your HSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. E-file state taxes free Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). E-file state taxes free Earnings on amounts in an HSA are not included in your income while held in the HSA. E-file state taxes free Death of HSA Holder You should choose a beneficiary when you set up your HSA. E-file state taxes free What happens to that HSA when you die depends on whom you designate as the beneficiary. E-file state taxes free Spouse is the designated beneficiary. E-file state taxes free   If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse's HSA after your death. E-file state taxes free Spouse is not the designated beneficiary. E-file state taxes free   If your spouse is not the designated beneficiary of your HSA: The account stops being an HSA, and The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die. E-file state taxes free If your estate is the beneficiary, the value is included on your final income tax return. E-file state taxes free The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. E-file state taxes free Filing Form 8889 You must file Form 8889 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your HSA during the year. E-file state taxes free You must file the form even if only your employer or your spouse's employer made contributions to the HSA. E-file state taxes free If, during the tax year, you are the beneficiary of two or more HSAs or you are a beneficiary of an HSA and you have your own HSA, you must complete a separate Form 8889 for each HSA. E-file state taxes free Enter “statement” at the top of each Form 8889 and complete the form as instructed. E-file state taxes free Next, complete a controlling Form 8889 combining the amounts shown on each of the statement Forms 8889. E-file state taxes free Attach the statements to your tax return after the controlling Form 8889. E-file state taxes free Employer Participation This section contains the rules that employers must follow if they decide to make HSAs available to their employees. E-file state taxes free Unlike the previous discussions, “you” refers to the employer and not to the employee. E-file state taxes free Health plan. E-file state taxes free   If you want your employees to be able to have an HSA, they must have an HDHP. E-file state taxes free You can provide no additional coverage other than those exceptions listed previously under Other health coverage . E-file state taxes free Contributions. E-file state taxes free   You can make contributions to your employees' HSAs. E-file state taxes free You deduct the contributions on your business income tax return for the year in which you make the contributions. E-file state taxes free If the contribution is allocated to the prior year, you still deduct it in the year in which you made the contribution. E-file state taxes free   For more information on employer contributions, see Notice 2008-59, 2008-29 I. E-file state taxes free R. E-file state taxes free B. E-file state taxes free 123, questions 23 through 27, available at www. E-file state taxes free irs. E-file state taxes free gov/irb/2008-29_IRB/ar11. E-file state taxes free html. E-file state taxes free Comparable contributions. E-file state taxes free   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' HSAs. E-file state taxes free Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. E-file state taxes free The comparability rules do not apply to contributions made through a cafeteria plan. E-file state taxes free Comparable participating employees. E-file state taxes free   Comparable participating employees: Are covered by your HDHP and are eligible to establish an HSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (part-time, full-time, or former employees). E-file state taxes free   To meet the comparability requirements for eligible employees who have not established an HSA by December 31 or have not notified you that they have an HSA, you must meet a notice requirement and a contribution requirement. E-file state taxes free   You will meet the notice requirement if by January 15 of the following calendar year you provide a written notice to all such employees. E-file state taxes free The notice must state that each eligible employee who, by the last day of February, establishes an HSA and notifies you that they have established an HSA will receive a comparable contribution to the HSA for the prior year. E-file state taxes free For a sample of the notice, see Regulation 54. E-file state taxes free 4980G-4 A-14(c). E-file state taxes free You will meet the contribution requirement for these employees if by April 15, 2014, you contribute comparable amounts plus reasonable interest to the employee's HSA for the prior year. E-file state taxes free Note. E-file state taxes free For purposes of making contributions to HSAs of non-highly compensated employees, highly compensated employees shall not be treated as comparable participating employees. E-file state taxes free Excise tax. E-file state taxes free   If you made contributions to your employees' HSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. E-file state taxes free Employment taxes. E-file state taxes free   Amounts you contribute to your employees' HSAs are generally not subject to employment taxes. E-file state taxes free You must report the contributions in box 12 of the Form W-2 you file for each employee. E-file state taxes free This includes the amounts the employee elected to contribute through a cafeteria plan. E-file state taxes free Enter code “W” in box 12. E-file state taxes free Medical Savings Accounts (MSAs) Archer MSAs were created to help self-employed individuals and employees of certain small employers meet the medical care costs of the account holder, the account holder's spouse, or the account holder's dependent(s). E-file state taxes free After December 31, 2007, you cannot be treated as an eligible individual for Archer MSA purposes unless: You were an active participant for any tax year ending before January 1, 2008, or You became an active participant for a tax year ending after December 31, 2007, by reason of coverage under a high deductible health plan (HDHP) of an Archer MSA participating employer. E-file state taxes free A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder who is eligible for Medicare. E-file state taxes free Archer MSAs An Archer MSA is a tax-exempt trust or custodial account that you set up with a U. E-file state taxes free S. E-file state taxes free financial institution (such as a bank or an insurance company) in which you can save money exclusively for future medical expenses. E-file state taxes free What are the benefits of an Archer MSA?   You may enjoy several benefits from having an Archer MSA. E-file state taxes free You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040 or Form 1040NR. E-file state taxes free The interest or other earnings on the assets in your Archer MSA are tax free. E-file state taxes free Distributions may be tax free if you pay qualified medical expenses. E-file state taxes free See Qualified medical expenses , later. E-file state taxes free The contributions remain in your Archer MSA from year to year until you use them. E-file state taxes free An Archer MSA is “portable” so it stays with you if you change employers or leave the work force. E-file state taxes free Qualifying for an Archer MSA To qualify for an Archer MSA, you must be either of the following. E-file state taxes free An employee (or the spouse of an employee) of a small employer (defined later) that maintains a self-only or family HDHP for you (or your spouse). E-file state taxes free A self-employed person (or the spouse of a self-employed person) who maintains a self-only or family HDHP. E-file state taxes free You can have no other health or Medicare coverage except what is permitted under Other health coverage , later. E-file state taxes free You must be an eligible individual on the first day of a given month to get an Archer MSA deduction for that month. E-file state taxes free If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an Archer MSA contribution. E-file state taxes free This is true even if the other person does not actually claim your exemption. E-file state taxes free Small employer. E-file state taxes free   A small employer is generally an employer who had an average of 50 or fewer employees during either of the last 2 calendar years. E-file state taxes free The definition of small employer is modified for new employers and growing employers. E-file state taxes free Growing employer. E-file state taxes free   A small employer may begin HDHPs and Archer MSAs for his or her employees and then grow beyond 50 employees. E-file state taxes free The employer will continue to meet the requirement for small employers if he or she: Had 50 or fewer employees when the Archer MSAs began, Made a contribution that was excludable or deductible as an Archer MSA for the last year he or she had 50 or fewer employees, and Had an average of 200 or fewer employees each year after 1996. E-file state taxes free Changing employers. E-file state taxes free   If you change employers, your Archer MSA moves with you. E-file state taxes free However, you may not make additional contributions unless you are otherwise eligible. E-file state taxes free High deductible health plan (HDHP). E-file state taxes free   To be eligible for an Archer MSA, you must be covered under an HDHP. E-file state taxes free An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the annual out-of-pocket medical expenses that you must pay for covered expenses. E-file state taxes free Limits. E-file state taxes free   The following table shows the limits for annual deductibles and the maximum out-of-pocket expenses for HDHPs for 2013. E-file state taxes free   Self-only coverage Family coverage Minimum annual deductible $2,150 $4,300 Maximum annual deductible $3,200 $6,450 Maximum annual out-of-pocket expenses $4,300 $7,850 Family plans that do not meet the high deductible rules. E-file state taxes free   There are some family plans that have deductibles for both the family as a whole and for individual family members. E-file state taxes free Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. E-file state taxes free If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. E-file state taxes free Example. E-file state taxes free You have family health insurance coverage in 2013. E-file state taxes free The annual deductible for the family plan is $5,500. E-file state taxes free This plan also has an individual deductible of $2,000 for each family member. E-file state taxes free The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($4,300) for family coverage. E-file state taxes free Other health coverage. E-file state taxes free   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. E-file state taxes free However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. E-file state taxes free However, you can have additional insurance that provides benefits only for the following items. E-file state taxes free Liabilities incurred under workers' compensation laws, torts, or ownership or use of property. E-file state taxes free A specific disease or illness. E-file state taxes free A fixed amount per day (or other period) of hospitalization. E-file state taxes free You can also have coverage (whether provided through insurance or otherwise) for the following items. E-file state taxes free Accidents. E-file state taxes free Disability. E-file state taxes free Dental care. E-file state taxes free Vision care. E-file state taxes free Long-term care. E-file state taxes free Contributions to an MSA Contributions to an Archer MSA must be made in cash. E-file state taxes free You cannot contribute stock or other property to an Archer MSA. E-file state taxes free Who can contribute to my Archer MSA?   If you are an employee, your employer may make contributions to your Archer MSA. E-file state taxes free (You do not pay tax on these contributions. E-file state taxes free ) If your employer does not make contributions to your Archer MSA, or you are self-employed, you can make your own contributions to your Archer MSA. E-file state taxes free Both you and your employer cannot make contributions to your Archer MSA in the same year. E-file state taxes free You do not have to make contributions to your Archer MSA every year. E-file state taxes free    If your spouse is covered by your HDHP and an excludable amount is contributed by your spouse's employer to an Archer MSA belonging to your spouse, you cannot make contributions to your own Archer MSA that year. E-file state taxes free Limits There are two limits on the amount you or your employer can contribute to your Archer MSA: The annual deductible limit. E-file state taxes free An income limit. E-file state taxes free Annual deductible limit. E-file state taxes free   You (or your employer) can contribute up to 75% of the annual deductible of your HDHP (65% if you have a self-only plan) to your Archer MSA. E-file state taxes free You must have the HDHP all year to contribute the full amount. E-file state taxes free If you do not qualify to contribute the full amount for the year, determine your annual deductible limit by using the worksheet in the Instructions for Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. E-file state taxes free Example 1. E-file state taxes free You have an HDHP for your family all year in 2013. E-file state taxes free The annual deductible is $5,000. E-file state taxes free You can contribute up to $3,750 ($5,000 × 75%) to your Archer MSA for the year. E-file state taxes free Example 2. E-file state taxes free You have an HDHP for your family for the entire months of July through December 2013 (6 months). E-file state taxes free The annual deductible is $5,000. E-file state taxes free You can contribute up to $1,875 ($5,000 × 75% ÷ 12 × 6) to your Archer MSA for the year. E-file state taxes free If you and your spouse each have a family plan, you are treated as having family coverage with the lower annual deductible of the two health plans. E-file state taxes free The contribution limit is split equally between you unless you agree on a different division. E-file state taxes free Income limit. E-file state taxes free   You cannot contribute more than you earned for the year from the employer through whom you have your HDHP. E-file state taxes free   If you are self-employed, you cannot contribute more than your net self-employment income. E-file state taxes free This is your income from self-employment minus expenses (including the deductible part of self-employment tax). E-file state taxes free Example 1. E-file state taxes free Noah Paul earned $25,000 from ABC Company in 2013. E-file state taxes free Through ABC, he had an HDHP for his family for the entire year. E-file state taxes free The annual deductible was $5,000. E-file state taxes free He can contribute up to $3,750 to his Archer MSA (75% × $5,000). E-file state taxes free He can contribute the full amount because he earned more than $3,750 at ABC. E-file state taxes free Example 2. E-file state taxes free Westley Lawrence is self-employed. E-file state taxes free He had an HDHP for his family for the entire year in 2013. E-file state taxes free The annual deductible was $5,000. E-file state taxes free Based on the annual deductible, the maximum contribution to his Archer MSA would have been $3,750 (75% × $5,000). E-file state taxes free However, after deducting his business expenses, Joe's net self-employment income is $2,500 for the year. E-file state taxes free Therefore, he is limited to a contribution of $2,500. E-file state taxes free Individuals enrolled in Medicare. E-file state taxes free   Beginning with the first month you are enrolled in Medicare, you cannot contribute to an Archer MSA. E-file state taxes free However, you may be eligible for a Medicare Advantage MSA, discussed later. E-file state taxes free When To Contribute You can make contributions to your Archer MSA for 2013 until April 15, 2014. E-file state taxes free Reporting Contributions on Your Return Report all contributions to your Archer MSA on Form 8853 and file it with your Form 1040 or Form 1040NR. E-file state taxes free You should include all contributions you, or your employer, made for 2013, including those made by April 15, 2014, that are designated for 2013. E-file state taxes free You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount you (or your employer) contributed during the year. E-file state taxes free Your employer's contributions should be shown in box 12 of Form W-2, Wage and Tax Statement, with code R. E-file state taxes free Follow the instructions for Form 8853 and complete the worksheet in the instructions. E-file state taxes free Report your Archer MSA deduction on Form 1040 or Form 1040NR. E-file state taxes free Excess contributions. E-file state taxes free   You will have excess contributions if the contributions to your Archer MSA for the year are greater than the limits discussed earlier. E-file state taxes free Excess contributions are not deductible. E-file state taxes free Excess contributions made by your employer are included in your gross income. E-file state taxes free If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. E-file state taxes free   Generally, you must pay a 6% excise tax on excess contributions. E-file state taxes free See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. E-file state taxes free The excise tax applies to each tax year the excess contribution remains in the account. E-file state taxes free   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. E-file state taxes free You withdraw the excess contributions by the due date, including extensions, of your tax return. E-file state taxes free You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. E-file state taxes free Deducting an excess contribution in a later year. E-file state taxes free   You may be able to deduct excess contributions for previous years that are still in your Archer MSA. E-file state taxes free The excess contribution you can deduct in the current year is the lesser of the following two amounts. E-file state taxes free Your maximum Archer MSA contribution limit for the year minus any amounts contributed to your Archer MSA for the year. E-file state taxes free The total excess contributions in your Archer MSA at the beginning of the year. E-file state taxes free   Any excess contributions remaining at the end of a tax year are subject to the excise tax. E-file state taxes free See Form 5329. E-file state taxes free Distributions From an MSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. E-file state taxes free When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your Archer MSA to send you a distribution from your Archer MSA. E-file state taxes free You can receive tax-free distributions from your Archer MSA to pay for qualified medical expenses (discussed later). E-file state taxes free If you receive distributions for other reasons, the amount will be subject to income tax and may be subject to an additional 20% tax as well. E-file state taxes free You do not have to make withdrawals from your Archer MSA each year. E-file state taxes free If you no longer qualify to make contributions, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. E-file state taxes free A distribution is money you get from your Archer MSA. E-file state taxes free The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. E-file state taxes free Qualified medical expenses. E-file state taxes free   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. E-file state taxes free These are explained in Publication 502. E-file state taxes free   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for MSA purposes. E-file state taxes free A medicine or drug will be a qualified medical expense for MSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. E-file state taxes free   Qualified medical expenses are those incurred by the following persons. E-file state taxes free You and your spouse. E-file state taxes free All dependents you claim on your tax return. E-file state taxes free Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. E-file state taxes free    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. E-file state taxes free    You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your Archer MSA. E-file state taxes free Special rules for insurance premiums. E-file state taxes free   Generally, you cannot treat insurance premiums as qualified medical expenses for Archer MSAs. E-file state taxes free You can, however, treat premiums for long-term care coverage, health care coverage while you receive unemployment benefits, or health care continuation coverage required under any federal law as qualified medical expenses for Archer MSAs. E-file state taxes free Health coverage tax credit. E-file state taxes free   You cannot claim this credit for premiums that you pay with a tax-free distribution from your Archer MSA. E-file state taxes free See Publication 502 for information on this credit. E-file state taxes free Deemed distributions from Archer MSAs. E-file state taxes free   The following situations result in deemed taxable distributions from your Archer MSA. E-file state taxes free You engaged in any transaction prohibited by section 4975 with respect to any of your Archer MSAs at any time in 2013. E-file state taxes free Your account ceases to be an Archer MSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8853. E-file state taxes free You used any portion of any of your Archer MSAs as security for a loan at any time in 2013. E-file state taxes free You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. E-file state taxes free   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the Archer MSA, Lending of money between you and the Archer MSA, Furnishing goods, services, or facilities between you and the Archer MSA, and Transfer to or use by you, or for your benefit, of any assets of the Archer MSA. E-file state taxes free   Any deemed distribution will not be treated as used to pay qualified medical expenses. E-file state taxes free These distributions are included in your income and are subject to the additional 20% tax, discussed later. E-file state taxes free Recordkeeping. E-file state taxes free You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. E-file state taxes free Do not send these records with your tax return. E-file state taxes free Keep them with your tax records. E-file state taxes free Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). E-file state taxes free If you use a distribution from your Archer MSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8853. E-file state taxes free Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. E-file state taxes free If you do not use a distribution from your Archer MSA for qualified medical expenses, you must pay tax on the distribution. E-file state taxes free Report the amount on Form 8853 and file it with your Form 1040 or Form 1040NR. E-file state taxes free You may have to pay an additional 20% tax, discussed later, on your taxable distribution. E-file state taxes free If an amount (other than a rollover) is contributed to your Archer MSA this year (by you or your employer), you also must report and pay tax on a distribution you receive from your Archer MSA this year that is used to pay medical expenses of someone who is not covered by an HDHP, or is also covered by another health plan that is not an HDHP, at the time the expenses are incurred. E-file state taxes free Rollovers. E-file state taxes free   Generally, any distribution from an Archer MSA that you roll over into another Archer MSA or an HSA is not taxable if you complete the rollover within 60 days. E-file state taxes free An Archer MSA and an HSA can only receive one rollover contribution during a 1-year period. E-file state taxes free See the Form 8853 instructions for more information. E-file state taxes free Additional tax. E-file state taxes free   There is a 20% additional tax on the part of your distributions not used for qualified medical expenses. E-file state taxes free Figure the tax on Form 8853 and file it with your Form 1040 or Form 1040NR. E-file state taxes free Report the additional tax in the total on Form 1040 or Form 1040NR. E-file state taxes free Exceptions. E-file state taxes free   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. E-file state taxes free Balance in an Archer MSA An Archer MSA is generally exempt from tax. E-file state taxes free You are permitted to take a distribution from your Archer MSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. E-file state taxes free Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). E-file state taxes free Earnings on amounts in an Archer MSA are not included in your income while held in the Archer MSA. E-file state taxes free Death of the Archer MSA Holder You should choose a beneficiary when you set up your Archer MSA. E-file state taxes free What happens to that Archer MSA when you die depends on whom you designate as the beneficiary. E-file state taxes free Spouse is the designated beneficiary. E-file state taxes free   If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death. E-file state taxes free Spouse is not the designated beneficiary. E-file state taxes free   If your spouse is not the designated beneficiary of your Archer MSA: The account stops being an Archer MSA, and The fair market value of the Archer MSA becomes taxable to the beneficiary in the year in which you die. E-file state taxes free   If your estate is the beneficiary, the fair market value of the Archer MSA will be included on your final income tax return. E-file state taxes free The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. E-file state taxes free Filing Form 8853 You must file Form 8853 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your Archer MSA during the year. E-file state taxes free You must file the form even if only your employer or your spouse's employer made contributions to the Archer MSA. E-file state taxes free If, during the tax year, you are the beneficiary of two or more Archer MSAs or you are a beneficiary of an Archer MSA and you have your own Archer MSA, you must complete a separate Form 8853 for each MSA. E-file state taxes free Enter “statement” at the top of each Form 8853 and complete the form as instructed. E-file state taxes free Next, complete a controlling Form 8853 combining the amounts shown on each of the statement Forms 8853. E-file state taxes free Attach the statements to your tax return after the controlling Form 8853. E-file state taxes free Employer Participation This section contains the rules that employers must follow if they decide to make Archer MSAs available to their employees. E-file state taxes free Unlike the previous discussions, “you” refers to the employer and not to the employee. E-file state taxes free Health plan. E-file state taxes free   If you want your employees to be able to have an Archer MSA, you must make an HDHP available to them. E-file state taxes free You can provide no additional coverage other than those exceptions listed previously under Other health coverage . E-file state taxes free Contributions. E-file state taxes free   You can make contributions to your employees' Archer MSAs. E-file state taxes free You deduct the contributions on the “Employee benefit programs” line of your business income tax return for the year in which you make the contributions. E-file state taxes free If you are filing Form 1040, Schedule C, this is Part II, line 14. E-file state taxes free Comparable contributions. E-file state taxes free   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' Archer MSAs. E-file state taxes free Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. E-file state taxes free Comparable participating employees. E-file state taxes free   Comparable participating employees: Are covered by your HDHP and are eligible to establish an Archer MSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (either part-time or full-time). E-file state taxes free Excise tax. E-file state taxes free   If you made contributions to your employees' Archer MSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. E-file state taxes free Employment taxes. E-file state taxes free   Amounts you contribute to your employees' Archer MSAs are generally not subject to employment taxes. E-file state taxes free You must report the contributions in box 12 of the Form W-2 you file for each employee. E-file state taxes free Enter code “R” in box 12. E-file state taxes free Medicare Advantage MSAs A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. E-file state taxes free To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare and have a high deductible health plan (HDHP) that meets the Medicare guidelines. E-file state taxes free A Medicare Advantage MSA is a tax-exempt trust or custodial savings account that you set up with a financial institution (such as a bank or an insurance company) in which the Medicare program can deposit money for qualified medical expenses. E-file state taxes free The money in your account is not taxed if it is used for qualified medical expenses, and it may earn interest or dividends. E-file state taxes free An HDHP is a special health insurance policy that has a high deductible. E-file state taxes free You choose the policy you want to use as part of your Medicare Advantage MSA plan. E-file state taxes free However, the policy must be approved by the Medicare program. E-file state taxes free Medicare Advantage MSAs are administered through the federal Medicare program. E-file state taxes free You can get information by calling 1-800-Medicare (1-800-633-4227) or through the Internet at www. E-file state taxes free medicare. E-file state taxes free gov. E-file state taxes free Note. E-file state taxes free You must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your tax return if you have a Medicare Advantage MSA. E-file state taxes free Flexible Spending Arrangements (FSAs) A health flexible spending arrangement (FSA) allows employees to be reimbursed for medical expenses. E-file state taxes free FSAs are usually funded through voluntary salary reduction agreements with your employer. E-file state taxes free No employment or federal income taxes are deducted from your contribution. E-file state taxes free The employer may also contribute. E-file state taxes free Note. E-file state taxes free Unlike HSAs or Archer MSAs which must be reported on Form 1040 or Form 1040NR, there are no reporting requirements for FSAs on your income tax return. E-file state taxes free For information on the interaction between a health FSA and an HSA, see Other employee health plans under Qualifying for an HSA, earlier. E-file state taxes free What are the benefits of an FSA?   You may enjoy several benefits from having an FSA. E-file state taxes free Contributions made by your employer can be excluded from your gross income. E-file state taxes free No employment or federal income taxes are deducted from the contributions. E-file state taxes free Withdrawals may be tax free if you pay qualified medical expenses. E-file state taxes free See Qualified medical expenses , later. E-file state taxes free You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account. E-file state taxes free Qualifying for an FSA Health FSAs are employer-established benefit plans. E-file state taxes free These may be offered in conjunction with other employer-provided benefits as part of a cafeteria plan. E-file state taxes free Employers have complete flexibility to offer various combinations of benefits in designing their plan. E-file state taxes free You do not have to be covered under any other health care plan to participate. E-file state taxes free Self-employed persons are not eligible for an FSA. E-file state taxes free Certain limitations may apply if you are a highly compensated participant or a key employee. E-file state taxes free Contributions to an FSA You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. E-file state taxes free This is sometimes called a salary reduction agreement. E-file state taxes free The employer may also contribute to your FSA if specified in the plan. E-file state taxes free You do not pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. E-file state taxes free However, contributions made by your employer to provide coverage for long-term care insurance must be included in income. E-file state taxes free When To Contribute At the
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E-file state taxes free Publication 4492-B - Main Content Table of Contents DefinitionsMidwestern Disaster Areas Applicable Disaster Date Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Casualty and Theft LossesTime limit for making election. E-file state taxes free Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesEmployee Retention Credit Employer Housing Credit and Exclusion Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). E-file state taxes free Definitions The following definitions are used throughout this publication. E-file state taxes free Midwestern Disaster Areas A Midwestern disaster area is an area for which a major disaster was declared by the President during the period beginning on May 20, 2008, and ending on July 31, 2008, in the state of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, or Wisconsin, as a result of severe storms, tornadoes, or flooding that occurred on the applicable disaster date. E-file state taxes free See Tables 1 and 2 for a list of the counties included in the Midwestern disaster areas. E-file state taxes free Applicable Disaster Date The term “applicable disaster date” as used in this publication, refers to the date on which the severe storms, tornadoes, or flooding occurred in the Midwestern disaster areas. E-file state taxes free You will need to know this date when using this publication for the various tax provisions. E-file state taxes free Table 1 The counties listed in Table 1 below are eligible for all tax provisions shown in this publication. E-file state taxes free Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 05/02/2008through05/12/2008 Arkansas Arkansas, Benton, Cleburne, Conway, Crittenden, Grant, Lonoke, Mississippi, Phillips, Pulaski, Saline, and Van Buren. E-file state taxes free 06/01/2008through07/22/2008 Illinois Adams, Calhoun, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper, Jersey, Lake, Lawrence, Mercer, Rock Island, Whiteside, and Winnebago. E-file state taxes free 05/30/2008through06/27/2008 Indiana Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Madison, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Tippecanoe, Vermillion, Vigo, Washington, and Wayne. E-file state taxes free 05/25/2008through08/13/2008 Iowa Adair, Adams, Allamakee, Appanoose, Audubon, Benton, Black Hawk, Boone, Bremer, Buchanan, Butler, Cass, Cedar, Cerro Gordo, Chickasaw, Clarke, Clayton, Clinton, Crawford, Dallas, Davis, Decatur, Delaware, Des Moines, Dubuque, Fayette, Floyd, Franklin, Fremont, Greene, Grundy, Guthrie, Hamilton, Hancock, Hardin, Harrison, Henry, Howard, Humboldt, Iowa, Jackson, Jasper, Johnson, Jones, Keokuk, Kossuth, Lee, Linn, Louisa, Lucas, Madison, Mahaska, Marion, Marshall, Mills, Mitchell, Monona, Monroe, Montgomery, Muscatine, Page, Polk, Pottawattamie, Poweshiek, Ringgold, Scott, Story, Tama, Union, Van Buren, Wapello, Warren, Washington, Webster, Winnebago, Winneshiek, Worth, and Wright. E-file state taxes free 05/10/2008through05/11/2008 Missouri Barry, Jasper, and Newton. E-file state taxes free 06/01/2008through08/13/2008 Missouri Adair, Andrew, Callaway, Cass, Chariton, Clark, Gentry, Greene, Harrison, Holt, Johnson, Lewis, Lincoln, Linn, Livingston, Macon, Marion, Monroe, Nodaway, Pike, Putnam, Ralls, St. E-file state taxes free Charles, Stone, Taney, Vernon, and Webster. E-file state taxes free 05/22/2008through06/24/2008 Nebraska Buffalo, Butler, Colfax, Custer, Dawson, Douglas, Gage, Hamilton, Holt, Jefferson, Kearney, Lancaster, Platte, Richardson, Sarpy, and Saunders. E-file state taxes free 06/05/2008through07/25/2008 Wisconsin Adams, Calumet, Crawford, Columbia, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Monroe, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha, and Winnebago. E-file state taxes free *For more details, go to www. E-file state taxes free fema. E-file state taxes free gov Table 2 The counties listed in Table 2 below are eligible for all of the special tax provisions shown in this publication except the following. E-file state taxes free Charitable Giving Incentives. E-file state taxes free Net Operating Losses. E-file state taxes free Education Credits. E-file state taxes free Recapture of Federal Mortgage Subsidy. E-file state taxes free Tax Relief for Temporary Relocation. E-file state taxes free Employee Retention Credit. E-file state taxes free Employer Housing Credit and Exclusion. E-file state taxes free Demolition and Clean-up Costs. E-file state taxes free Increase in Rehabilitation Credit. E-file state taxes free Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 06/01/2008through07/22/2008 Illinois Greene, Madison, Monroe, Pike, Randolph, St. E-file state taxes free Clair, and Scott. E-file state taxes free 05/30/2008through06/27/2008 Indiana Benton, Boone, Fountain, Franklin, Jay, Montgomery, Ohio, Switzerland, Union, and Wabash. E-file state taxes free 05/25/2008through08/13/2008 Iowa Carroll, Cherokee, Lyon, Palo Alto, Pocahontas, Taylor, and Wayne. E-file state taxes free 05/22/2008through06/16/2008 Kansas Barber, Barton, Bourbon, Brown, Butler, Chautauqua, Cherokee, Clark, Clay, Comanche, Cowley, Crawford, Decatur, Dickinson, Edwards, Elk, Ellis, Ellsworth, Franklin, Gove, Graham, Harper, Haskell, Hodgeman, Jackson, Jewell, Kingman, Kiowa, Lane, Linn, Logan, Mitchell, Montgomery, Ness, Norton, Osborne, Pawnee, Phillips, Pratt, Reno, Republic, Riley, Rooks, Rush, Saline, Seward, Sheridan, Smith, Stafford, Sumner, Thomas, Trego, Wallace, and Wilson. E-file state taxes free 06/06/2008through06/13/2008 Michigan Allegan, Barry, Eaton, Ingham, Lake, Manistee, Mason, Missaukee, Osceola, Ottawa, Saginaw, and Wexford. E-file state taxes free 06/06/2008through06/12/2008 Minnesota Cook, Fillmore, Freeborn, Houston, Mower, and Nobles. E-file state taxes free 06/01/2008through08/13/2008 Missouri Atchison, Audrain, Bates, Buchanan, Cape Girardeau, Carroll, Christian, Daviess, Grundy, Howard, Jefferson, Knox, Mercer, Miller, Mississippi, Morgan, New Madrid, Pemiscot, Perry, Pettis, Platte, Polk, Randolph, Ray, Saline, Schuyler, Scotland, Shelby, St. E-file state taxes free Genevieve, St. E-file state taxes free Louis, the Independent City of St. E-file state taxes free Louis, Scott, Sullivan, and Worth. E-file state taxes free 04/23/2008through04/26/2008 Nebraska Gage, Johnson, Morrill, Nemaha, and Pawnee. E-file state taxes free 05/22/2008through06/24/2008 Nebraska Adams, Blaine, Boone, Boyd, Brown, Burt, Cass, Chase, Cherry, Cuming, Dundy, Fillmore, Frontier, Furnas, Garfield, Gosper, Greeley, Hall, Hayes, Howard, Johnson, Keya Paha, Lincoln, Logan, Loup, Merrick, McPherson, Morrill, Nance, Nemaha, Otoe, Phelps, Polk, Red Willow, Rock, Saline, Seward, Sherman, Stanton, Thayer, Thomas, Thurston, Valley, Webster, Wheeler, and York. E-file state taxes free 06/27/2008 Nebraska Dodge, Douglas, Sarpy, and Saunders. E-file state taxes free 06/05/2008through07/25/2008 Wisconsin Lafayette. E-file state taxes free * For more details, go to www. E-file state taxes free fema. E-file state taxes free gov Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions This benefit applies only to the counties in Table 1. E-file state taxes free Individuals. E-file state taxes free   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% of adjusted gross income (AGI) limit. E-file state taxes free A qualified contribution is a charitable contribution paid in cash or by check to a 50% limit organization if you make an election to have the 50% limit not apply to these contributions. E-file state taxes free   A qualified contribution must also meet all of the following requirements. E-file state taxes free Be paid after May 1, 2008, and before January 1, 2009. E-file state taxes free The contribution must be for relief efforts in one or more Midwestern disaster areas. E-file state taxes free Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. E-file state taxes free   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. E-file state taxes free You can carry over any contributions you are not able to deduct for 2008 because of this limit. E-file state taxes free In 2009, the carryover of your unused qualified contributions is subject to the 50% of AGI limit. E-file state taxes free Exception. E-file state taxes free   Qualified contributions do not include contributions to certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund. E-file state taxes free Corporations. E-file state taxes free   A corporation can elect to deduct qualified cash contributions without regard to the 10% of taxable income limit if the contributions were paid after May 1, 2008, and before January 1, 2009, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund), for relief efforts in one or more Midwestern disaster areas. E-file state taxes free Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. E-file state taxes free The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. E-file state taxes free Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% of taxable income limit. E-file state taxes free Partners and shareholders. E-file state taxes free   Each partner in a partnership and each shareholder in an S corporation must make a separate election to have the appropriate limit not apply. E-file state taxes free More information. E-file state taxes free   For more information, see Publication 526 or Publication 542, Corporations. E-file state taxes free Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. E-file state taxes free Standard Mileage Rate for Charitable Use of Vehicles This benefit applies only to the counties in Table 1. E-file state taxes free The following are special standard mileage rates in effect for 2008 for the cost of operating your vehicle for providing charitable services related only to the severe storms, tornadoes, or flooding. E-file state taxes free 36 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. E-file state taxes free 41 cents per mile for the period July 1 through December 31, 2008. E-file state taxes free Mileage Reimbursements to Charitable Volunteers This benefit applies only to the counties in Table 1. E-file state taxes free You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger vehicle for the benefit of a qualified charitable organization in providing relief related to the severe storms, tornadoes, or flooding during the period beginning on the applicable disaster date, and ending on December 31, 2008. E-file state taxes free You cannot claim a deduction or credit for amounts you exclude. E-file state taxes free You must keep records of miles driven, time, place (or use), and purpose of the mileage. E-file state taxes free The amount you can exclude cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. E-file state taxes free 50. E-file state taxes free 5 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. E-file state taxes free 58. E-file state taxes free 5 cents per mile for the period July 1 through December 31, 2008. E-file state taxes free Casualty and Theft Losses This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free The following paragraphs explain changes to casualty and theft losses that were caused by the severe storms, tornadoes, or flooding in the Midwestern disaster areas. E-file state taxes free For more information, see Publication 547. E-file state taxes free Limits on personal casualty or theft losses. E-file state taxes free   Losses of personal use property that arose in a Midwestern disaster area on or after the applicable disaster date are not subject to the $100 or 10% of AGI limits. E-file state taxes free Qualifying losses include losses from casualties and thefts that arose in a Midwestern disaster area that were attributable to the severe storms, tornadoes, or flooding. E-file state taxes free When completing Form 4684, do not include on line 17 any losses that arose in a Midwestern disaster area. E-file state taxes free A loss arising in a Midwestern disaster area is not considered a loss attributable to a federally declared disaster for purposes of that line and cannot be added to your standard deduction. E-file state taxes free When to deduct the loss. E-file state taxes free   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. E-file state taxes free However, you can elect to deduct losses caused by the severe storms, tornadoes, or flooding on your return for the prior year. E-file state taxes free Special instructions for individuals who elect to claim a Midwestern disaster area casualty or theft loss for 2007. E-file state taxes free   Individuals filing or amending their 2007 tax return for casualty or theft losses that were attributable to the severe storms, tornadoes, or flooding should: Enter “Midwestern Disaster Area” at the top of Form 1040 or Form 1040X, and Complete the 2008 version of Form 4684. E-file state taxes free Cross out “2008” and enter “2007” at the top of Form 4684. E-file state taxes free Time limit for making election. E-file state taxes free   You must make this election to claim your casualty or theft loss in 2007 by the later of the following dates. E-file state taxes free The due date (without extensions) for filing your 2008 income tax return. E-file state taxes free The due date (with extensions) for filing your 2007 income tax return. E-file state taxes free Example. E-file state taxes free If you are a calendar year individual taxpayer, you have until April 15, 2009, to amend your 2007 tax return to claim a casualty or theft loss that occurred during 2008. E-file state taxes free Replacement Period for Nonrecognition of Gain This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. E-file state taxes free Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a federally declared disaster area). E-file state taxes free However, for property that was involuntarily converted on or after the applicable disaster date, as a result of the severe storms, tornadoes, or flooding, a 5-year replacement period applies if substantially all of the use of the replacement property is in a Midwestern disaster area. E-file state taxes free For more information, see the Instructions for Form 4684. E-file state taxes free Net Operating Losses This benefit applies only to the counties in Table 1. E-file state taxes free Qualified disaster recovery assistance loss. E-file state taxes free   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. E-file state taxes free However, the portion of an NOL that is a qualified disaster recovery assistance loss can be carried back to the 5 tax years before the NOL year. E-file state taxes free In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. E-file state taxes free   A qualified disaster recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified disaster recovery assistance casualty loss (as defined below), Moving expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the employment of an individual whose main home was in a Midwestern disaster area before the applicable disaster date, who was unable to remain in that home because of the severe storms, tornadoes, or flooding, and whose main job location (after the move) is in a Midwestern disaster area, Temporary housing expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, to house employees of the taxpayer whose main job location is in a Midwestern disaster area, Depreciation or amortization allowable for any qualified disaster recovery assistance property (even if you elected not to claim the special disaster recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred on or after the applicable disaster date, and before January 1, 2011, for any damage from the severe storms, tornadoes, or flooding to property located in a Midwestern disaster area. E-file state taxes free Qualified disaster recovery assistance casualty loss. E-file state taxes free   A qualified disaster recovery assistance casualty loss is any deductible section 1231 loss of property located in a Midwestern disaster area if the loss was caused by the severe storms, tornadoes, or flooding. E-file state taxes free For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the severe storms, tornadoes, or flooding of property located in a Midwestern disaster area. E-file state taxes free Any such loss taken into account in figuring your qualified disaster recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. E-file state taxes free More information. E-file state taxes free   For more information on NOLs, see Publication 536 or Publication 542, Corporations. E-file state taxes free IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of the severe storms, tornadoes, or flooding. E-file state taxes free Definitions Qualified disaster recovery assistance distribution. E-file state taxes free   A qualified disaster recovery assistance distribution is any distribution you received from an eligible retirement plan if all of the following apply. E-file state taxes free The distribution was made on or after the applicable disaster date and before January 1, 2010. E-file state taxes free Your main home was located in a Midwestern disaster area on the applicable disaster date. E-file state taxes free You sustained an economic loss because of the severe storms, tornadoes, or flooding and your main home was in a Midwestern disaster area on the applicable disaster date. E-file state taxes free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. E-file state taxes free   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified disaster recovery assistance distribution, regardless of whether the distribution was made on account of the severe storms, tornadoes, or flooding. E-file state taxes free Qualified disaster recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. E-file state taxes free   The total of your qualified disaster recovery assistance distributions from all plans is limited to $100,000. E-file state taxes free If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you can allocate the $100,000 limit among the plans any way you choose. E-file state taxes free   A reduction or offset (on or after the applicable disaster date) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified disaster recovery assistance distribution. E-file state taxes free Eligible retirement plan. E-file state taxes free   An eligible retirement plan can be any of the following. E-file state taxes free A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). E-file state taxes free A qualified annuity plan. E-file state taxes free A tax-sheltered annuity contract. E-file state taxes free A governmental section 457 deferred compensation plan. E-file state taxes free A traditional, SEP, SIMPLE, or Roth IRA. E-file state taxes free Main home. E-file state taxes free   Generally, your main home is the home where you live most of the time. E-file state taxes free A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. E-file state taxes free Taxation of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free Qualified disaster recovery assistance distributions are included in income in equal amounts over three years. E-file state taxes free However, if you elect, you can include the entire distribution in your income in the year it was received. E-file state taxes free Qualified disaster recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). E-file state taxes free However, any distributions you receive in excess of the $100,000 qualified disaster recovery assistance distribution limit may be subject to the additional tax on early distributions. E-file state taxes free For more information, see Form 8930. E-file state taxes free Repayment of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free If you choose, you generally can repay any portion of a qualified disaster recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. E-file state taxes free Also, you can repay a qualified disaster recovery assistance distribution made on account of a hardship from a retirement plan. E-file state taxes free However, see Exceptions later for qualified disaster recovery assistance distributions you cannot repay. E-file state taxes free You have three years from the day after the date you received the distribution to make a repayment. E-file state taxes free Amounts that are repaid are treated as a qualified rollover and are not included in income. E-file state taxes free Also, a repayment of a qualified disaster recovery assistance distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. E-file state taxes free See Form 8930 for more information on how to report repayments. E-file state taxes free Exceptions. E-file state taxes free   You cannot repay the following types of distributions. E-file state taxes free Qualified disaster recovery assistance distributions received as a beneficiary (other than a surviving spouse). E-file state taxes free Required minimum distributions. E-file state taxes free Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. E-file state taxes free Repayment of Qualified Distributions for the Purchase or Construction of a Main Home This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free If you received a qualified distribution to purchase or construct a main home in a Midwestern disaster area, you can repay part or all of that distribution on or after the applicable disaster date, but no later than March 3, 2009, to an eligible retirement plan. E-file state taxes free For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. E-file state taxes free To be a qualified distribution, the distribution must meet all of the following requirements. E-file state taxes free The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. E-file state taxes free The distribution was received after the date that was 6 months before the day after the applicable disaster date. E-file state taxes free The distribution was to be used to purchase or construct a main home in a Midwestern disaster area that was not purchased or constructed because of the severe storms, tornadoes, or flooding. E-file state taxes free Amounts that are repaid before March 4, 2009, are treated as a qualified rollover and are not included in income. E-file state taxes free Also, a repayment of a qualified distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. E-file state taxes free A qualified distribution not repaid before March 4, 2009, may be taxable for 2007 or 2008 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. E-file state taxes free You must file Form 8930 if you received a qualified distribution that you repaid, in whole or in part, before March 4, 2009. E-file state taxes free Loans From Qualified Plans This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free The following benefits are available to qualified individuals. E-file state taxes free Increases to the limits for distributions treated as loans from employer plans. E-file state taxes free A 1-year suspension for payments due on plan loans. E-file state taxes free Qualified individual. E-file state taxes free   You are a qualified individual if your main home was located in a Midwestern disaster area on the applicable disaster date and you had an economic loss because of the severe storms, tornadoes, or flooding. E-file state taxes free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. E-file state taxes free Limits on plan loans. E-file state taxes free   The $50,000 limit for distributions treated as plan loans is increased to $100,000. E-file state taxes free In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. E-file state taxes free If your main home was located in a Midwestern disaster area, the higher limits apply only to loans received during the period beginning on October 3, 2008, and ending on December 31, 2009. E-file state taxes free One-year suspension of loan payments. E-file state taxes free   Payments on plan loans outstanding on or after the applicable disaster date, may be suspended for 1 year by the plan administrator. E-file state taxes free To qualify for the suspension, the due date for any loan payment must occur during the period beginning on the applicable disaster date and ending on December 31, 2009. E-file state taxes free Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free You can elect to use your 2007 earned income to figure your earned income credit (EIC) and additional child tax credit for 2008 if: Your 2008 earned income is less than your 2007 earned income, and At least one of the following statements is true. E-file state taxes free Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 1. E-file state taxes free Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 2, and you were displaced from that home because of the severe storms, tornadoes, or flooding. E-file state taxes free Earned income. E-file state taxes free    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. E-file state taxes free If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. E-file state taxes free Joint returns. E-file state taxes free   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. E-file state taxes free If you make the election, your 2007 earned income is the sum of your 2007 earned income and your spouse's 2007 earned income. E-file state taxes free Making the election. E-file state taxes free   If you make the election to use your 2007 earned income, the election applies for figuring both the EIC and the additional child tax credit. E-file state taxes free However, you can make the election for the additional child tax credit even if you do not take the EIC. E-file state taxes free   Electing to use your 2007 earned income can increase or decrease your EIC. E-file state taxes free Take the following steps to decide whether to make the election. E-file state taxes free Figure your 2008 EIC using your 2007 earned income. E-file state taxes free Figure your 2008 additional child tax credit using your 2007 earned income for EIC purposes. E-file state taxes free Add the results of (1) and (2). E-file state taxes free Figure your 2008 EIC using your 2008 earned income. E-file state taxes free Figure your 2008 additional child tax credit using your 2008 earned income for additional child tax credit purposes. E-file state taxes free Add the results of (4) and (5). E-file state taxes free Compare the results of (3) and (6). E-file state taxes free If (3) is larger than (6), it is to your benefit to make the election. E-file state taxes free If (3) is equal to or smaller than (6), making the election will not help you. E-file state taxes free   If you elect to use your 2007 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2007 earned income on the dotted line next to line 64a of Form 1040, on the line next to line 40a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. E-file state taxes free   If you elect to use your 2007 earned income and you are claiming the additional child tax credit, enter your 2007 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. E-file state taxes free Getting your 2007 tax return information. E-file state taxes free   If you do not have your 2007 tax records, you can get the amount of earned income used to figure your 2007 EIC by calling 1-866-562-5227. E-file state taxes free You can also get this information by visiting the IRS website at www. E-file state taxes free irs. E-file state taxes free gov. E-file state taxes free   If you prefer to figure your 2007 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. E-file state taxes free See Request for Copy or Transcript of Tax Return on page 11. E-file state taxes free Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free You can claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by the severe storms, tornadoes, or flooding. E-file state taxes free The additional exemption amount is claimed on Form 8914. E-file state taxes free You can claim an additional exemption amount only one time for a specific individual. E-file state taxes free If you claimed an additional exemption amount for an individual in 2008, you cannot claim that amount again for the same individual in 2009. E-file state taxes free The maximum additional exemption amount you can claim for all displaced individuals is $2,000. E-file state taxes free Any additional exemption amount you claimed for displaced individuals in 2008 will reduce the $2,000 maximum for 2009. E-file state taxes free The $2,000 limit applies to a husband and wife, whether the husband and wife file joint returns or separate returns. E-file state taxes free If married filing separately, the $2,000 can be divided in $500 increments between the spouses. E-file state taxes free For example, if one spouse claims an additional exemption amount for one displaced individual, the other spouse, if otherwise eligible, can claim additional exemption amounts for three different displaced individuals. E-file state taxes free If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. E-file state taxes free In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). E-file state taxes free To qualify as a displaced individual, the individual: Must have had his or her main home in a Midwestern disaster area on the applicable disaster date, and he or she must have been displaced from that home. E-file state taxes free If the individual's main home was located in a Midwestern disaster area as shown in Table 2, that home must have been damaged by the severe storms, tornadoes, or flooding or the individual must have been evacuated from that home because of the severe storms, tornadoes, or flooding, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. E-file state taxes free You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. E-file state taxes free You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. E-file state taxes free Food, clothing, or personal items consumed or used by the displaced individual. E-file state taxes free Reimbursement for the cost of any long distance telephone calls made by the displaced individual. E-file state taxes free Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. E-file state taxes free However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. E-file state taxes free Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. E-file state taxes free For more information, see Form 8914. E-file state taxes free Education Credits This benefit applies only to the counties in Table 1. E-file state taxes free The education credits have been expanded for students attending an eligible educational institution located in a Midwestern disaster area (Midwestern disaster area students) for any tax year beginning in 2008 or 2009. E-file state taxes free The Hope credit for a Midwestern disaster area student is increased to 100% of the first $2,400 in qualified education expenses and 50% of the next $2,400 of qualified education expenses for a maximum credit of $3,600 per student. E-file state taxes free The lifetime learning credit rate for a Midwestern disaster area student is increased from 20% to 40%. E-file state taxes free The definition of qualified education expenses for a Midwestern disaster area student also has been expanded. E-file state taxes free This expanded definition also applies to the tuition and fees deduction claimed on Form 8917. E-file state taxes free In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a Midwestern disaster area student include the following. E-file state taxes free Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. E-file state taxes free For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. E-file state taxes free For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. E-file state taxes free The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. E-file state taxes free The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. E-file state taxes free You will need to contact the eligible educational institution for qualified room and board costs. E-file state taxes free For more information, see Form 8863. E-file state taxes free See Form 8917 for the tuition and fees deduction. E-file state taxes free Recapture of Federal Mortgage Subsidy This benefit applies only to the counties in Table 1. E-file state taxes free Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. E-file state taxes free However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. E-file state taxes free This amount is increased to $150,000 if the loan was provided before 2011 and was used to alter, repair, or improve an existing owner-occupied residence in a Midwestern disaster area as shown in Table 1. E-file state taxes free Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. E-file state taxes free Generally, discharges of nonbusiness debts (such as mortgages) made on or after the applicable disaster date and before January 1, 2010, are excluded from income for individuals whose main home was in a Midwestern disaster area on the applicable disaster date. E-file state taxes free If the individual's main home was located in a Midwestern disaster area as shown in Table 2, the individual also must have had an economic loss because of the severe storms, tornadoes, or flooding. E-file state taxes free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. E-file state taxes free This relief does not apply to any debt secured by real property located outside a Midwestern disaster area. E-file state taxes free You may also have to reduce certain tax attributes by the amount excluded. E-file state taxes free For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). E-file state taxes free Tax Relief for Temporary Relocation This benefit applies only to the counties in Table 1. E-file state taxes free The IRS can adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2008 or 2009 as a result of a temporary relocation caused by the severe storms, tornadoes, or flooding. E-file state taxes free However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. E-file state taxes free The IRS has exercised this authority as follows. E-file state taxes free In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. E-file state taxes free In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. E-file state taxes free You can treat as a student an individual who enrolled in school before the applicable disaster date, and who is unable to attend classes because of the severe storms, tornadoes, or flooding, for each month of the enrollment period that individual is prevented by the severe storms, tornadoes, or flooding from attending school as planned. E-file state taxes free Additional Tax Relief for Businesses Employee Retention Credit This benefit applies only to the counties in Table 1. E-file state taxes free An eligible employer who conducted an active trade or business in a Midwestern disaster area can claim the employee retention credit. E-file state taxes free The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). E-file state taxes free Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). E-file state taxes free Use Form 5884-A to claim the credit. E-file state taxes free Employers affected by the severe storms, tornadoes, or flooding. E-file state taxes free   The following definitions apply to employers affected by the severe storms, tornadoes, or flooding. E-file state taxes free Eligible employer. E-file state taxes free   For this purpose, an eligible employer is any employer who meets all of the following. E-file state taxes free Employed an average of not more than 200 employees on business days during the tax year before the applicable disaster date. E-file state taxes free Conducted an active trade or business on the applicable disaster date in a Midwestern disaster area. E-file state taxes free Whose trade or business was inoperable on any day after the applicable disaster date and before January 1, 2009, because of the damage caused by the severe storms, tornadoes, or flooding. E-file state taxes free Eligible employee. E-file state taxes free   For this purpose, an eligible employee is an employee whose principal place of employment on the applicable disaster date with such eligible employer was in a Midwestern disaster area. E-file state taxes free An employee is not an eligible employee for purposes of the severe storms, tornadoes, or flooding if the employee is treated as an eligible employee for the work opportunity credit. E-file state taxes free Qualified wages. E-file state taxes free   Qualified wages are wages (up to $6,000 per employee) you paid or incurred before January 1, 2009, for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable disaster, and ending on the date your trade or business resumed significant operations at that place. E-file state taxes free In addition, the wages must have been paid or incurred after the applicable disaster date. E-file state taxes free    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. E-file state taxes free    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). E-file state taxes free Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. E-file state taxes free Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. E-file state taxes free   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. E-file state taxes free For a special rule that applies to railroad employees, see section 51(h)(1)(B). E-file state taxes free   Qualified wages do not include the following. E-file state taxes free Wages paid to your dependent or a related individual. E-file state taxes free See section 51(i)(1). E-file state taxes free Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. E-file state taxes free Wages for services of replacement workers during a strike or lockout. E-file state taxes free   For more information, see Form 5884-A. E-file state taxes free Employer Housing Credit and Exclusion This benefit applies only to the counties in Table 1. E-file state taxes free An employer who conducted an active trade or business in a Midwestern disaster area can claim the employer housing credit. E-file state taxes free The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from November 1, 2008, through May 1, 2009. E-file state taxes free The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). E-file state taxes free Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). E-file state taxes free The employer must use Form 5884-A to claim the credit. E-file state taxes free A qualified employee is an individual who had a main home in a Midwestern disaster area on the applicable disaster date, and who performs substantially all employment services in a Midwestern disaster area for the employer furnishing the lodging. E-file state taxes free The employee cannot be your dependent or a related individual. E-file state taxes free See section 51(i)(1). E-file state taxes free For more information, see Form 5884-A. E-file state taxes free Demolition and Clean-up Costs This benefit applies only to the counties in Table 1. E-file state taxes free You can elect to deduct 50% of any qualified disaster recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. E-file state taxes free Qualified disaster recovery assistance clean-up costs are any amounts paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the removal of debris from, or the demolition of structures on, real property located in a Midwestern disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. E-file state taxes free Qualified disaster recovery assistance clean-up costs are limited to amounts necessary due to damage attributable to the severe storms, tornadoes, or flooding in the Midwestern disaster areas. E-file state taxes free Increase in Rehabilitation Tax Credit This benefit applies only to the counties in Table 1. E-file state taxes free The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred on or after the applicable disaster date, and before January 1, 2012, on buildings located in a Midwestern disaster area as follows. E-file state taxes free For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. E-file state taxes free For certified historic structures, the credit percentage is increased from 20% to 26%. E-file state taxes free For more information, see Form 3468, Investment Credit. E-file state taxes free Request for Copy or Transcript of Tax Return Request for copy of tax return. E-file state taxes free   You can use Form 4506 to order a copy of your tax return. E-file state taxes free Generally, there is a $57 fee for requesting each copy of a tax return. E-file state taxes free If your main home, principal place of business, or tax records are located in a Midwestern disaster area, the fee will be waived if “Midwestern Disaster Area” is written in red across the top of the form when filed. E-file state taxes free Request for transcript of tax return. E-file state taxes free   You can use Form 4506-T to order a free transcript of your tax return. E-file state taxes free A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. E-file state taxes free You can also call 1-800-829-1040 to order a transcript. E-file state taxes free How To Get Tax Help Special IRS assistance. E-file state taxes free   The IRS is providing special help for those affected by the severe storms, tornadoes, or flooding, as well as survivors and personal representatives of the victims. E-file state taxes free We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by recent federally declared disasters, or who have other tax issues related to the severe storms, tornadoes, or flooding. E-file state taxes free Call 1-866-562-5227 Monday through FridayIn English–7 a. E-file state taxes free m. E-file state taxes free to 10 p. E-file state taxes free m. E-file state taxes free local timeIn Spanish–8 a. E-file state taxes free m. E-file state taxes free to 9:30 p. E-file state taxes free m. E-file state taxes free local time   The IRS website at www. E-file state taxes free irs. E-file state taxes free gov has notices and other tax relief information. E-file state taxes free Check it periodically for any new guidance. E-file state taxes free You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. E-file state taxes free By selecting the method that is best for you, you will have quick and easy access to tax help. E-file state taxes free Contacting your Taxpayer Advocate. E-file state taxes free   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. E-file state taxes free Here are seven things every taxpayer should know about TAS: TAS is your voice at the IRS. E-file state taxes free Our service is free, confidential, and tailored to meet your needs. E-file state taxes free You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. E-file state taxes free TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. E-file state taxes free This includes businesses as well as individuals. E-file state taxes free TAS employees know the IRS and how to navigate it. E-file state taxes free We will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. E-file state taxes free TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. E-file state taxes free You can call your local advocate, whose number is in your phone book, in Pub. E-file state taxes free 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. E-file state taxes free irs. E-file state taxes free gov/advocate. E-file state taxes free You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. E-file state taxes free You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. E-file state taxes free taxtoolkit. E-file state taxes free irs. E-file state taxes free gov. E-file state taxes free Low Income Taxpayer Clinics (LITCs). E-file state taxes free   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. E-file state taxes free LITCs are independent from the IRS. E-file state taxes free Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. E-file state taxes free If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. E-file state taxes free For more information, see Publication 4134, Low Income Taxpayer Clinic List. E-file state taxes free This publication is available at www. E-file state taxes free irs. E-file state taxes free gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. E-file state taxes free Free tax services. E-file state taxes free   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. E-file state taxes free It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. E-file state taxes free It also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on your telephone. E-file state taxes free   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. E-file state taxes free Free help with your return. E-file state taxes free   Free help in preparing your return is available nationwide from IRS-trained volunteers. E-file state taxes free The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. E-file state taxes free Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. E-file state taxes free To find the nearest VITA or TCE site, call 1-800-829-1040. E-file state taxes free   As part of the TCE program, AARP offers the Tax-Aide counseling program. E-file state taxes free To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website atwww. E-file state taxes free aarp. E-file state taxes free org/money/taxaide. E-file state taxes free   For more information on these programs, go to www. E-file state taxes free irs. E-file state taxes free gov and enter keyword “VITA” in the upper right-hand corner. E-file state taxes free Internet. E-file state taxes free You can access the IRS website at www. E-file state taxes free irs. E-file state taxes free gov 24 hours a day, 7 days a week to: E-file your return. E-file state taxes free Find out about commercial tax preparation and e-file services available free to eligible taxpayers. E-file state taxes free Check the status of your 2009 refund. E-file state taxes free Go to www. E-file state taxes free irs. E-file state taxes free gov and click on Where's My Refund. E-file state taxes free Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. E-file state taxes free If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). E-file state taxes free Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. E-file state taxes free Download forms, instructions, and publications. E-file state taxes free Order IRS products online. E-file state taxes free Research your tax questions online. E-file state taxes free Search publications online by topic or keyword. E-file state taxes free Use the online Internal Revenue Code, Regulations, or other official guidance. E-file state taxes free View Internal Revenue Bulletins (IRBs) published in the last few years. E-file state taxes free Figure your withholding allowances using the withholding calculator online at www. E-file state taxes free irs. E-file state taxes free gov/individuals. E-file state taxes free Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant. E-file state taxes free Sign up to receive local and national tax news by email. E-file state taxes free Get information on starting and operating a small business. E-file state taxes free Phone. E-file state taxes free Many services are available by phone. E-file state taxes free Ordering forms, instructions, and publications. E-file state taxes free Call 1-800-TAX FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. E-file state taxes free You should receive your order within 10 days. E-file state taxes free Asking tax questions. E-file state taxes free Call the IRS with your tax questions at 1-800-829-1040. E-file state taxes free Solving problems. E-file state taxes free You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. E-file state taxes free An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. E-file state taxes free Call your local Taxpayer Assistance Center for an appointment. E-file state taxes free To find the number, go to www. E-file state taxes free irs. E-file state taxes free gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. E-file state taxes free TTY/TDD equipment. E-file state taxes free If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. E-file state taxes free TeleTax topics. E-file state taxes free Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. E-file state taxes free Refund information. E-file state taxes free To check the status of your 2009 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). E-file state taxes free Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. E-file state taxes free If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). E-file state taxes free Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. E-file state taxes free Refunds are sent out weekly on Fridays. E-file state taxes free If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. E-file state taxes free Other refund information. E-file state taxes free To check the status of a prior year refund or amended return refund, call 1-800-829-1954. E-file state taxes free Evaluating the quality of our telephone services. E-file state taxes free To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. E-file state taxes free One method is for a second IRS representative to listen in on or record random telephone calls. E-file state taxes free Another is to ask some callers to complete a short survey at the end of the call. E-file state taxes free Walk-in. E-file state taxes free Many products and services are available on a walk-in basis. E-file state taxes free Products. E-file state taxes free You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. E-file state taxes free Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. E-file state taxes free Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. E-file state taxes free Services. E-file state taxes free You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. E-file state taxes free An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. E-file state taxes free If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. E-file state taxes free No appointment is necessary—just walk in. E-file state taxes free If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. E-file state taxes free A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. E-file state taxes free If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. E-file state taxes free All other issues will be handled without an appointment. E-file state taxes free To find the number of your local office, go to www. E-file state taxes free irs. E-file state taxes free gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. E-file state taxes free Mail. E-file state taxes free You can send your order for forms, instructions, and publications to the address below. E-file state taxes free You should receive a response within 10 days after your request is received. E-file state taxes free Internal Revenue Service1201 N. E-file state taxes free Mitsubishi MotorwayBloomington, IL 61705-6613 DVD for tax products. E-file state taxes free You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. E-file state taxes free Prior-year forms, instructions, and publications. E-file state taxes free Tax Map: an electronic research tool and finding aid. E-file state taxes free Tax law frequently asked questions. E-file state taxes free Tax Topics from the IRS telephone response system. E-file state taxes free Internal Revenue Code—Title 26 of the U. E-file state taxes free S. E-file state taxes free Code. E-file state taxes free Fill-in, print, and save features for most tax forms. E-file state taxes free Internal Revenue Bulletins. E-file state taxes free Toll-free and email technical support. E-file state taxes free Two releases during the year. E-file state taxes free – The first release will ship the beginning of January 2010. E-file state taxes free – The final release will ship the beginning of March 2010. E-file state taxes free Purchase the DVD from National Technical Information Service (NTIS) at www. E-file state taxes free irs. E-file state taxes free gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). E-file state taxes free Prev  Up  Next   Home   More Online Publications