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Federal Tax Return 1040ez

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Federal Tax Return 1040ez

Federal tax return 1040ez Car Expenses Table of Contents Introduction Depreciation of CarSpecial Depreciation Allowance Depreciation Limit Amended Return Election Not To Claim Special Allowance If you purchased a car after September 10, 2001, for use in your business (or as an employee) and figure your deductible expenses using the actual car expense method, new law contains provisions that may affect your depreciation deduction for that car. Federal tax return 1040ez Publication 463, Travel, Entertainment, Gift, and Car Expenses, contains information on figuring depreciation on your car. Federal tax return 1040ez However, Publication 463 does not contain the new provisions because it was printed before the law was enacted. Federal tax return 1040ez The new provisions are in the Supplement to Publication 463, which is reprinted below. Federal tax return 1040ez Supplement to Publication 463 Travel, Entertainment, Gift, and Car Expenses   Introduction This supplemental publication is for taxpayers who purchased a car for business purposes after September 10, 2001, and figure their deductible expenses, including a deduction for depreciation, using the actual car expense method. Federal tax return 1040ez After Publication 463 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. Federal tax return 1040ez Certain provisions of this new law may reduce your taxes for 2001. Federal tax return 1040ez The new law contains the following provisions. Federal tax return 1040ez A new depreciation deduction, the special depreciation allowance. Federal tax return 1040ez An increase in the limit on depreciation for any car for which you claim the new special depreciation allowance. Federal tax return 1040ez If you have already filed your 2001 return, you may wish to file an amended return to claim any of these benefits. Federal tax return 1040ez See Amended Return, later. Federal tax return 1040ez Depreciation of Car If you used the actual car expense method to figure your deduction for a car you own and use in your business (or as an employee), you generally can claim a depreciation deduction. Federal tax return 1040ez However, there is a limit on the depreciation deduction you can take for your car each year. Federal tax return 1040ez See Depreciation Limit later. Federal tax return 1040ez Special Depreciation Allowance The new law allows you to claim a special depreciation allowance. Federal tax return 1040ez This special allowance is a deduction equal to 30% of the depreciable basis of qualified property. Federal tax return 1040ez You figure the amount of the special depreciation allowance after any section 179 deduction you choose to claim, but before figuring your regular depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS). Federal tax return 1040ez See Depreciation Deduction under Actual Car Expenses in chapter 4 of Publication 463 for information about MACRS. Federal tax return 1040ez You can claim the special depreciation allowance only for the year the qualified property is placed in service. Federal tax return 1040ez Qualified property. Federal tax return 1040ez   Qualified property includes a car (any four-wheeled vehicle, including a truck or van not more than 6,000 pounds, that is made primarily for use on public streets, roads, and highways) that meets all of the following requirements. Federal tax return 1040ez You bought it new. Federal tax return 1040ez You bought it after September 10, 2001. Federal tax return 1040ez (But a car is not qualified property if a binding written contract for you to buy the car was in effect before September 11, 2001. Federal tax return 1040ez ) You began using it for business after September 10, 2001, and used it more than 50% in a qualified business use. Federal tax return 1040ez Example. Federal tax return 1040ez Bob bought a new car on October 15, 2001, for $20,000 and placed it in service immediately, using it 75% for business. Federal tax return 1040ez Bob's car is qualified property. Federal tax return 1040ez Bob chooses not to take a section 179 deduction for the car. Federal tax return 1040ez He does claim the new special depreciation allowance. Federal tax return 1040ez Bob first must figure the car's depreciable basis, which is $15,000 ($20,000 × . Federal tax return 1040ez 75). Federal tax return 1040ez He then figures the special depreciation allowance of $4,500 ($15,000 × . Federal tax return 1040ez 30). Federal tax return 1040ez The remaining depreciable basis of $10,500 ($15,000 - $4,500) is depreciated using MACRS (200% declining balance method, half-year convention) and results in a deduction of $2,100 ($10,500 × . Federal tax return 1040ez 20), for a total depreciation deduction for 2001 of $6,600 ($4,500 + $2,100). Federal tax return 1040ez However, Bob's depreciation deduction is limited to $5,745 ($7,660 × . Federal tax return 1040ez 75), as discussed next. Federal tax return 1040ez Depreciation Limit The limit on your depreciation deduction for 2001 is increased to $7,660 for a car that is qualified property (defined above) and for which you claim the special depreciation allowance. Federal tax return 1040ez The limit is increased to $23,080 if the car is an electric car. Federal tax return 1040ez The section 179 deduction is treated as depreciation for purposes of this limit. Federal tax return 1040ez If you use a car less than 100% in your business or work, the limit is $7,660 (or $23,080 for an electric car) multiplied by the percentage of business and investment use during the year. Federal tax return 1040ez For cars that do not qualify for (or for which you choose not to claim) the special depreciation allowance, the limit remains $3,060 ($9,280 for electric cars). Federal tax return 1040ez Amended Return If you filed your 2001 calendar year return before June 1, 2002, and did not claim the new special depreciation allowance for a qualified car, you can claim it by filing an amended return on Form 1040X, Amended U. Federal tax return 1040ez S. Federal tax return 1040ez Individual Income Tax Return, by April 15, 2003. Federal tax return 1040ez At the top of the Form 1040X, print “Filed pursuant to Revenue Procedure 2002–33. Federal tax return 1040ez ” If you are an employee, attach Form 2106, Employee Business Expenses (revised March 2002). Federal tax return 1040ez If you are self-employed, attach Form 4562, Depreciation and Amortization (revised March 2002). Federal tax return 1040ez Or, you can claim the special depreciation allowance by filing Form 3115, Application for Change in Accounting Method, with your 2002 return. Federal tax return 1040ez For details, see Revenue Procedure 2002–33. Federal tax return 1040ez (But, filing Form 1040X for 2001 enables you to claim the special allowance earlier than attaching Form 3115 to your 2002 return. Federal tax return 1040ez ) You cannot claim the special depreciation allowance on an amended return (or by using Form 3115) if you made, or are treated as having made, the election not to claim it described later. Federal tax return 1040ez Example. Federal tax return 1040ez The facts are the same as in the previous example except that Bob filed his original 2001 income tax return on April 15, 2002, and claimed a $3,000 ($20,000 x . Federal tax return 1040ez 75 x . Federal tax return 1040ez 20) depreciation deduction for his new car using MACRS. Federal tax return 1040ez Bob now wishes to claim the special depreciation allowance for his new car on an amended 2001 return. Federal tax return 1040ez Bob, who is an employee, files Form 1040X, by April 15, 2003, with an updated Form 2106 (revised March 2002) attached, increasing his total depreciation deduction to $5,745, as figured in the earlier example. Federal tax return 1040ez Bob's new filled-in Form 2106 is shown later. Federal tax return 1040ez Election Not To Claim Special Allowance You can elect not to claim the special depreciation allowance for a car by making a statement attached to, or written on, your return indicating that you are electing not to claim the special depreciation allowance for 5-year property. Federal tax return 1040ez As a general rule, you must make this election by the due date (including extensions) of your return. Federal tax return 1040ez You can have an automatic extension of 6 months from the due date of your return (excluding extensions) to make the election with an amended return. Federal tax return 1040ez To get this extension, you must have filed your original return by the due date (including extensions). Federal tax return 1040ez At the top of the statement, print “Filed pursuant to section 301. Federal tax return 1040ez 9100–2. Federal tax return 1040ez ” If you elect not to claim the special depreciation allowance for a car, you cannot claim it for any other 5-year property placed in service during the same year. Federal tax return 1040ez Unless you elect (or are treated as electing) not to claim the special depreciation allowance, you must reduce the car's adjusted basis by the amount of the allowance, even if the allowance was not claimed. Federal tax return 1040ez Deemed election for return filed before June 1, 2002. Federal tax return 1040ez   If you did not make the election not to claim the special depreciation allowance in the time and manner described above, you will still be treated as electing not to claim it if all of the following apply. Federal tax return 1040ez You filed your 2001 return before June 1, 2002. Federal tax return 1040ez You claimed depreciation on your return but did not claim the special depreciation allowance. Federal tax return 1040ez You did not file an amended 2001 return by April 15, 2003, or a Form 3115 with your 2002 return, to claim the special depreciation allowance. Federal tax return 1040ez Form 2106, Page 1, for Bob Smith Form 2106, Page 2, for Bob Smith Prev  Up  Next   Home   More Online Publications
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Letter 2761C Frequently Asked Questions (FAQs)

What is the letter telling me?

The letter is requesting your combat zone service dates to ensure that we provide you with the special provisions and protection of the combat zone deferment. It may also request copies of military orders or other documentation to support your time served in a combat zone. If you are a civilian working in support of the Armed Forces, it may ask for a Letter of Authorization or a letter from your employer.

What do I have to do?

Provide us with documentation, if requested, and your entry and exit dates in and out of the Combat Zone based on your military orders.

How much time do I have?

The letter will provide you when and where the information needs to be returned to.

What happens if I don't take any action?

If you do not provide us these dates, you will not receive the penalty and interest reductions that servicemen and women and qualified civilians are entitled to under Internal Revenue Code (IRC) 7508 or the Soldiers and Sailors Relief Act.

Who should I contact?

If you have any questions about this letter, call us at the number printed in the letter. The person who answers the phone will assist you.

What if I don't agree or have already taken corrective action?

If you do not agree with this letter, call us immediately at the number included. We will do our best to help you. If you have called us about this matter before, but we did not correct the problem, you may want to contact the Office of the Taxpayer Advocate.

Page Last Reviewed or Updated: 30-Jan-2014

The Federal Tax Return 1040ez

Federal tax return 1040ez 5. Federal tax return 1040ez   Credits Table of Contents Credit for the Elderly or the DisabledCan You Take the Credit? Figuring the Credit Child and Dependent Care Credit Earned Income Credit (EIC)Do You Qualify for the Earned Income Credit (EIC)? Figuring the EIC This chapter briefly discusses the credit for the elderly or disabled, the child and dependent care credit, and the earned income credit. Federal tax return 1040ez You may be able to reduce your federal income tax by claiming one or more of these credits. Federal tax return 1040ez Credit for the Elderly or the Disabled This section explains who qualifies for the credit for the elderly or the disabled and how to figure this credit. Federal tax return 1040ez For more information, see Publication 524, Credit for the Elderly or the Disabled. Federal tax return 1040ez You can take the credit only if you file Form 1040 or Form 1040A. Federal tax return 1040ez You cannot take the credit if you file Form 1040EZ or Form 1040NR. Federal tax return 1040ez Can You Take the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. Federal tax return 1040ez You are a qualified individual. Federal tax return 1040ez Your income is not more than certain limits. Federal tax return 1040ez  You can use Figure 5-A and Figure 5-B as guides to see if you are eligible for the credit. Federal tax return 1040ez   Qualified Individual You are a qualified individual for this credit if you are a U. Federal tax return 1040ez S. Federal tax return 1040ez citizen or resident alien, and either of the following applies. Federal tax return 1040ez You were age 65 or older at the end of 2013. Federal tax return 1040ez You were under age 65 at the end of 2013 and all three of the following statements are true. Federal tax return 1040ez You retired on permanent and total disability (explained later). Federal tax return 1040ez You received taxable disability income for 2013. Federal tax return 1040ez On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). Federal tax return 1040ez Age 65. Federal tax return 1040ez You are considered to be age 65 on the day before your 65th birthday. Federal tax return 1040ez Therefore, you are considered to be age 65 at the end of 2013 if you were born before January 2, 1949. Federal tax return 1040ez Figure 5-A. Federal tax return 1040ez Are You a Qualified Individual? This image is too large to be displayed in the current screen. Federal tax return 1040ez Please click the link to view the image. Federal tax return 1040ez Figure 5-A, Are you a qualified individual? U. Federal tax return 1040ez S. Federal tax return 1040ez citizen or resident alien. Federal tax return 1040ez   You must be a U. Federal tax return 1040ez S. Federal tax return 1040ez citizen or resident alien (or be treated as a resident alien) to take the credit. Federal tax return 1040ez Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. Federal tax return 1040ez Exceptions. Federal tax return 1040ez   You may be able to take the credit if you are a nonresident alien who is married to a U. Federal tax return 1040ez S. Federal tax return 1040ez citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. Federal tax return 1040ez S. Federal tax return 1040ez resident alien. Federal tax return 1040ez If you make that choice, both you and your spouse are taxed on your worldwide income. Federal tax return 1040ez   If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. Federal tax return 1040ez S. Federal tax return 1040ez citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. Federal tax return 1040ez S. Federal tax return 1040ez resident alien for the entire year. Federal tax return 1040ez In that case, you may be allowed to take the credit. Federal tax return 1040ez   For information on these choices, see chapter 1 of Publication 519, U. Federal tax return 1040ez S. Federal tax return 1040ez Tax Guide for Aliens. Federal tax return 1040ez Married persons. Federal tax return 1040ez   Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. Federal tax return 1040ez However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. Federal tax return 1040ez Head of household. Federal tax return 1040ez   You can file as head of household and qualify to take the credit even if your spouse lived with you during the first 6 months of the year if you meet certain tests. Federal tax return 1040ez See Publication 524 and Publication 501. Federal tax return 1040ez Under age 65. Federal tax return 1040ez   If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability and have taxable disability income (discussed later under Disability income ). Federal tax return 1040ez You are considered to be under age 65 at the end of 2013 if you were born after January 1, 1949. Federal tax return 1040ez You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the end of the tax year. Federal tax return 1040ez   Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. Federal tax return 1040ez If you retired on disability before 1977 and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. Federal tax return 1040ez Permanent and total disability. Federal tax return 1040ez   You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. Federal tax return 1040ez A physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Federal tax return 1040ez See Physician's statement , later. Federal tax return 1040ez Substantial gainful activity. Federal tax return 1040ez   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Federal tax return 1040ez   Full-time work (or part-time work done at the employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. Federal tax return 1040ez   Substantial gainful activity is not work you do to take care of yourself or your home. Federal tax return 1040ez It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. Federal tax return 1040ez However, doing this kind of work may show that you are able to engage in substantial gainful activity. Federal tax return 1040ez    Figure 5-B. Federal tax return 1040ez Income Limits IF your filing status is. Federal tax return 1040ez . Federal tax return 1040ez . Federal tax return 1040ez THEN even if you qualify (see Figure 5-A), you CANNOT take the credit if: Your adjusted gross income (AGI)* is equal to or more than. Federal tax return 1040ez . Federal tax return 1040ez . Federal tax return 1040ez OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. Federal tax return 1040ez . Federal tax return 1040ez . Federal tax return 1040ez single, head of household, or qualifying widow(er) with dependent child $17,500 $5,000 married filing jointly and only one spouse qualifies in Figure 5-A $20,000 $5,000 married filing jointly and both spouses qualify in Figure 5-A $25,000 $7,500 married filing separately and you lived apart from your spouse for all of 2013 $12,500 $3,750 *AGI is the amount on Form 1040A, line 22, or Form 1040, line 38      The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. Federal tax return 1040ez Physician's statement. Federal tax return 1040ez   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. Federal tax return 1040ez   You do not have to file this statement with your tax return, but you must keep it for your records. Federal tax return 1040ez The Instructions for Schedule R (Form 1040A or 1040) include a statement your physician can complete and that you can keep for your records. Federal tax return 1040ez Veterans. Federal tax return 1040ez   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. Federal tax return 1040ez VA Form 21-0172 must be signed by a person authorized by the VA to do so. Federal tax return 1040ez You can get this form from your local VA regional office. Federal tax return 1040ez Physician's statement obtained in earlier year. Federal tax return 1040ez   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. Federal tax return 1040ez For a detailed explanation of the conditions you must meet, see the instructions for Schedule R (Form 1040A or 1040), Part II. Federal tax return 1040ez If you meet the required conditions, you must check the box on Schedule R (Form 1040A or 1040), Part II, line 2. Federal tax return 1040ez   If you checked Schedule R (Form 1040A or 1040), Part I, box 4, 5, or 6, print in the space above the box in Part II, line 2, the first name(s) of the spouse(s) for whom the box is checked. Federal tax return 1040ez Disability income. Federal tax return 1040ez   If you are under age 65, you must also have taxable disability income to qualify for the credit. Federal tax return 1040ez   Disability income must meet the following two requirements. Federal tax return 1040ez It must be paid under your employer's accident or health plan or pension plan. Federal tax return 1040ez It must be included in your income as wages (or payments in lieu of wages) for the time you are absent from work because of permanent and total disability. Federal tax return 1040ez Payments that are not disability income. Federal tax return 1040ez   Any payment you receive from a plan that does not provide for disability retirement is not disability income. Federal tax return 1040ez Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. Federal tax return 1040ez   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. Federal tax return 1040ez Mandatory retirement age is the age set by your employer at which you would have had to retire had you not become disabled. Federal tax return 1040ez Figuring the Credit You can figure the credit yourself, or the IRS will figure it for you. Federal tax return 1040ez Figuring the credit yourself. Federal tax return 1040ez   If you figure the credit yourself, fill out the front of Schedule R (Form 1040A or 1040). Federal tax return 1040ez Next, fill out Schedule R (Form 1040A or 1040), Part III. Federal tax return 1040ez Credit figured for you. Federal tax return 1040ez   If you can take the credit and you want the IRS to figure the credit for you, see Publication 524 or the Instructions for Schedule R (Form 1040A or 1040). Federal tax return 1040ez If you want the IRS to figure your tax, see chapter 30 of Publication 17, Your Federal Income Tax. Federal tax return 1040ez Child and Dependent Care Credit You may be able to claim this credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. Federal tax return 1040ez The credit can be up to 35% of your expenses. Federal tax return 1040ez To qualify, you must pay these expenses so you can work or look for work. Federal tax return 1040ez If you claim this credit, you must include on your return the name and taxpayer identification number (generally the social security number) of each qualifying person for whom care is provided. Federal tax return 1040ez If the correct information is not shown, the credit may be reduced or disallowed. Federal tax return 1040ez You also must show on your return the name, address, and the taxpayer identification number of the person(s) or organization(s) that provided the care. Federal tax return 1040ez For more information, see Publication 503, Child and Dependent Care Expenses. Federal tax return 1040ez Earned Income Credit (EIC) The earned income credit (EIC) is a refundable tax credit for certain people who work and have earned income under $51,567. Federal tax return 1040ez The EIC is available to persons with or without a qualifying child. Federal tax return 1040ez Credit has no effect on certain welfare benefits. Federal tax return 1040ez   Any refund you receive because of the EIC cannot be counted as income when determining whether you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. Federal tax return 1040ez These programs include the following. Federal tax return 1040ez Medicaid and supplemental security income (SSI). Federal tax return 1040ez Supplemental Nutrition Assistance Program (food stamps). Federal tax return 1040ez Low-income housing. Federal tax return 1040ez Temporary Assistance for Needy Families (TANF). Federal tax return 1040ez  In addition, when determining eligibility, the refund cannot be counted as a resource for at least 12 months after you receive it. Federal tax return 1040ez Check with your local benefit coordinator to find out if your refund will affect your benefits. Federal tax return 1040ez Do You Qualify for the Earned Income Credit (EIC)? Use Table 5-1 as an initial guide to the rules you must meet in order to qualify for the EIC. Federal tax return 1040ez The specific rules you must meet depend on whether you have a qualifying child. Federal tax return 1040ez If you have a qualifying child, the rules in Parts A, B, and D apply to you. Federal tax return 1040ez If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. Federal tax return 1040ez  If, after reading all the rules in each part that applies to you, you think you may qualify for the credit, see Publication 596, Earned Income Credit, for more details about the EIC. Federal tax return 1040ez You can also find information about the EIC in the instructions for Form 1040 (line 64a), Form 1040A (line 38a), or Form 1040EZ (line 8a). Federal tax return 1040ez The sections that follow provide additional information for some of the rules. Federal tax return 1040ez Adjusted gross income (AGI). Federal tax return 1040ez   Under Rule 1, you cannot claim the EIC unless your AGI is less than the applicable limit shown in Part A of Table 5-1. Federal tax return 1040ez Your AGI is the amount on line 37 (Form 1040), line 21 (Form 1040A), or line 4 (Form 1040EZ). Federal tax return 1040ez Table 5-1. Federal tax return 1040ez Earned Income Credit (EIC) in a Nutshell First, you must meet all the rules in this column. Federal tax return 1040ez Second, you must meet all the rules in one of these columns, whichever applies. Federal tax return 1040ez Third, you must meet the rule in this column. Federal tax return 1040ez Part A. Federal tax return 1040ez  Rules for Everyone Part B. Federal tax return 1040ez  Rules If You Have a Qualifying Child Part C. Federal tax return 1040ez  Rules If You Do Not Have a Qualifying Child Part D. Federal tax return 1040ez  Figuring and Claiming the EIC 1. Federal tax return 1040ez Your adjusted gross income (AGI) must be less than: •$46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, •$43,038 ($48,378 for married filing jointly) if you have two qualifying children, •$37,870 ($43,210 for married filing jointly) if you have one qualifying child, or  •$14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Federal tax return 1040ez 2. Federal tax return 1040ez You must have a valid social security number. Federal tax return 1040ez  3. Federal tax return 1040ez Your filing status cannot be “Married filing separately. Federal tax return 1040ez ” 4. Federal tax return 1040ez You must be a U. Federal tax return 1040ez S. Federal tax return 1040ez citizen or resident alien all year. Federal tax return 1040ez  5. Federal tax return 1040ez You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). Federal tax return 1040ez  6. Federal tax return 1040ez Your investment income must be $3,300 or less. Federal tax return 1040ez  7. Federal tax return 1040ez You must have earned income. Federal tax return 1040ez 8. Federal tax return 1040ez Your child must meet the relationship, age, residency, and joint return tests. Federal tax return 1040ez  9. Federal tax return 1040ez Your qualifying child cannot be used by more than one person to claim the EIC. Federal tax return 1040ez  10. Federal tax return 1040ez You generally cannot be a qualifying child of another person. Federal tax return 1040ez 11. Federal tax return 1040ez You must be at least age 25 but under age 65. Federal tax return 1040ez  12. Federal tax return 1040ez You cannot be the dependent of another person. Federal tax return 1040ez  13. Federal tax return 1040ez You generally cannot be a qualifying child of another person. Federal tax return 1040ez  14. Federal tax return 1040ez You must have lived in the United States more than half of the year. Federal tax return 1040ez 15. Federal tax return 1040ez Your earned income must be less than: •$46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, •$43,038 ($48,378 for married filing jointly) if you have two qualifying children, •$37,870 ($43,210 for married filing jointly) if you have one qualifying child, or •$14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Federal tax return 1040ez Social security number. Federal tax return 1040ez   Under Rule 2, you (and your spouse if you are married filing jointly) must have a valid social security number (SSN) issued by the Social Security Administration (SSA). Federal tax return 1040ez Any qualifying child listed on Schedule EIC also must have a valid SSN. Federal tax return 1040ez (See Qualifying child , later, if you have a qualifying child. Federal tax return 1040ez )   If your social security card (or your spouse's if you are married filing jointly) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Federal tax return 1040ez An example of a federally funded benefit is Medicaid. Federal tax return 1040ez Investment income. Federal tax return 1040ez   Under Rule 6, you cannot claim the EIC unless your investment income is $3,300 or less. Federal tax return 1040ez If your investment income is more than $3,300, you cannot claim the credit. Federal tax return 1040ez For most people, investment income is the total of the following amounts. Federal tax return 1040ez Taxable interest (line 8a of Form 1040 or 1040A). Federal tax return 1040ez Tax-exempt interest (line 8b of Form 1040 or 1040A). Federal tax return 1040ez Dividend income (line 9a of Form 1040 or 1040A). Federal tax return 1040ez Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). Federal tax return 1040ez  If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Federal tax return 1040ez   For more information about investment income, see Publication 596, Earned Income Credit. Federal tax return 1040ez Earned income. Federal tax return 1040ez   Under Rule 7, you must have earned income to claim the EIC. Federal tax return 1040ez Under Rule 15, you cannot claim the EIC unless your earned income is less than the applicable limit shown in Table 5-1, Part D. Federal tax return 1040ez Earned income includes all of the following types of income. Federal tax return 1040ez Wages, salaries, tips, and other taxable employee pay. Federal tax return 1040ez Employee pay is earned income only if it is taxable. Federal tax return 1040ez Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Federal tax return 1040ez But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Federal tax return 1040ez Net earnings from self-employment. Federal tax return 1040ez Gross income received as a statutory employee. Federal tax return 1040ez Gross income defined. Federal tax return 1040ez   Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Federal tax return 1040ez Do not include any social security benefits unless (a) you are married filing a separate tax return and you lived with your spouse at any time in 2013, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). Federal tax return 1040ez If (a) or (b) applies, see the instructions for Form 1040, lines 20a and 20b to figure the taxable part of social security benefits you must include in gross income. Federal tax return 1040ez Self-employed persons. Federal tax return 1040ez   If you are self-employed and your net earnings are $400 or more, be sure to correctly fill out Schedule SE (Form 1040), Self-Employment Tax, and pay the proper amount of self-employment tax. Federal tax return 1040ez If you do not, you may not get all the credit to which you are entitled. Federal tax return 1040ez Disability benefits. Federal tax return 1040ez   If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Federal tax return 1040ez Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Federal tax return 1040ez Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Federal tax return 1040ez   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Federal tax return 1040ez It does not matter whether you have reached minimum retirement age. Federal tax return 1040ez If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code J. Federal tax return 1040ez Income that is not earned income. Federal tax return 1040ez   Examples of items that are not earned income under Rule 7 include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits — except for payments covered under Disability benefits earlier), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Federal tax return 1040ez Do not include any of these items in your earned income. Federal tax return 1040ez Workfare payments. Federal tax return 1040ez   Nontaxable workfare payments are not earned income for the EIC. Federal tax return 1040ez These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector employment is not available, or (2) community service program activities. Federal tax return 1040ez Qualifying child. Federal tax return 1040ez   Under Rule 8, your child is a qualifying child if your child meets four tests. Federal tax return 1040ez The four tests are: Relationship, Age, Residency, and Joint return. Federal tax return 1040ez   The four tests are illustrated in Figure 5-C. Federal tax return 1040ez See Publication 596 for more information about each test. Federal tax return 1040ez Figure 5-C. Federal tax return 1040ez Tests for Qualifying Child A qualifying child for the EIC is a child who is your. Federal tax return 1040ez . Federal tax return 1040ez . Federal tax return 1040ez Son, daughter, stepchild, foster child,  or a descendant of any of them (for example, your grandchild) OR Brother, sister, half brother, half sister, stepbrother,  stepsister, or a descendant of any of them (for example, your  niece or nephew) was . Federal tax return 1040ez . Federal tax return 1040ez . Federal tax return 1040ez Under age 19 at the end of 2013 and younger than you (or your spouse if filing jointly) OR Under age 24 at the end of 2013, a student, and younger than you (or your spouse if filing jointly) OR Permanently and totally disabled at any time during the year, regardless of age who. Federal tax return 1040ez . Federal tax return 1040ez . Federal tax return 1040ez Is not filing a joint return for 2013  (or is filing a joint return for 2013 only as a claim for refund of income tax withheld or estimated tax paid) who. Federal tax return 1040ez . Federal tax return 1040ez . Federal tax return 1040ez Lived with you in the United States for more than half of 2013. Federal tax return 1040ez  If the child did not live with you for the required time, see Publication 596 for more information. Federal tax return 1040ez Figuring the EIC To figure the amount of your credit, you have two choices. Federal tax return 1040ez Have the IRS figure the EIC for you. Federal tax return 1040ez If you want to do this, see IRS Will Figure the EIC for You in Publication 596. Federal tax return 1040ez Figure the EIC yourself. Federal tax return 1040ez If you want to do this, see How To Figure the EIC Yourself in Publication 596. Federal tax return 1040ez Prev  Up  Next   Home   More Online Publications