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Form 1040x Amended Us Individual Income Tax Return

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Form 1040x Amended Us Individual Income Tax Return

Form 1040x amended us individual income tax return 4. Form 1040x amended us individual income tax return   Other Section 501(c) Organizations Table of Contents Introduction 501(c)(4) - Civic Leagues and Social Welfare OrganizationsSpecific Organizations 501(c)(5) - Labor, Agricultural and Horticultural OrganizationsLabor Organizations Agricultural and Horticultural Organizations 501(c)(6) - Business Leagues, etc. Form 1040x amended us individual income tax return Line of business. Form 1040x amended us individual income tax return Examples. Form 1040x amended us individual income tax return Improvement of business conditions. Form 1040x amended us individual income tax return Exception for local legislation. Form 1040x amended us individual income tax return De minimis exception. Form 1040x amended us individual income tax return Grass roots lobbying. Form 1040x amended us individual income tax return 501(c)(7) - Social and Recreation ClubsLimited membership. Form 1040x amended us individual income tax return Support. Form 1040x amended us individual income tax return Facilities open to public. Form 1040x amended us individual income tax return Gross receipts from nonmembership sources. Form 1040x amended us individual income tax return Gross receipts. Form 1040x amended us individual income tax return Nontraditional activities. Form 1040x amended us individual income tax return 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal SocietiesFraternal Beneficiary Societies (501(c)(8)) Domestic Fraternal Societies (501(c)(10)) 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' AssociationsLocal Employees' Associations (501(c)(4)) Voluntary Employees' Beneficiary Associations (501(c)(9)) Supplemental Unemployment Benefit Trusts (501(c)(17)) 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like OrganizationsMembership. Form 1040x amended us individual income tax return Losses and expenses. Form 1040x amended us individual income tax return Distributions of proceeds. Form 1040x amended us individual income tax return The 85% Requirement Local Life Insurance Associations Mutual or Cooperative Associations 501(c)(13) - Cemetery CompaniesBuying cemetery property. Form 1040x amended us individual income tax return Perpetual care organization. Form 1040x amended us individual income tax return Care of individual plots. Form 1040x amended us individual income tax return 501(c)(14) - Credit Unions and Other Mutual Financial OrganizationsState-Chartered Credit Unions Other Mutual Financial Organizations 501(c)(19) - Veterans' Organizations 501(c)(20) - Group Legal Services Plan Organizations 501(c)(21) - Black Lung Benefit TrustsExcise taxes. Form 1040x amended us individual income tax return 501(c)(2) - Title-Holding Corporations for Single Parent CorporationsExpenses. Form 1040x amended us individual income tax return Waiver of payment of income. Form 1040x amended us individual income tax return 501(c)(25) - Title-Holding Corporations or Trusts for Multiple Parent CorporationsUnrelated Business Income 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations 501(c)(29) - CO-OP Health Insurance Issuers New Guidance for IRC 501(c)(29) Qualified Nonprofit Health Insurance Issuers General Requirements for Exemption under 501(c)(29) and Annual Filing Requirement Additional Guidance for Prospective 501(c)(29) Organizations Introduction This chapter contains specific information for certain organizations described in section 501(c), other than those organizations that are described in section 501(c)(3). Form 1040x amended us individual income tax return Section 501(c)(3) organizations are covered in chapter 3 of this publication. Form 1040x amended us individual income tax return The Table of Contents at the beginning of this publication, as well as the Organization Reference Chart, may help you locate at a glance the type of organization discussed in this chapter. Form 1040x amended us individual income tax return 501(c)(4) - Civic Leagues and Social Welfare Organizations If your organization is not organized for profit and will be operated primarily to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). Form 1040x amended us individual income tax return The discussion that follows describes the information you must provide when applying. Form 1040x amended us individual income tax return For application procedures, see chapter 1. Form 1040x amended us individual income tax return To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted primarily to charitable, educational, or recreational purposes. Form 1040x amended us individual income tax return In addition, no part of the organization's net earnings can inure to the benefit of any private shareholder or individual. Form 1040x amended us individual income tax return If the organization provides an excess benefit to certain persons, an excise tax may be imposed. Form 1040x amended us individual income tax return See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax. Form 1040x amended us individual income tax return Examples. Form 1040x amended us individual income tax return   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies. Form 1040x amended us individual income tax return Nonprofit operation. Form 1040x amended us individual income tax return   You must submit evidence that your organization is organized and will be operated on a nonprofit basis. Form 1040x amended us individual income tax return However, such evidence, including the fact that your organization is organized under a state law relating to nonprofit corporations, will not in itself establish a social welfare purpose. Form 1040x amended us individual income tax return Social welfare. Form 1040x amended us individual income tax return   To establish that your organization is organized primarily to promote social welfare, you should submit evidence with your application showing that your organization will operate primarily to further (in some way) the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). Form 1040x amended us individual income tax return   An organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community. Form 1040x amended us individual income tax return It therefore does not qualify as a section 501(c)(4) organization. Form 1040x amended us individual income tax return Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, since its activities benefit the member-tenants and not all tenants in the community. Form 1040x amended us individual income tax return However, an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. Form 1040x amended us individual income tax return Political activity. Form 1040x amended us individual income tax return   Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. Form 1040x amended us individual income tax return However, if you submit proof that your organization is organized primarily to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office. Form 1040x amended us individual income tax return See the discussion in chapter 2 under Political Organization Income Tax Return . Form 1040x amended us individual income tax return Social or recreational activity. Form 1040x amended us individual income tax return   If social activities will be the primary purpose of your organization, you should not file an application for exemption as a social welfare organization but should file for exemption as a social club described in section 501(c)(7). Form 1040x amended us individual income tax return Retirement benefit program. Form 1040x amended us individual income tax return   An organization established by its members that has as its primary activity providing supplemental retirement benefits to its members or death benefits to their beneficiaries does not qualify as an exempt social welfare organization. Form 1040x amended us individual income tax return It may qualify under another paragraph of section 501(c) depending on all the facts. Form 1040x amended us individual income tax return   However, a nonprofit association that is established, maintained, and funded by a local government to provide the only retirement benefits to a class of employees may qualify as a social welfare organization under section 501(c)(4). Form 1040x amended us individual income tax return Tax treatment of donations. Form 1040x amended us individual income tax return   Donations to volunteer fire companies are deductible on the donor's federal income tax return, but only if made for exclusively public purposes. Form 1040x amended us individual income tax return Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. Form 1040x amended us individual income tax return They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business. Form 1040x amended us individual income tax return However, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Form 1040x amended us individual income tax return for more information. Form 1040x amended us individual income tax return For more information on social welfare organizations, see Life Cycle of a Social Welfare Organization at IRS. Form 1040x amended us individual income tax return gov. Form 1040x amended us individual income tax return Specific Organizations The following information should be contained in the application form and accompanying statements of certain types of civic leagues or social welfare organizations. Form 1040x amended us individual income tax return Volunteer fire companies. Form 1040x amended us individual income tax return   If your organization wishes to obtain exemption as a volunteer fire company or similar organization, you should submit evidence that its members are actively engaged in fire fighting and similar disaster assistance, whether it actually owns the fire fighting equipment, and whether it provides any assistance for its members, such as death and medical benefits in case of injury to them. Form 1040x amended us individual income tax return   If your organization does not have an independent social purpose, such as providing recreational facilities for members, it may be exempt under section 501(c)(3). Form 1040x amended us individual income tax return In this event, your organization should file Form 1023. Form 1040x amended us individual income tax return Homeowners' associations. Form 1040x amended us individual income tax return   A membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development should show that it is operated for the benefit of all the residents of the community. Form 1040x amended us individual income tax return The term community generally refers to a geographical unit recognizable as a governmental subdivision, unit, or district thereof. Form 1040x amended us individual income tax return Whether a particular association meets the requirement of benefiting a community depends on the facts and circumstances of each case. Form 1040x amended us individual income tax return Even if an area represented by an association is not a community, the association can still qualify for exemption if its activities benefit a community. Form 1040x amended us individual income tax return   The association should submit evidence that areas such as roadways and park land that it owns and maintains are open to the general public and not just its own members. Form 1040x amended us individual income tax return It also must show that it does not engage in exterior maintenance of private homes. Form 1040x amended us individual income tax return   A homeowners' association that is not exempt under section 501(c)(4) and that is a condominium management association, a residential real estate management association, or a timeshare association generally can elect under the provisions of section 528 to receive certain tax benefits that, in effect, permit it to exclude its exempt function income from its gross income. Form 1040x amended us individual income tax return Other organizations. Form 1040x amended us individual income tax return   Other nonprofit organizations that qualify as social welfare organizations include: An organization operating an airport that is on land owned by a local government, which supervises the airport's operation, and that serves the general public in an area with no other airport, A community association that works to improve public services, housing, and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs, and meetings; and contracts with a private security service to patrol the community, A community association devoted to preserving the community's traditions, architecture, and appearance by representing it before the local legislature and administrative agencies in zoning, traffic, and parking matters, An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area, and An organization that holds an annual festival of regional customs and traditions. Form 1040x amended us individual income tax return 501(c)(5) - Labor, Agricultural and Horticultural Organizations If you are a member of an organization that wants to obtain recognition of exemption from federal income tax as a labor, agricultural, or horticultural organization, you should submit an application on Form 1024. Form 1040x amended us individual income tax return You must indicate in your application for exemption and accompanying statements that no part of the organization's net earnings will inure to the benefit of any member. Form 1040x amended us individual income tax return In addition, you should follow the procedure for obtaining recognition of exempt status described in chapter 1. Form 1040x amended us individual income tax return Submit any additional information that may be required, as described in this section. Form 1040x amended us individual income tax return Tax treatment of donations. Form 1040x amended us individual income tax return   Contributions to labor, agricultural, and horticultural organizations are not deductible as charitable contributions on the donor's federal income tax return. Form 1040x amended us individual income tax return However, such payments may be deductible as business expenses if they are ordinary and necessary in the conduct of the taxpayer's trade or business. Form 1040x amended us individual income tax return For more information about certain limits affecting the deductibility of these business expenses, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Form 1040x amended us individual income tax return Labor Organizations A labor organization is an association of workers who have combined to protect and promote the interests of the members by bargaining collectively with their employers to secure better working conditions. Form 1040x amended us individual income tax return To show that your organization has the purpose of a labor organization, you should include in the articles of organization or accompanying statements (submitted with your exemption application) information establishing that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. Form 1040x amended us individual income tax return In addition, no net earnings of the organization can inure to the benefit of any member. Form 1040x amended us individual income tax return Composition of membership. Form 1040x amended us individual income tax return   While a labor organization generally is composed of employees or representatives of the employees (in the form of collective bargaining agents) and similar employee groups, evidence that an organization's membership consists mainly of workers does not in itself indicate an exempt purpose. Form 1040x amended us individual income tax return You must show in your application that your organization has the purposes described in the preceding paragraph. Form 1040x amended us individual income tax return These purposes can be accomplished by a single labor organization acting alone or by several organizations acting together through a separate organization. Form 1040x amended us individual income tax return Benefits to members. Form 1040x amended us individual income tax return   The payment by a labor organization of death, sick, accident, and similar benefits to its individual members with funds contributed by its members, if made under a plan to better the conditions of the members, does not preclude exemption as a labor organization. Form 1040x amended us individual income tax return However, an organization does not qualify for exemption as a labor organization if it has no authority to represent members in job-related matters, even if it provides weekly income to its members in the event of a lawful strike by the members' union, in return for an annual payment by the member. Form 1040x amended us individual income tax return   For more information on labor organizations, see Life Cycle of a Labor Organization at IRS. Form 1040x amended us individual income tax return gov. Form 1040x amended us individual income tax return Agricultural and Horticultural Organizations Agricultural and horticultural organizations are connected with raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits. Form 1040x amended us individual income tax return For the purpose of these provisions, aquatic resources include only animal or vegetable life, but not mineral resources. Form 1040x amended us individual income tax return The term harvesting, in this case, includes fishing and related pursuits. Form 1040x amended us individual income tax return Agricultural organizations can be quasi-public in character and are often designed to encourage the development of better agricultural and horticultural products through a system of awards, using income from entry fees, gate receipts, and donations to meet the necessary expenses of upkeep and operation. Form 1040x amended us individual income tax return When the activities are directed toward the improvement of marketing or other business conditions in one or more lines of business, rather than the improvement of production techniques or the betterment of the conditions of persons engaged in agriculture, the organization must qualify for exemption as a business league, board of trade, or other organization, as discussed next in the section on 501(c)(6) organizations. Form 1040x amended us individual income tax return The primary purpose of exempt agricultural and horticultural organizations must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. Form 1040x amended us individual income tax return The following list contains some examples of activities that show an agricultural or horticultural purpose. Form 1040x amended us individual income tax return Promoting various cooperative agricultural, horticultural, and civic activities among rural residents by a state, farm, or home bureau. Form 1040x amended us individual income tax return Exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture. Form 1040x amended us individual income tax return Testing soil for members and nonmembers of the farm bureau on a cost basis, the results of the tests and other recommendations being furnished to the community members to educate them in soil treatment. Form 1040x amended us individual income tax return Guarding the purity of a specific breed of livestock. Form 1040x amended us individual income tax return Encouraging improvements in the production of fish on privately owned fish farms. Form 1040x amended us individual income tax return Negotiating with processors for the price to be paid to members for their crops. Form 1040x amended us individual income tax return For more information on agricultural or horticultural organizations, see Life Cycle of an Agricultural or Horticultural Organization at IRS. Form 1040x amended us individual income tax return gov. Form 1040x amended us individual income tax return 501(c)(6) - Business Leagues, etc. Form 1040x amended us individual income tax return If your association wants to apply for recognition of exemption from federal income tax as a nonprofit business league, chamber of commerce, real estate board, or board of trade, it should file Form 1024. Form 1040x amended us individual income tax return For a discussion of the procedure to follow, see chapter 1. Form 1040x amended us individual income tax return Your organization must indicate in its application form and attached statements that no part of its net earnings will inure to the benefit of any private shareholder or individual and that it is not organized for profit or organized to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining). Form 1040x amended us individual income tax return In addition, your organization must be primarily engaged in activities or functions that are the basis for its exemption. Form 1040x amended us individual income tax return It must be primarily supported by membership dues and other income from activities substantially related to its exempt purpose. Form 1040x amended us individual income tax return A business league, in general, is an association of persons having some common business interest, the purpose of which is to promote that common interest and not to engage in a regular business of a kind ordinarily carried on for profit. Form 1040x amended us individual income tax return Trade associations and professional associations are considered business leagues. Form 1040x amended us individual income tax return Chamber of commerce. Form 1040x amended us individual income tax return   A chamber of commerce usually is composed of the merchants and traders of a city. Form 1040x amended us individual income tax return Board of trade. Form 1040x amended us individual income tax return   A board of trade often consists of persons engaged in similar lines of business. Form 1040x amended us individual income tax return For example, a nonprofit organization formed to regulate the sale of a specified agricultural commodity to assure equal treatment of producers, warehouse workers, and buyers is a board of trade. Form 1040x amended us individual income tax return   Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. Form 1040x amended us individual income tax return Real estate board. Form 1040x amended us individual income tax return   A real estate board consists of members interested in improving the business conditions in the real estate field. Form 1040x amended us individual income tax return It is not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. Form 1040x amended us individual income tax return Professional football leagues. Form 1040x amended us individual income tax return   The Internal Revenue Code specifically defines professional football leagues as exempt organizations under section 501(c)(6). Form 1040x amended us individual income tax return They are exempt whether or not they administer a pension fund for football players. Form 1040x amended us individual income tax return General purpose. Form 1040x amended us individual income tax return   You must indicate in the material submitted with your application that your organization will be devoted to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons. Form 1040x amended us individual income tax return It must be shown that the conditions of a particular trade or the interests of the community will be advanced. Form 1040x amended us individual income tax return Merely indicating the name of the organization or the object of the local statute under which it is created is not enough to demonstrate the required general purpose. Form 1040x amended us individual income tax return Line of business. Form 1040x amended us individual income tax return   This term generally refers either to an entire industry or to all components of an industry within a geographic area. Form 1040x amended us individual income tax return It does not include a group composed of businesses that market a particular brand within an industry. Form 1040x amended us individual income tax return Common business interest. Form 1040x amended us individual income tax return   A common business interest of all members of the organization must be established by the application documents. Form 1040x amended us individual income tax return Examples. Form 1040x amended us individual income tax return   Activities that would tend to illustrate a common business interest are: Promotion of higher business standards and better business methods and encouragement of uniformity and cooperation by a retail merchants association, Education of the public in the use of credit, Establishment of uniform casualty rates and compilation of statistical information by an insurance rating bureau operated by casualty insurance companies, Establishment and maintenance of the integrity of a local commercial market, Operation of a trade publication primarily intended to benefit an entire industry, and Encouragement of the use of goods and services of an entire industry (such as a lawyer referral service whose main purpose is to introduce individuals to the use of the legal profession in the hope that they will enter into lawyer-client relationships on a paying basis as a result). Form 1040x amended us individual income tax return Improvement of business conditions. Form 1040x amended us individual income tax return   Generally, this must be shown to be the purpose of the organization. Form 1040x amended us individual income tax return This is not established by evidence of particular services that provide a convenience or economy to individual members in their businesses, such as advertising that carries the name of members, interest-free loans, assigning exclusive franchise areas, operation of a real estate multiple listing system, or operation of a credit reporting agency. Form 1040x amended us individual income tax return Stock or commodity exchange. Form 1040x amended us individual income tax return   A stock or commodity exchange is not a business league, chamber of commerce, real estate board, or board of trade and is not exempt under section 501(c)(6). Form 1040x amended us individual income tax return Legislative activity. Form 1040x amended us individual income tax return   An organization that is exempt under section 501(c)(6) can work for the enactment of laws to advance the common business interests of the organization's members. Form 1040x amended us individual income tax return Deduction not allowed for dues used for political or legislative activities. Form 1040x amended us individual income tax return   A taxpayer cannot deduct the part of dues or other payments to a business league, trade association, labor union, or similar organization that is reported to the taxpayer by the organization as having been used for any of the following activities. Form 1040x amended us individual income tax return Influencing legislation. Form 1040x amended us individual income tax return Participating or intervening in a political campaign for, or against, any candidate for public office. Form 1040x amended us individual income tax return Trying to influence the general public, or part of the general public, with respect to elections, legislative matters, or referendums (also known as grass roots lobbying). Form 1040x amended us individual income tax return Communicating directly with certain executive branch officials to try to influence their official actions or positions. Form 1040x amended us individual income tax return See Dues Used for Lobbying or Political Activities under Required Disclosures in chapter 2 for more information. Form 1040x amended us individual income tax return Exception for local legislation. Form 1040x amended us individual income tax return   Members can deduct dues (or assessments) to an organization that are for expenses of: Appearing before, submitting statements to, or sending communications to members of a local council or similar governing body with respect to legislation or proposed legislation of direct interest to the member, or Communicating information between the member and the organization with respect to local legislation or proposed legislation of direct interest to the organization or the member. Form 1040x amended us individual income tax return Legislation or proposed legislation is of direct interest to a taxpayer if it will, or can reasonably be expected to, affect the taxpayer's trade or business. Form 1040x amended us individual income tax return De minimis exception. Form 1040x amended us individual income tax return   In-house expenditures of $2,000 or less for the year for activities (1) – (4) listed earlier will not prevent a deduction for dues if the dues meet all other tests to be deductible as a business expense. Form 1040x amended us individual income tax return Grass roots lobbying. Form 1040x amended us individual income tax return   A tax-exempt trade association, labor union, or similar organization is considered to be engaging in grass roots lobbying if it contacts prospective members or calls upon its own members to contact their employees and customers for the purpose of urging such persons to communicate with their elected state or Congressional representatives to support the promotion, defeat, or repeal of legislation that is of direct interest to the organization. Form 1040x amended us individual income tax return Any dues or assessments directly related to such activities are not deductible by the taxpayer, since the individuals being contacted, who are not members of the organization, are a segment of the general public. Form 1040x amended us individual income tax return Tax treatment of donations. Form 1040x amended us individual income tax return   Contributions to organizations described in this section are not deductible as charitable contributions on the donor's federal income tax return. Form 1040x amended us individual income tax return They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business. Form 1040x amended us individual income tax return   For more information on business leagues, see Life Cycle of a Business League (Trade Association) on IRS. Form 1040x amended us individual income tax return gov. Form 1040x amended us individual income tax return 501(c)(7) - Social and Recreation Clubs If your club is organized for pleasure, recreation, and other similar nonprofitable purposes and substantially all of its activities are for these purposes, it should file Form 1024 to apply for recognition of exemption from federal income tax. Form 1040x amended us individual income tax return In applying for recognition of exemption, you should submit the information described in this section. Form 1040x amended us individual income tax return Also see chapter 1 for the procedures to follow. Form 1040x amended us individual income tax return Typical organizations that should file for recognition of exemption as social clubs include: College alumni associations that are not described in chapter 3 under Alumni association , College fraternities or sororities operating chapter houses for students, Country clubs, Amateur hunting, fishing, tennis, swimming, and other sport clubs, Dinner clubs that provide a meeting place, library, and dining room for members, Hobby clubs, Garden clubs, and Variety clubs. Form 1040x amended us individual income tax return Discrimination prohibited. Form 1040x amended us individual income tax return   Your organization will not be recognized as tax exempt if its charter, bylaws, or other governing instrument, or any written policy statement provides for discrimination against any person on the basis of race, color, or religion. Form 1040x amended us individual income tax return   However, a club that in good faith limits its membership to the members of a particular religion to further the teachings or principles of that religion and not to exclude individuals of a particular race or color will not be considered as discriminating on the basis of religion. Form 1040x amended us individual income tax return Also, the restriction on religious discrimination does not apply to a club that is an auxiliary of a fraternal beneficiary society (discussed later) if that society is described in section 501(c)(8) and exempt from tax under section 501(a) and limits its membership to the members of a particular religion. Form 1040x amended us individual income tax return Private benefit prohibited. Form 1040x amended us individual income tax return   No part of the organization's net earnings can inure to the benefit of any person having a personal and private interest in the activities of the organization. Form 1040x amended us individual income tax return For purposes of this requirement, it is not necessary that net earnings be actually distributed. Form 1040x amended us individual income tax return Even undistributed earnings can benefit members. Form 1040x amended us individual income tax return Examples of this include a decrease in membership dues or an increase in the services the club provides to its members without a corresponding increase in dues or other fees paid for club support. Form 1040x amended us individual income tax return However, fixed-fee payments to members who bring new members into the club are not an inurement of the club's net earnings, if the payments are reasonable compensation for performance of a necessary administrative service. Form 1040x amended us individual income tax return Purposes. Form 1040x amended us individual income tax return   To show that your organization possesses the characteristics of a club within the meaning of the exemption law, you should submit evidence with your application that personal contact, commingling, and fellowship exist among members. Form 1040x amended us individual income tax return You must show that members are bound together by a common objective of pleasure, recreation, and other nonprofitable purposes. Form 1040x amended us individual income tax return   Fellowship need not be present between each member and every other member of a club if it is a material part in the life of the organization. Form 1040x amended us individual income tax return A statewide or nationwide organization that is made up of individual members, but is divided into local groups, satisfies this requirement if fellowship is a material part of the life of each local group. Form 1040x amended us individual income tax return   The term other nonprofitable purposes means other purposes similar to pleasure and recreation. Form 1040x amended us individual income tax return For example, a club that, in addition to its social activities, has a plan for the payment of sick and death benefits is not operating exclusively for pleasure, recreation, and other nonprofitable purposes. Form 1040x amended us individual income tax return Limited membership. Form 1040x amended us individual income tax return   The membership in a social club must be limited. Form 1040x amended us individual income tax return To show that your organization has a purpose that would characterize it as a club, you should submit evidence with your application that there are limits on admission to membership consistent with the character of the club. Form 1040x amended us individual income tax return   A social club that issues corporate membership is dealing with the general public in the form of the corporation's employees. Form 1040x amended us individual income tax return Corporate members of a club are not the kind of members contemplated by the law. Form 1040x amended us individual income tax return Gross receipts from these members would be a factor in determining whether the club qualifies as a social club. Form 1040x amended us individual income tax return See Gross receipts from nonmembership sources , later. Form 1040x amended us individual income tax return Bona fide individual memberships paid for by a corporation would not have an effect on the gross receipts source. Form 1040x amended us individual income tax return   The fact that a social club may have an associate (nonvoting) class of membership will not be, in and of itself, a cause for nonrecognition of exemption. Form 1040x amended us individual income tax return However, if one membership class pays substantially lower dues and fees than another membership class, although both classes enjoy the same rights and privileges in using the club facilities, there may be an inurement of income to the benefited class, resulting in a denial of the club's exemption. Form 1040x amended us individual income tax return Support. Form 1040x amended us individual income tax return   In general, your club should be supported solely by membership fees, dues, and assessments. Form 1040x amended us individual income tax return However, if otherwise entitled to exemption, your club will not be disqualified because it raises revenue from members through the use of club facilities or in connection with club activities. Form 1040x amended us individual income tax return Business activities. Form 1040x amended us individual income tax return   If your club will engage in business, such as selling real estate, timber, or other products or services, it generally will be denied exemption. Form 1040x amended us individual income tax return However, evidence submitted with your application form that your organization will provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests will not cause denial of exemption. Form 1040x amended us individual income tax return Facilities open to public. Form 1040x amended us individual income tax return   Evidence that your club's facilities will be open to the general public (persons other than members or their dependents or guests) may cause denial of exemption. Form 1040x amended us individual income tax return This does not mean, however, that any dealing with outsiders will automatically deprive a club of exemption. Form 1040x amended us individual income tax return Gross receipts from nonmembership sources. Form 1040x amended us individual income tax return   A section 501(c)(7) organization can receive up to 35% of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. Form 1040x amended us individual income tax return Income from nontraditional business activity with members is not exempt function income, and thus is included as income from sources outside of the membership. Form 1040x amended us individual income tax return Of the 35% gross receipts listed above, up to 15% of the gross receipts can be derived from the use of the club's facilities or services by the general public. Form 1040x amended us individual income tax return If an organization has outside income that is more than these limits, all the facts and circumstances will be taken into account in determining whether the organization qualifies for exempt status. Form 1040x amended us individual income tax return Gross receipts. Form 1040x amended us individual income tax return   Gross receipts, for this purpose, are receipts from the normal and usual (traditionally conducted) activities of the club. Form 1040x amended us individual income tax return These receipts include charges, admissions, membership fees, dues, assessments, investment income, and normal recurring capital gains on investments. Form 1040x amended us individual income tax return Receipts do not include initiation fees and capital contributions. Form 1040x amended us individual income tax return Unusual amounts of income, such as from the sale of a clubhouse or similar facility, are not included in gross receipts or in figuring the percentage limits. Form 1040x amended us individual income tax return Nontraditional activities. Form 1040x amended us individual income tax return   Activities conducted by a social club need to further its exempt purposes. Form 1040x amended us individual income tax return Traditional business activities are those that further a social club's exempt purposes. Form 1040x amended us individual income tax return Nontraditional business activities do not further the exempt purposes of a social club even if conducted solely on a membership basis. Form 1040x amended us individual income tax return Nontraditional business activities are prohibited (subject to an insubstantial, trivial, and nonrecurrent test) for businesses conducted with both members and nonmembers. Form 1040x amended us individual income tax return Examples of nontraditional business activities include sale of package liquor, take-out food, and long-term room rental. Form 1040x amended us individual income tax return Fraternity foundations. Form 1040x amended us individual income tax return   If your organization is a foundation formed for the exclusive purpose of acquiring and leasing a chapter house to a local fraternity chapter or sorority chapter maintained at an educational institution and does not engage in any social or recreational activities, it may be a title holding corporation (discussed later under section 501(c)(2) organizations and under section 501(c)(25) organizations) rather than a social club. Form 1040x amended us individual income tax return Tax treatment of donations. Form 1040x amended us individual income tax return   Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor's federal income tax return. Form 1040x amended us individual income tax return 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies This section describes the information to be provided upon application for recognition of exemption by two types of fraternal societies: beneficiary and domestic. Form 1040x amended us individual income tax return The major distinction is that fraternal beneficiary societies provide for the payment of life, sick, accident, or other benefits to their members or their dependents, while domestic fraternal societies do not provide these benefits but rather devote their earnings to fraternal, religious, charitable, etc. Form 1040x amended us individual income tax return , purposes. Form 1040x amended us individual income tax return The procedures to follow in applying for recognition of exemption are described in chapter 1. Form 1040x amended us individual income tax return If your organization is controlled by a central organization, you should check with your controlling organization to determine whether your unit has been included in a group exemption letter or can be added. Form 1040x amended us individual income tax return If so, your organization need not apply for individual recognition of exemption. Form 1040x amended us individual income tax return For more information, see Group Exemption Letter in chapter 1 of this publication. Form 1040x amended us individual income tax return Tax treatment of donations. Form 1040x amended us individual income tax return   Donations by an individual to a domestic fraternal beneficiary society or a domestic fraternal society operating under the lodge system are deductible as charitable contributions only if used exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. Form 1040x amended us individual income tax return Fraternal Beneficiary Societies (501(c)(8)) A fraternal beneficiary society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Form 1040x amended us individual income tax return The application and accompanying statements should establish that the organization: Is a fraternal organization, Operates under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system, and Provides for the payment of life, sick, accident, or other benefits to the members of the society, order, or association or their dependents. Form 1040x amended us individual income tax return Lodge system. Form 1040x amended us individual income tax return   Operating under the lodge system means carrying on activities under a form of organization that comprises local branches, chartered by a parent organization and largely self-governing, called lodges, chapters, or the like. Form 1040x amended us individual income tax return Payment of benefits. Form 1040x amended us individual income tax return   It is not essential that every member be covered by the society's program of sick, accident, or death benefits. Form 1040x amended us individual income tax return An organization can qualify for exemption if most of its members are eligible for benefits, and the benefits are paid from contributions or dues paid by those members. Form 1040x amended us individual income tax return   The benefits must be limited to members and their dependents. Form 1040x amended us individual income tax return If members will have the ability to confer benefits to other than themselves and their dependents, exemption will not be recognized. Form 1040x amended us individual income tax return Whole-life insurance. Form 1040x amended us individual income tax return   Whole-life insurance constitutes a life benefit under section 501(c)(8) even though the policy may contain investment features such as a cash surrender value or a policy loan. Form 1040x amended us individual income tax return Reinsurance pool. Form 1040x amended us individual income tax return   Payments by a fraternal beneficiary society into a state-sponsored reinsurance pool that protects participating insurers against excessive losses on major medical health and accident insurance will not preclude exemption as a fraternal beneficiary society. Form 1040x amended us individual income tax return Domestic Fraternal Societies (501(c)(10)) A domestic fraternal society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Form 1040x amended us individual income tax return The application and accompanying statements should establish that the organization: Is a domestic fraternal organization organized in the U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return , Operates under the lodge system, Devotes its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes, and Does not provide for the payment of life, sick, accident, or other benefits to its members. Form 1040x amended us individual income tax return The organization can arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status. Form 1040x amended us individual income tax return 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' Associations This section describes the information to be provided upon application for recognition of exemption by the following types of employees' associations: A voluntary employees' beneficiary association (including federal employees' associations) organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries, if no part of the net earnings of the association inures to the benefit of any private shareholder or individual, and A supplemental unemployment benefit trust whose primary purpose is providing for payment of supplemental unemployment benefits. Form 1040x amended us individual income tax return Both the application form to file and the information to provide are discussed later under the section that describes your employee association. Form 1040x amended us individual income tax return Chapter 1 describes the procedures to follow in applying for exemption. Form 1040x amended us individual income tax return Tax treatment of donations. Form 1040x amended us individual income tax return   Donations to these organizations are not deductible as charitable contributions on the donor's federal income tax return. Form 1040x amended us individual income tax return Local Employees' Associations (501(c)(4)) A local association of employees whose membership is limited to employees of a designated person or persons in a particular municipality, and whose income will be devoted exclusively to charitable, educational, or recreational purposes. Form 1040x amended us individual income tax return A local employees' association must apply for recognition of exemption by filing Form 1024. Form 1040x amended us individual income tax return The organization must submit evidence that: It is of a purely local character, Its membership is limited to employees of a designated person or persons in a particular locality, and Its net earnings will be devoted exclusively to charitable, educational, or recreational purposes. Form 1040x amended us individual income tax return A local association of employees that has established a system of paying retirement or death benefits, or both, to its members will not qualify for exemption since the payment of these benefits is not considered as being for charitable, educational, or recreational purposes. Form 1040x amended us individual income tax return Similarly, a local association of employees that is operated primarily as a cooperative buying service for its members in order to obtain discount prices on merchandise, services, and activities does not qualify for exemption. Form 1040x amended us individual income tax return Voluntary Employees' Beneficiary Associations (501(c)(9)) An application for recognition of exemption as a voluntary employees' beneficiary association must be filed on Form 1024. Form 1040x amended us individual income tax return The material submitted with the application must show that your organization: Is a voluntary association of employees, Will provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose, and Will not allow any of its net earnings to inure to the benefit of any private individual or shareholder except in the form of scheduled benefit payments. Form 1040x amended us individual income tax return To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Form 1040x amended us individual income tax return Note. Form 1040x amended us individual income tax return Under section 4976, the reversion of funds from a section 501(c)(9) organization to the employer who created the beneficiary association may subject the employer to a 100% penalty excise tax on the amount of the reversion. Form 1040x amended us individual income tax return Notice requirement. Form 1040x amended us individual income tax return   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Form 1040x amended us individual income tax return The organization gives notice by filing Form 1024. Form 1040x amended us individual income tax return If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before notice is given. Form 1040x amended us individual income tax return An extension of time for filing the notice can be granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Form 1040x amended us individual income tax return Membership. Form 1040x amended us individual income tax return   Membership of a section 501(c)(9) organization must consist of individuals who are employees and have an employment-related common bond. Form 1040x amended us individual income tax return This common bond can be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. Form 1040x amended us individual income tax return   The membership of an association can include some individuals who are not employees, provided they have an employment-related bond with the employee-members. Form 1040x amended us individual income tax return For example, the owner of a business whose employees are members of the association can be a member. Form 1040x amended us individual income tax return An association will be considered composed of employees if 90% of its total membership on one day of each quarter of its tax year consists of employees. Form 1040x amended us individual income tax return Employees. Form 1040x amended us individual income tax return   Employees include individuals who became entitled to membership because they are or were employees. Form 1040x amended us individual income tax return For example, an individual will qualify as an employee even though the individual is on a leave of absence or has been terminated due to retirement, disability, or layoff. Form 1040x amended us individual income tax return   Generally, membership is voluntary if an affirmative act is required on the part of an employee to become a member. Form 1040x amended us individual income tax return Conversely, membership is involuntary if the designation as a member is due to employee status. Form 1040x amended us individual income tax return However, an association will be considered voluntary if employees are required to be members of the organization as a condition of their employment and they do not incur a detriment (such as a payroll deduction) as a result of their membership. Form 1040x amended us individual income tax return An employer has not imposed involuntary membership on the employee if membership is required as the result of a collective bargaining agreement or as an incident of membership in a labor organization. Form 1040x amended us individual income tax return Payment of benefits. Form 1040x amended us individual income tax return   The information submitted with your application must show that your organization will pay life, sick, accident, supplemental unemployment, or other similar benefits. Form 1040x amended us individual income tax return The benefits can be provided directly by your association or indirectly by your association through the payments of premiums to an insurance company (or fees to a medical clinic). Form 1040x amended us individual income tax return Benefits can be in the form of medical, clinical, or hospital services, transportation furnished for medical care, or money payments. Form 1040x amended us individual income tax return Nondiscrimination requirements. Form 1040x amended us individual income tax return   An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. Form 1040x amended us individual income tax return However, if the organization is part of a plan that is a collective bargaining agreement that was the subject of good faith bargaining between employee organizations and employers, the plan need not meet these requirements for the organization to qualify as tax exempt. Form 1040x amended us individual income tax return   A plan meets the nondiscrimination requirements only if both of the following statements are true. Form 1040x amended us individual income tax return Each class of benefits under the plan is provided under a classification of employees that is set forth in the plan and does not discriminate in favor of employees who are highly compensated individuals. Form 1040x amended us individual income tax return The benefits provided under each class of benefits do not discriminate in favor of highly compensated individuals. Form 1040x amended us individual income tax return A life insurance, disability, severance pay, or supplemental unemployment compensation benefit does not discriminate in favor of highly compensated individuals merely because the benefits available bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of employees covered by the plan. Form 1040x amended us individual income tax return   For purposes of determining whether a plan meets the nondiscrimination requirements, the employer can elect to exclude all disability or severance payments payable to individuals who are in pay status as of January 1, 1985. Form 1040x amended us individual income tax return This will not apply to any increase in such payment by any plan amendment adopted after June 22, 1984. Form 1040x amended us individual income tax return   If a plan provides a benefit for which there is a nondiscrimination provision provided under Chapter 1 of the Internal Revenue Code as a condition of that benefit being excluded from gross income, these nondiscrimination requirements do not apply. Form 1040x amended us individual income tax return The benefit will be considered nondiscriminatory only if it meets the nondiscrimination provision of the applicable Code section. Form 1040x amended us individual income tax return For example, benefits provided under a medical reimbursement plan would meet the nondiscrimination requirements for an association, if the benefits meet the nondiscrimination requirements of section 105(h)(3) and 105(h)(4). Form 1040x amended us individual income tax return Excluded employees. Form 1040x amended us individual income tax return   Certain employees who are not covered by a plan can be excluded from consideration in applying these requirements. Form 1040x amended us individual income tax return These include employees: Who have not completed 3 years of service, Who have not attained age 21, Who are seasonal or less than half-time employees, Who are not in the plan and who are included in a unit of employees covered by a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining, or Who are nonresident aliens and who receive no earned income from the employer that has United States source income. Form 1040x amended us individual income tax return Highly compensated individual. Form 1040x amended us individual income tax return   A highly compensated individual is one who: Owned 5 percent or more of the employer at any time during the current year or the preceding year, Received more than $115,000 in compensation from the employer for the preceding year (the amount is annualized for inflation. Form 1040x amended us individual income tax return Go to IRS. Form 1040x amended us individual income tax return gov, and search “Pension Plan Limitation” for the year), and Was among the top 20% of employees by compensation for the preceding year. Form 1040x amended us individual income tax return However, the employer can choose not to have (3) apply. Form 1040x amended us individual income tax return Aggregation rules. Form 1040x amended us individual income tax return   The employer can choose to treat two or more plans as one plan for purposes of meeting the nondiscrimination requirements. Form 1040x amended us individual income tax return Employees of controlled groups of corporations, trades, or businesses under common control, or members of an affiliated service group, are treated as employees of a single employer. Form 1040x amended us individual income tax return Leased employees are treated as employees of the recipient. Form 1040x amended us individual income tax return One employee. Form 1040x amended us individual income tax return   A trust created to provide benefits to one employee will not qualify as a voluntary employees' beneficiary association under section 501(c)(9). Form 1040x amended us individual income tax return Supplemental Unemployment Benefit Trusts (501(c)(17)) A trust or trusts forming part of a written plan (established and maintained by an employer, his or her employees, or both) providing solely for the payment of supplemental unemployment compensation benefits must file the application for recognition of exemption on Form 1024. Form 1040x amended us individual income tax return The trust must be a valid, existing trust under local law and must be evidenced by an executed document. Form 1040x amended us individual income tax return A conformed copy of the plan of which the trust is a part should be attached to the application. Form 1040x amended us individual income tax return To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Form 1040x amended us individual income tax return Note. Form 1040x amended us individual income tax return Under section 4976, the reversion of funds from a section 501(c)(17) organization to the employer who created the supplemental unemployment benefit trust may subject the employer to a 100% penalty excise tax on the amount of the reversion. Form 1040x amended us individual income tax return Notice requirement. Form 1040x amended us individual income tax return   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Form 1040x amended us individual income tax return The organization gives notice by filing Form 1024. Form 1040x amended us individual income tax return If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before such notice is given. Form 1040x amended us individual income tax return An extension of time for filing the notice is granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Form 1040x amended us individual income tax return Types of payments. Form 1040x amended us individual income tax return   You must show that the supplemental unemployment compensation benefits will be benefits paid to an employee because of the employee's involuntary separation from employment (whether or not the separation is temporary) resulting directly from a reduction-in-force, discontinuance of a plant or operation, or other similar conditions. Form 1040x amended us individual income tax return In addition, sickness and accident benefits (but not vacation, retirement, or death benefits) may be included in the plan if these are subordinate to the unemployment compensation benefits. Form 1040x amended us individual income tax return Diversion of funds. Form 1040x amended us individual income tax return   It must be impossible under the plan (at any time before the satisfaction of all liabilities with respect to employees under the plan) to use or to divert any of the corpus or income of the trust to any purpose other than the payment of supplemental unemployment compensation benefits (or sickness or accident benefits to the extent just explained). Form 1040x amended us individual income tax return Discrimination in benefits. Form 1040x amended us individual income tax return   Neither the terms of the plan nor the actual payment of benefits can be discriminatory in favor of the company's officers, stockholders, supervisors, or highly paid employees. Form 1040x amended us individual income tax return However, a plan is not discriminatory merely because benefits bear a uniform relationship to compensation or the rate of compensation. Form 1040x amended us individual income tax return Prohibited transactions and exemption. Form 1040x amended us individual income tax return   If your organization is a supplemental unemployment benefit trust and has received a denial of exemption because it engaged in a prohibited transaction, as defined by section 503(b), it can file a claim for exemption in any tax year following the tax year in which the notice of denial was issued. Form 1040x amended us individual income tax return It must file the claim on Form 1024. Form 1040x amended us individual income tax return The organization must include a written declaration that it will not knowingly again engage in a prohibited transaction. Form 1040x amended us individual income tax return An authorized principal officer of your organization must make this declaration under the penalties of perjury. Form 1040x amended us individual income tax return   If your organization has satisfied all requirements as a supplemental unemployment benefit trust described in section 501(c)(17), it will be notified in writing that it has been recognized as exempt. Form 1040x amended us individual income tax return However, the organization will be exempt only for those tax years after the tax year in which the claim for exemption (Form 1024) is filed. Form 1040x amended us individual income tax return Tax year in this case means the established annual accounting period of the organization or, if the organization has not established an annual accounting period, the calendar year. Form 1040x amended us individual income tax return For more information about the requirements for reestablishing an exemption previously denied, contact the IRS. Form 1040x amended us individual income tax return 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like Organizations Each of the following organizations apply for recognition of exemption from federal income tax by filing Form 1024. Form 1040x amended us individual income tax return Benevolent life insurance associations of a purely local character and like organizations. Form 1040x amended us individual income tax return Mutual ditch or irrigation companies and like organizations. Form 1040x amended us individual income tax return Mutual or cooperative telephone companies and like organizations. Form 1040x amended us individual income tax return A like organization is an organization that performs a service comparable to that performed by any one of the above organizations. Form 1040x amended us individual income tax return The information to be provided upon application by each of these organizations is described in this section. Form 1040x amended us individual income tax return For information as to the procedures to follow in applying for exemption, see chapter 1. Form 1040x amended us individual income tax return General requirements. Form 1040x amended us individual income tax return   These organizations must use their income solely to cover losses and expenses, with any excess being returned to members or retained to cover future losses and expenses. Form 1040x amended us individual income tax return They must collect at least 85% of their income from members for the sole purpose of meeting losses and expenses. Form 1040x amended us individual income tax return Mutual character. Form 1040x amended us individual income tax return   These organizations, other than benevolent life insurance associations, must be organized and operated on a mutual or cooperative basis. Form 1040x amended us individual income tax return They are associations of persons or organizations, or both, banded together to provide themselves a mutually desirable service approximately at cost and on a mutual basis. Form 1040x amended us individual income tax return To maintain the mutual characteristic of democratic ownership and control, they must be so organized and operated that their members have the right to choose the management, to receive services at cost, to receive a return of any excess of payments over losses and expenses, and to share in any assets upon dissolution. Form 1040x amended us individual income tax return   The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. Form 1040x amended us individual income tax return Upon dissolution, gains from the sale of appreciated assets must be distributed to all persons who were members during the period the assets were owned by the organization in proportion to the amount of business done during that period. Form 1040x amended us individual income tax return The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. Form 1040x amended us individual income tax return Membership. Form 1040x amended us individual income tax return   Membership of a mutual organization consists of those who join the organization to obtain its services, and have a voice in its management. Form 1040x amended us individual income tax return In a stock company, the stockholders are members. Form 1040x amended us individual income tax return However, a mutual life insurance organization cannot have policyholders other than its members. Form 1040x amended us individual income tax return Losses and expenses. Form 1040x amended us individual income tax return   In furnishing services substantially at cost, an organization must use its income solely for paying losses and expenses. Form 1040x amended us individual income tax return Any excess income not retained in reasonable reserves for future losses and expenses belongs to members in proportion to their patronage or business done with the organization. Form 1040x amended us individual income tax return If such patronage refunds are retained in reasonable amounts for purposes of expanding and improving facilities, retiring capital indebtedness, acquiring other assets, and unexpected expenses, the organization must maintain records sufficient to reflect the equity of each member in the assets acquired with the funds. Form 1040x amended us individual income tax return Distributions of proceeds. Form 1040x amended us individual income tax return   The cooperative may distribute the unexpended balance of collections or assessments remaining on hand at the end of the year to members or patrons prorated on the basis of their patronage or business done with the cooperative. Form 1040x amended us individual income tax return Such distribution represents a refund in the costs of services rendered to the member. Form 1040x amended us individual income tax return The 85% Requirement All of the organizations listed above must submit evidence with their application that they receive 85% or more of their gross income from their members for the sole purpose of meeting losses and expenses. Form 1040x amended us individual income tax return Nevertheless, certain items of income are excluded from the computation of the 85% requirement if the organization is a mutual or cooperative telephone or electric company. Form 1040x amended us individual income tax return Mutual or cooperative telephone company. Form 1040x amended us individual income tax return   A mutual or cooperative telephone company will exclude from the computation of the 85% requirement any income received or accrued from: A nonmember telephone company for the performance of communication services involving the completion of long distance calls to, from, or between members of the mutual or cooperative telephone company, Qualified pole rentals, The sale of display listings in a directory furnished to its members, or The prepayment of a loan created in 1987, 1988, or 1989, under section 306A, 306B, or 311 of the Rural Electrification Act of 1936. Form 1040x amended us individual income tax return Mutual or cooperative electric company. Form 1040x amended us individual income tax return   A mutual or cooperative electric company will exclude from the computation of the 85% requirement any income received or accrued from: Qualified pole rentals, Any provision or sale of electric energy transmission services or ancillary service if the services are provided on a nondiscriminatory open access basis under an open access transmission tariff approved or accepted by the Federal Energy Regulatory Commission (FERC) or under an independent transmission provider agreement approved or accepted by FERC (other than income received or accrued directly or indirectly from a member), The provision or sale of electric energy distribution services or ancillary services if the services are provided on a nondiscriminatory open-access basis to distribute electric energy not owned by the mutual or electric cooperative company: To end-users who are served by distribution facilities not owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), or Generated by a generation facility not owned or leased by the company or any of its members and which is directly connected to distribution facilities owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), Any nuclear decommissioning transaction, or Any asset exchange or conversion transaction. Form 1040x amended us individual income tax return   An electric cooperative's sale of excess fuel at cost in the year of purchase is not income for purposes of determining compliance with the 85% requirement. Form 1040x amended us individual income tax return Qualified pole rental. Form 1040x amended us individual income tax return   The term qualified pole rental means any rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that are used by the company in providing telephone or electric services to its members, and Pursuant to the rental to support one or more wires (in addition to wires described in (1)) for use in connection with the transmission by wire of electricity or of telephone or other communications. Form 1040x amended us individual income tax return   The term rental, for this purpose, includes any sale of the right to use the pole (or other structure). Form 1040x amended us individual income tax return The 85% requirement is applied on the basis of an annual accounting period. Form 1040x amended us individual income tax return Failure of an organization to meet the requirement in a particular year precludes exemption for that year, but has no effect upon exemption for years in which the 85% requirement is met. Form 1040x amended us individual income tax return Gain from the sale or conversion of the organization's property is not considered an amount received from members in determining whether the organization's income consists of amounts collected from members. Form 1040x amended us individual income tax return Because the 85% income test is based on gross income, capital losses cannot be used to reduce capital gains for purposes of this test. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return   The books of an organization reflect the following for the calendar year. Form 1040x amended us individual income tax return Collections from members $2,400 Short-term capital gains 600 Short-term capital losses 400 Other income None Gross income ($2,400 + $600 =$3000) 100% Collected from members ($2,400) 80%   Since amounts collected from members do not constitute at least 85% of gross income, the organization is not entitled to exemption from federal income tax for the year. Form 1040x amended us individual income tax return   Voluntary contributions in the nature of gifts are not taken into account for purposes of the 85% computation. Form 1040x amended us individual income tax return   Other tax-exempt income besides gifts is considered as income received from other than members in applying the 85% test. Form 1040x amended us individual income tax return   If the 85% test is not met, your organization, if classifiable under this section, will not qualify for exemption as any other type of organization described in this publication. Form 1040x amended us individual income tax return Tax treatment of donations. Form 1040x amended us individual income tax return   Donations to an organization described in this section are not deductible as charitable contributions on the donor's federal income tax return. Form 1040x amended us individual income tax return Local Life Insurance Associations A benevolent life insurance association or an organization seeking recognition of exemption on grounds of similarity to a benevolent life insurance association must submit evidence upon applying for recognition of exemption that it will be of a purely local character, that its excess funds will be refunded to members or retained in reasonable reserves to meet future losses and expenses, and that it meets the 85% income requirement. Form 1040x amended us individual income tax return If an organization issues policies for stipulated cash premiums, or if it requires advance deposits to cover the cost of the insurance and maintains investments from which more than 15% of its income is derived, it will not be entitled to exemption. Form 1040x amended us individual income tax return To establish that your organization is of a purely local character, it should show that its activities will be confined to a particular community, place, or district irrespective of political subdivisions. Form 1040x amended us individual income tax return If the activities of an organization are limited only by the borders of a state, it cannot be purely local in character. Form 1040x amended us individual income tax return A benevolent life insurance association that does not terminate membership when a member moves from the local area in which the association operates will qualify for exemption if it meets the other requirements. Form 1040x amended us individual income tax return A copy of each type of policy issued by your organization should be included with the application for recognition of exemption. Form 1040x amended us individual income tax return Organizations similar to local benevolent life insurance companies. Form 1040x amended us individual income tax return   These organizations include those that in addition to paying death benefits also provide for the payment of sick, accident, or health benefits. Form 1040x amended us individual income tax return However, an organization that pays only sick, accident, or health benefits, but not life insurance benefits, is not an organization similar to a benevolent life insurance association and should not apply for recognition of exemption as described in this section. Form 1040x amended us individual income tax return Burial and funeral benefit insurance organization. Form 1040x amended us individual income tax return   This type of organization can apply for recognition of exemption as an organization similar to a benevolent life insurance company if it establishes that the benefits are paid in cash and if it is not engaged directly in the manufacture of funeral supplies or the performance of funeral services. Form 1040x amended us individual income tax return An organization that provides its benefits in the form of supplies and service is not a life insurance company. Form 1040x amended us individual income tax return Such an organization can seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life. Form 1040x amended us individual income tax return Mutual or Cooperative Associations Mutual ditch or irrigation companies, mutual or cooperative telephone companies, and like organizations need not establish that they are of a purely local character. Form 1040x amended us individual income tax return They can serve noncontiguous areas. Form 1040x amended us individual income tax return Like organization. Form 1040x amended us individual income tax return   A like organization is a cooperative or mutual organization that performs a service similar to mutual ditch, irrigation, telephone, or electric companies. Form 1040x amended us individual income tax return Examples include the following: cooperatives that provide protection of river banks to prevent erosion, water and sewer services, cable television, satellite, television, cellular phone services, two-way radio service, or natural gas services. Form 1040x amended us individual income tax return 501(c)(13) - Cemetery Companies If your organization wishes to obtain recognition of exemption from federal income tax as a cemetery company or a corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, it must file an application on Form 1024. Form 1040x amended us individual income tax return For the procedure to follow to file an application, see Application, Approval, and Appeal Procedures in chapter 1. Form 1040x amended us individual income tax return A nonprofit mutual cemetery company that seeks recognition of exemption should submit evidence with its application that it is owned and operated exclusively for the benefit of its lot owners who hold lots for bona fide burial purposes and not for purposes of resale. Form 1040x amended us individual income tax return A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. Form 1040x amended us individual income tax return The fact that a mutual cemetery company limits its membership to a particular class of individuals, such as members of a family, will not affect its status as mutual so long as all the other requirements of section 501(c)(13) are met. Form 1040x amended us individual income tax return If your organization is a nonprofit corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, you should show that it is not permitted by its charter to engage in any business not necessarily incident to that purpose. Form 1040x amended us individual income tax return Operating a mortuary is not permitted. Form 1040x amended us individual income tax return However, selling monuments, markers, vaults, and flowers solely for use in the cemetery is permitted if the profits from these sales are used to maintain the cemetery as a whole. Form 1040x amended us individual income tax return How income can be used. Form 1040x amended us individual income tax return   You should show that your organization's earnings are or will be used only in one or more of the following ways. Form 1040x amended us individual income tax return To pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium. Form 1040x amended us individual income tax return To buy cemetery property. Form 1040x amended us individual income tax return To create a fund that will provide a source of income for the perpetual care of the cemetery or a reasonable reserve for any ordinary or necessary purpose. Form 1040x amended us individual income tax return No part of the net earnings of your organization can inure to the benefit of any private shareholder or individual. Form 1040x amended us individual income tax return Ordinary and necessary expenses in connection with the operation, management, maintenance, and improvement of the cemetery are permitted, as are reasonable fees for the services of a manager. Form 1040x amended us individual income tax return Buying cemetery property. Form 1040x amended us individual income tax return   Payments can be made to amortize debt incurred to buy land, but cannot be in the nature of profit distributions. Form 1040x amended us individual income tax return You must show the method used to finance the purchase of the cemetery property and that the purchase price of the land at the time of its sale to the cemetery was not unreasonable. Form 1040x amended us individual income tax return   Except for holders of preferred stock (discussed later), no person can have any interest in the net earnings of a tax-exempt cemetery company or crematorium. Form 1040x amended us individual income tax return Therefore, if property is transferred to the organization in exchange for an interest in the organization's net earnings, the organization will not
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SOI Tax Stats - What's New

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Recent Updates

Exempt Organizations Financial Data—2013 data on tax-exempt organizations were published on Tax Stats. These data include selected financial items from more than 600,000 Forms 990, 990-EZ and 990-PF filed by tax-exempt organizations and processed by the IRS during calendar year 2013. The latest release was expanded to include nearly 500 financial and other data items. The data are in ASCII space-delimited format, and supporting documentation is available.

2013 IRS Data BookThe Internal Revenue Service (IRS) has released the 2013 IRS Data Book, a snapshot of agency activities for Fiscal Year 2013—Oct. 1, 2012, to Sept. 30, 2013. In addition to information on taxes collected and returns processed, the report also includes information about enforcement, taxpayer assistance, and the IRS budget and workforce, among others.

2014 Winter SOI Bulletin—Statistics of Income (SOI) has released the 2014 Winter SOI Bulletin. Articles included in the publication provide the most recent data available from various tax and information returns filed by U.S. taxpayers.

This issue of the SOI Bulletin includes articles on the following topics:

  • Individual Income Tax Returns, Preliminary Data, 2012
  • Sales of Capital Assets Panel Data Reported on Individual Tax Returns, 2004–2007
  • Split-Interest Trusts, Filing Year 2012
  • Nonprofit Charitable Organizations, 2010

(March 2014)

Corporation Foreign Tax Credit, 2010Two new tables presenting data from Form 1118, Foreign Tax Credit—Corporations, are now available on SOI’s Tax Stats Webpage. The tables present data from the population of returns filed for Tax Year 2010. Table 1.1 displays data on returns with income in an excess credit position while table 1.2 shows data on returns in an excess limit position. Data presented includes foreign-source income, deductions, and taxes by major and selected minor industry. (February, 2014)

Exempt Organizations Microdata Files, Tax Years 1985–1997—Historical microdata files based on Forms 990 and Forms 990-EZ sampled for the annual studies of nonprofit charitable and other tax-exempt organizations are now available. Annual data are available for organizations exempt from income tax under Internal Revenue Code Section 501(c)(3). Additional data for tax-exempt organizations under IRC Sections 501(c)(4) through 501(c)(9) are available for limited tax years. (February, 2014)

2011 Individual Income Tax ZIP Code and County DataUnited States’ ZIP Code and county data for Tax Year 2011 are now available on Tax Stats. The data present selected income and tax return items by State, ZIP Code, county, and size of adjusted gross income. These data are based on individual income tax returns filed with the IRS. (February, 2014)

Fiduciary Income Tax, 2012—Three tables presenting Filing Year 2012 data for income from estates and trusts (Form 1041) are now available. The statistics cover sources of income and deductions at the National and State levels. Data are classified by trust type and filing status. (February, 2014)

U.S. Gift Tax Returns table Gift Tax, 2012 - One table presenting Filing Year 2012 data for United States Gift (and Generation-Skipping Transfer) Tax Returns (Form 709), including information on total gifts, deductions, credits, and net tax amounts, is now available. Data are presented by tax status and size of total taxable gifts. (January 2014)

2013 Fall SOI Bulletin—Statistics of Income (SOI) has released the 2013 Fall SOI Bulletin. Articles included in the publication provide the most recent data available from various tax and information returns filed by U.S. taxpayers.

This issue of the SOI Bulletin includes articles on the following topics:

  • Individual Income Tax Returns, 2011
  • Partnership Returns, 2011
  • Accumulation and Distribution of Individual Retirement Arrangements, 2010

(January 2014)

The Statistics of Income Tax Stats Table Wizard was recently updated! The Table Wizard allows users to query tax data on corporations, individuals, tax-exempt organizations, estates, gifts trusts, and more. The resulting data can then be downloaded. This update includes the following data:

  • Corporate data by industry (Forms 1120 and 1120s)—2004 through 2010
  • 501c(3)  Exempt Organizations (Form 990)—2004 through 2007
  • Domestic Private Foundations and Charitable Trusts (Form 990-PF)—2004 through 2008
  • Unrelated Business Income Tax Returns (Form 990-T)—2006 through 2008
  • Estate Tax Returns (Form 706)—2007 through 2010
  • Gift Tax Returns (Form 709)—2005 through 2010

(December 2013)

2011 Individual Income Tax Estimated Data Line CountsThe 2011 Statistics of Income (SOI) estimated data line counts publication presents estimates of frequencies of taxpayer entries on the lines of the forms and schedules filed with individual tax returns as shown on the 2011 Individual SOI Complete Report file. The statistics are based on a sample of returns that have been weighted to estimate the entire 2011 Tax Year population. The publication includes corresponding dollar amounts of selected lines filed in concurrence with the number of returns filed. (December 2013)

Tax Year 2001–2011 Individual Income Tax Return Statistics by Selected Descending and Ascending Cumulative PercentilesStatistics based on all individual income tax returns by selected descending and ascending cumulative percentiles are now available for Tax Years 2001–2011. Tables present historical statistics on income and tax by cumulative percentiles based on the number of returns. They also show distributions of adjusted gross income (AGI) and total income tax, as defined for each tax year, by descending and ascending cumulative percentiles of returns in both current and constant dollars. These tables can be used to make comparisons across cumulative percentile classes beginning with Tax Year 2001. This release is based on all individual income tax returns except returns of dependents. (December 2013)

2011 Partnership Returns Line Item Estimates (Publication 5035)—This publication presents estimates of frequencies of taxpayer entries recorded on the applicable lines of the forms and schedules filed with partnership tax returns for Tax Year 2011. It also contains corresponding population estimates of dollar amounts recorded on those lines (as applicable). (November 2013)

Partnerships, 2011—Twenty-two tables presenting Tax Year 2011 data for partnership returns (Forms 1065 and 1065-B), including types of partnerships and specific industrial sectors, are now available. The statistics cover balance sheets, trade or business income and deductions, portfolio income, rental income (including rental real estate income), and total net income. Data are classified by industry and size of total assets. In addition, historical tables provide balance sheet and income statement data as well as counts of partnership returns, by size of assets and receipts. 
(November 2013)

Foreign Recipients of US Income Study, 2011 Tax Year—Two tables presenting data for Tax Year 2011 from Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, are now available. The tables include statistics for the number of returns, total income, tax withheld, income subject to withholding, income exempt from withholding, and income by category. Data are available by selected countries and selected recipient types. (October 2013)

Issue Year 2011 Tax-Exempt Bond Tables— Updated tax-exempt bond data for both governmental and private activity bonds issued in calendar year 2011 are now available on Tax Stats. Data include the term of issue, purpose, bond size, and uses of bond proceeds. Tax credit bond data, by bond type, and State-level data, by bond purpose, are also available. (October 2013)

 

 



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Page Last Reviewed or Updated: 28-Mar-2014

The Form 1040x Amended Us Individual Income Tax Return

Form 1040x amended us individual income tax return 13. Form 1040x amended us individual income tax return   Employment Taxes Table of Contents What's New for 2013 What's New for 2014 Reminders Important Dates for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Farm Employment Family Employees Crew Leaders Social Security and Medicare TaxesReligious exemption. Form 1040x amended us individual income tax return Wage limit. Form 1040x amended us individual income tax return Federal Income Tax WithholdingNew Form W-4 for 2014. Form 1040x amended us individual income tax return Required Notice to Employees About Earned Income Credit (EIC) Reporting and Paying Social Security, Medicare, and Withheld Federal Income TaxesElectronic deposit requirement. Form 1040x amended us individual income tax return Federal Unemployment (FUTA) TaxReporting and Paying FUTA Tax What's New for 2013 Social security and Medicare tax for 2013. Form 1040x amended us individual income tax return  The employee tax rate for social security is 6. Form 1040x amended us individual income tax return 2%. Form 1040x amended us individual income tax return Previously, the employee tax rate for social security was 4. Form 1040x amended us individual income tax return 2%. Form 1040x amended us individual income tax return The employer tax rate for social security remains unchanged at 6. Form 1040x amended us individual income tax return 2%. Form 1040x amended us individual income tax return The social security wage base limit is $113,700. Form 1040x amended us individual income tax return The Medicare tax rate is 1. Form 1040x amended us individual income tax return 45% each for the employee and employer, unchanged from 2012. Form 1040x amended us individual income tax return There is no wage base limit for Medicare tax. Form 1040x amended us individual income tax return Additional Medicare Tax. Form 1040x amended us individual income tax return  In addition to withholding Medicare tax at 1. Form 1040x amended us individual income tax return 45%, you must withhold a 0. Form 1040x amended us individual income tax return 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Form 1040x amended us individual income tax return You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Form 1040x amended us individual income tax return Additional Medicare Tax is only imposed on the employee. Form 1040x amended us individual income tax return There is no employer share of Additional Medicare Tax. Form 1040x amended us individual income tax return All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Form 1040x amended us individual income tax return For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. Form 1040x amended us individual income tax return For more information on Additional Medicare Tax, visit IRS. Form 1040x amended us individual income tax return gov and enter “Additional Medicare Tax” in the search box. Form 1040x amended us individual income tax return Leave-based donation programs to aid victims of Hurricane Sandy. Form 1040x amended us individual income tax return  Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2014, to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. Form 1040x amended us individual income tax return The donated leave will not be included in the income or wages of the employee. Form 1040x amended us individual income tax return The employer may deduct the cash payments as business expenses or charitable contributions. Form 1040x amended us individual income tax return For more information, see Notice 2012-69, 2012-51 I. Form 1040x amended us individual income tax return R. Form 1040x amended us individual income tax return B. Form 1040x amended us individual income tax return 712, available at www. Form 1040x amended us individual income tax return irs. Form 1040x amended us individual income tax return gov/irb/2012-51_IRB/ar09. Form 1040x amended us individual income tax return html. Form 1040x amended us individual income tax return Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans extended. Form 1040x amended us individual income tax return  The work opportunity tax credit is now available for eligible unemployed veterans who begin work before January 1, 2014. Form 1040x amended us individual income tax return Previously, the credit was available for unemployed veterans who began work on or after November 22, 2011, and before January 1, 2013. Form 1040x amended us individual income tax return Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Form 1040x amended us individual income tax return For more information, visit IRS. Form 1040x amended us individual income tax return gov and enter “work opportunity credit” in the search box. Form 1040x amended us individual income tax return What's New for 2014 Social security and Medicare tax for 2014. Form 1040x amended us individual income tax return  The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2014 will be discussed in Publication 51 (Circular A), Agricultural Employer's Tax Guide (For use in 2014). Form 1040x amended us individual income tax return The Medicare tax rate for 2014 will also be discussed in Publication 51 (Circular A) (For use in 2014). Form 1040x amended us individual income tax return There is no limit on the amount of wages subject to Medicare tax. Form 1040x amended us individual income tax return Reminders Additional employment tax information for farmers. Form 1040x amended us individual income tax return  See Publication 51 (Circular A) for more detailed guidance on employment taxes. Form 1040x amended us individual income tax return For the latest information about employment tax developments impacting farmers, go to www. Form 1040x amended us individual income tax return irs. Form 1040x amended us individual income tax return gov/pub51. Form 1040x amended us individual income tax return Correcting a previously filed Form 943. Form 1040x amended us individual income tax return  If you discover an error on a previously filed Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, make the correction using Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Form 1040x amended us individual income tax return Form 943-X is filed separately from Form 943. Form 1040x amended us individual income tax return For more information on correcting Form 943, see the Instructions for Form 943-X. Form 1040x amended us individual income tax return Federal tax deposits must be made by electronic funds transfer. Form 1040x amended us individual income tax return  You must use electronic funds transfer to make all federal tax deposits. Form 1040x amended us individual income tax return Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Form 1040x amended us individual income tax return If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Form 1040x amended us individual income tax return Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Form 1040x amended us individual income tax return EFTPS is a free service provided by the Department of Treasury. Form 1040x amended us individual income tax return Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Form 1040x amended us individual income tax return For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Form 1040x amended us individual income tax return To get more information about EFTPS or to enroll in EFTPS, visit www. Form 1040x amended us individual income tax return eftps. Form 1040x amended us individual income tax return gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Form 1040x amended us individual income tax return Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Form 1040x amended us individual income tax return Important Dates for 2014 You should take the action indicated by the dates listed. Form 1040x amended us individual income tax return See By February 15 and On February 16 for Form W-4, Employee's Withholding Allowance Certificate, information. Form 1040x amended us individual income tax return Due dates for deposits of withheld federal income taxes, social security taxes, and Medicare taxes are not listed here. Form 1040x amended us individual income tax return For these dates, see Publication 509, Tax Calendars (For use in 2014). Form 1040x amended us individual income tax return Note. Form 1040x amended us individual income tax return  If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. Form 1040x amended us individual income tax return A statewide legal holiday delays a filing or furnishing due date only if the IRS office where you are required to file a return or furnish a form is located in that state. Form 1040x amended us individual income tax return For any due date, you will meet the “file” or “furnish” date requirement if the envelope containing the tax return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return Postal Service by the due date, or sent by an IRS-designated delivery service by the due date. Form 1040x amended us individual income tax return See Private delivery services in Publication 51 (Circular A). Form 1040x amended us individual income tax return Federal tax deposits can only be made by electronic funds transfer and are governed by legal holidays in the District of Columbia. Form 1040x amended us individual income tax return Statewide holidays no longer apply. Form 1040x amended us individual income tax return For a list of legal holidays that delay the due date of a federal tax deposit, see section 7 of Publication 51 (Circular A). Form 1040x amended us individual income tax return Fiscal year taxpayers. Form 1040x amended us individual income tax return  The due dates listed below apply whether you use a calendar or a fiscal year. Form 1040x amended us individual income tax return By January 31. Form 1040x amended us individual income tax return   File Form 943 with the IRS. Form 1040x amended us individual income tax return If you deposited all Form 943 taxes when due, you have 10 additional days to file. Form 1040x amended us individual income tax return Furnish each employee with a completed Form W-2, Wage and Tax Statement. Form 1040x amended us individual income tax return Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC). Form 1040x amended us individual income tax return File Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Form 1040x amended us individual income tax return If you deposited all the FUTA tax when due, you have 10 additional days to file. Form 1040x amended us individual income tax return File Form 945, Annual Return of Withheld Federal Income Tax, with the IRS to report any nonpayroll income tax withheld during 2013. Form 1040x amended us individual income tax return If you deposited all Form 945 taxes when due, you have 10 additional days to file. Form 1040x amended us individual income tax return By February 15. Form 1040x amended us individual income tax return  Ask for a new Form W-4 or Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, from each employee who claimed exemption from federal income tax withholding last year. Form 1040x amended us individual income tax return On February 16. Form 1040x amended us individual income tax return  Any Form W-4 claiming exemption from withholding for the previous year has now expired. Form 1040x amended us individual income tax return Begin withholding for any employee who previously claimed exemption from withholding but has not given you a new Form W-4 for the current year. Form 1040x amended us individual income tax return If the employee does not give you a new Form W-4, withhold taxes based on the last valid Form W-4 you have for the employee that does not claim exemption from withholding or, if one does not exist, as if he or she is single with zero withholding allowances. Form 1040x amended us individual income tax return If the employee furnishes a new Form W-4 claiming exemption from withholding after February 15, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. Form 1040x amended us individual income tax return By February 28. Form 1040x amended us individual income tax return   File paper Forms 1099 and 1096. Form 1040x amended us individual income tax return File Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return Information Returns, with the IRS. Form 1040x amended us individual income tax return For electronically filed returns, see By March 31 below. Form 1040x amended us individual income tax return File paper Forms W-2 and W-3. Form 1040x amended us individual income tax return File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). Form 1040x amended us individual income tax return For electronically filed returns, see By March 31 below. Form 1040x amended us individual income tax return By March 31. Form 1040x amended us individual income tax return   File electronic Forms W-2 and 1099. Form 1040x amended us individual income tax return File electronic Forms W-2 with the SSA and Forms 1099 with the IRS. Form 1040x amended us individual income tax return For more information on reporting Form W-2 information to the SSA electronically, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. Form 1040x amended us individual income tax return socialsecurity. Form 1040x amended us individual income tax return gov/employer. Form 1040x amended us individual income tax return For information on filing information returns electronically with the IRS, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. Form 1040x amended us individual income tax return By April 30, July 31, October 31, and January 31. Form 1040x amended us individual income tax return   Deposit FUTA taxes. Form 1040x amended us individual income tax return Deposit FUTA tax due if it is more than $500. Form 1040x amended us individual income tax return Before December 1. Form 1040x amended us individual income tax return  Remind employees to submit a new Form W-4 if their withholding allowances have changed or will change for the next year. Form 1040x amended us individual income tax return Introduction You are generally required to withhold federal income tax from the wages of your employees. Form 1040x amended us individual income tax return You may also be subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA) and federal unemployment tax under the Federal Unemployment Tax Act (FUTA). Form 1040x amended us individual income tax return You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Form 1040x amended us individual income tax return This chapter includes information about these taxes. Form 1040x amended us individual income tax return You must also pay self-employment tax on your net earnings from farming. Form 1040x amended us individual income tax return See chapter 12 for information on self-employment tax. Form 1040x amended us individual income tax return Topics - This chapter discusses: Farm employment, Family employees, Crew leaders, Social security and Medicare taxes, Additional Medicare Tax withholding, Federal income tax withholding, Reporting and paying social security, Medicare, and withheld federal income taxes, and FUTA tax. Form 1040x amended us individual income tax return Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 51 (Circular A), Agricultural Employer's Tax Guide 926 Household Employer's Tax Guide Form (and Instructions) W-2 Wage and Tax Statement W-4 Employee's Withholding Allowance Certificate W-9 Request for Taxpayer Identification Number and Certification 940 Employer's Annual Federal Unemployment (FUTA) Tax Return 943 Employer's Annual Federal Tax Return for Agricultural Employees 943-X Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund See chapter 16 for information about getting publications and forms. Form 1040x amended us individual income tax return Farm Employment In general, you are an employer of farmworkers if your employees do any of the following types of work. Form 1040x amended us individual income tax return Raising or harvesting agricultural or horticultural products on a farm, including raising and feeding of livestock. Form 1040x amended us individual income tax return Operating, managing, conserving, improving, or maintaining your farm and its tools and equipment. Form 1040x amended us individual income tax return Services performed in salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor). Form 1040x amended us individual income tax return Handling, processing, or packaging any agricultural or horticultural commodity if you produced more than half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity). Form 1040x amended us individual income tax return Work related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Form 1040x amended us individual income tax return For more information, see Publication 51 (Circular A). Form 1040x amended us individual income tax return Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. Form 1040x amended us individual income tax return This is so even when you give the employee freedom of action. Form 1040x amended us individual income tax return What matters is that you have the right to control the details of how the services are performed. Form 1040x amended us individual income tax return You are responsible for withholding and paying employment taxes for your employees. Form 1040x amended us individual income tax return You are also required to file employment tax returns. Form 1040x amended us individual income tax return These requirements do not apply to amounts that you pay to independent contractors. Form 1040x amended us individual income tax return See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Form 1040x amended us individual income tax return If you employ a family of workers, each worker subject to your control (not just the head of the family) is an employee. Form 1040x amended us individual income tax return Special rules apply to crew leaders. Form 1040x amended us individual income tax return See Crew Leaders , later. Form 1040x amended us individual income tax return Employer identification number (EIN). Form 1040x amended us individual income tax return   If you have employees, you must have an EIN. Form 1040x amended us individual income tax return If you do not have an EIN, you may apply for one online. Form 1040x amended us individual income tax return Go to IRS. Form 1040x amended us individual income tax return gov and click on the Apply for an EIN Online link under Tools. Form 1040x amended us individual income tax return You may also apply for an EIN by calling 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Form 1040x amended us individual income tax return The hours of operation for both numbers are Monday–Friday form 7:00 a. Form 1040x amended us individual income tax return m. Form 1040x amended us individual income tax return –7:00 p. Form 1040x amended us individual income tax return m. Form 1040x amended us individual income tax return local time (Alaska and Hawaii follow Pacific time). Form 1040x amended us individual income tax return You can also fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Form 1040x amended us individual income tax return Employee's social security number (SSN). Form 1040x amended us individual income tax return   An employee who does not have an SSN should submit Form SS-5, Application for a Social Security Card, to the Social Security Administration (SSA). Form 1040x amended us individual income tax return Form SS-5 is available from any SSA office or by calling 1-800-772-1213 (operates 24 hours per day). Form 1040x amended us individual income tax return It is also available from the SSA's website at www. Form 1040x amended us individual income tax return socialsecurity. Form 1040x amended us individual income tax return gov. Form 1040x amended us individual income tax return   The employee must furnish evidence of age, identity, and U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return citizenship or lawful immigration status permitting employment with the Form SS-5. Form 1040x amended us individual income tax return An employee who is age 18 or older must appear in person with this evidence at an SSA office. Form 1040x amended us individual income tax return Form I-9. Form 1040x amended us individual income tax return    You must verify that each new employee is legally eligible to work in the United States. Form 1040x amended us individual income tax return This includes completing the Form I-9, Employment Eligibility Verification. Form 1040x amended us individual income tax return Form I-9 is available from the U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return Citizenship and Immigration Services (USCIS) offices or by calling the Bureau of Citizenship and Immigration Services Forms Request Line at 1-800-870-3676. Form 1040x amended us individual income tax return Form I-9 is also available from the USCIS website at www. Form 1040x amended us individual income tax return uscis. Form 1040x amended us individual income tax return gov. Form 1040x amended us individual income tax return You can also contact the USCIS at 1-800-375-5283 for more information. Form 1040x amended us individual income tax return New hire reporting. Form 1040x amended us individual income tax return   You are required to report any new employee to a designated state new hire registry. Form 1040x amended us individual income tax return Many states accept a copy of Form W-4 with employer information added. Form 1040x amended us individual income tax return Visit the Office of Child Support Enforcement website at www. Form 1040x amended us individual income tax return acf. Form 1040x amended us individual income tax return hhs. Form 1040x amended us individual income tax return gov/programs/cse/newhire for more information. Form 1040x amended us individual income tax return Family Employees Generally, the wages you pay to family members who are your employees are subject to employment taxes. Form 1040x amended us individual income tax return However, certain exemptions may apply to wages paid to your child, spouse, or parent. Form 1040x amended us individual income tax return Exemptions for your child. Form 1040x amended us individual income tax return   Payments for the services of your child under age 18 who works for you in your trade or business (including a farm) are not subject to social security and Medicare taxes. Form 1040x amended us individual income tax return However, see Nonexempt services of a child or spouse , later. Form 1040x amended us individual income tax return Payments for the services of your child under age 21 employed by you in other than a trade or business, such as payments for household services in your home, are also not subject to social security or Medicare taxes. Form 1040x amended us individual income tax return Payments for the services of your child under age 21 employed by you, whether or not in your trade or business, are not subject to FUTA tax. Form 1040x amended us individual income tax return Although not subject to social security, Medicare, or FUTA tax, the child's wages still may be subject to federal income tax withholding. Form 1040x amended us individual income tax return Exemptions for your spouse. Form 1040x amended us individual income tax return   Payments for the services of your spouse who works for you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes, but not FUTA tax. Form 1040x amended us individual income tax return   Payments for the services of your spouse employed by you in other than a trade or business, such as payments for household services in your home, are not subject to social security, Medicare, or FUTA taxes. Form 1040x amended us individual income tax return Nonexempt services of a child or spouse. Form 1040x amended us individual income tax return   Payments for the services of your child or spouse are subject to federal income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for any of the following entities. Form 1040x amended us individual income tax return A corporation, even if it is controlled by you. Form 1040x amended us individual income tax return A partnership, even if you are a partner. Form 1040x amended us individual income tax return This does not apply to wages paid to your child if each partner is a parent of the child. Form 1040x amended us individual income tax return An estate or trust, even if it is the estate of a deceased parent. Form 1040x amended us individual income tax return In these situations, the child or spouse is considered to work for the corporation, partnership, or estate, not you. Form 1040x amended us individual income tax return Exemptions for your parent. Form 1040x amended us individual income tax return   Payments for the services of your parent employed by you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes. Form 1040x amended us individual income tax return Social security and Medicare taxes do not apply to wages paid to your parent for services not in your trade or business, but they do apply to payments for household services in your home if both the following conditions are satisfied. Form 1040x amended us individual income tax return You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter. Form 1040x amended us individual income tax return You are a widow or widower; or divorced and not remarried; or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. Form 1040x amended us individual income tax return   Wages you pay to your parent are not subject to FUTA tax, regardless of the type of services provided. Form 1040x amended us individual income tax return Qualified joint venture. Form 1040x amended us individual income tax return   If spouses elect to be treated as a qualified joint venture instead of a partnership, either spouse may report and pay the employment taxes due on the wages paid to employees using the EIN of that spouse's sole proprietorship. Form 1040x amended us individual income tax return For more information about qualified joint ventures, see chapter 12. Form 1040x amended us individual income tax return Crew Leaders If farmworkers are provided by a crew leader, the crew leader may be the employer of the workers. Form 1040x amended us individual income tax return Social security and Medicare taxes. Form 1040x amended us individual income tax return   For social security and Medicare tax purposes, the crew leader is the employer of the workers if both of the following requirements are met. Form 1040x amended us individual income tax return The crew leader pays (either on his or her own behalf or on behalf of the farmer) the workers for their farm labor. Form 1040x amended us individual income tax return The crew leader has not entered into a written agreement with the farmer under which the crew leader is designated as an employee of the farmer. Form 1040x amended us individual income tax return Federal income tax withholding. Form 1040x amended us individual income tax return   If the crew leader is the employer for social security and Medicare tax purposes, the crew leader is the employer for federal income tax withholding purposes. Form 1040x amended us individual income tax return Federal unemployment (FUTA) tax. Form 1040x amended us individual income tax return   For FUTA tax purposes, the crew leader is the employer of the workers if, in addition to the earlier requirements, either of the following requirements are met. Form 1040x amended us individual income tax return The crew leader is registered under the Migrant and Seasonal Agricultural Worker Protection Act. Form 1040x amended us individual income tax return Substantially all crew members operate or maintain mechanized equipment provided by the crew leader as part of the service to the farmer. Form 1040x amended us individual income tax return   The farmer is the employer of workers furnished by a crew leader in all other situations. Form 1040x amended us individual income tax return In addition, the farmer is the employer of workers furnished by a registered crew leader if the workers are the employees of the farmer under the common-law test. Form 1040x amended us individual income tax return For example, some farmers employ individuals to recruit farmworkers exclusively for them. Form 1040x amended us individual income tax return Although these individuals may be required to register under the Migrant and Seasonal Agricultural Worker Protection Act, the workers are employed directly by the farmer. Form 1040x amended us individual income tax return The farmer is the employer in these cases. Form 1040x amended us individual income tax return For information about common-law employees, see section 1 of Publication 15-A. Form 1040x amended us individual income tax return For information about crew leaders, see the Department of Labor website at www. Form 1040x amended us individual income tax return dol. Form 1040x amended us individual income tax return gov/whd/regs/compliance/whdfs49. Form 1040x amended us individual income tax return htm. Form 1040x amended us individual income tax return Social Security and Medicare Taxes All cash wages you pay to an employee during the year for farmwork are subject to social security and Medicare taxes if you meet either of the following tests. Form 1040x amended us individual income tax return You pay the employee $150 or more in cash wages (count all wages paid on a time, piecework, or other basis) during the year for farmwork (the $150 test). Form 1040x amended us individual income tax return The $150 test applies separately to each farmworker that you employ. Form 1040x amended us individual income tax return If you employ a family of workers, each member is treated separately. Form 1040x amended us individual income tax return Do not count wages paid by other employers. Form 1040x amended us individual income tax return You pay cash and noncash wages of $2,500 or more during the year to all your employees for farmwork (the $2,500 test). Form 1040x amended us individual income tax return If the $2,500 test for the group is not met, the $150 test for an employee still applies. Form 1040x amended us individual income tax return Exceptions. Form 1040x amended us individual income tax return   Annual cash wages of less than $150 you pay to a seasonal farmworker are not subject to social security and Medicare taxes, even if you pay $2,500 or more to all your farmworkers. Form 1040x amended us individual income tax return However, these wages count toward the $2,500 test for determining whether other farmworkers' wages are subject to social security and Medicare taxes. Form 1040x amended us individual income tax return   A seasonal farmworker is a worker who: Works as a hand-harvest laborer, Is paid piece rates in an operation usually paid on this basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Worked in agriculture less than 13 weeks in the preceding calendar year. Form 1040x amended us individual income tax return   See Family Employees , earlier, for certain exemptions from social security and Medicare taxes that apply to your child, spouse, and parent. Form 1040x amended us individual income tax return Religious exemption. Form 1040x amended us individual income tax return   An exemption from social security and Medicare taxes is available to members of a recognized religious group or division opposed to public insurance. Form 1040x amended us individual income tax return This exemption is available only if both the employee and the employer are members of the group or division. Form 1040x amended us individual income tax return   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Form 1040x amended us individual income tax return Cash wages. Form 1040x amended us individual income tax return   Only cash wages paid to farmworkers are subject to social security and Medicare taxes. Form 1040x amended us individual income tax return Cash wages include checks, money orders, and any kind of money or cash. Form 1040x amended us individual income tax return   Only cash wages subject to social security and Medicare taxes are credited to your employees for social security benefit purposes. Form 1040x amended us individual income tax return Payments not subject to these taxes, such as commodity wages, do not contribute to your employees' social security coverage. Form 1040x amended us individual income tax return For information about social security benefits, contact the SSA at 1-800-772-1213 or online at www. Form 1040x amended us individual income tax return socialsecurity. Form 1040x amended us individual income tax return gov. Form 1040x amended us individual income tax return Noncash wages. Form 1040x amended us individual income tax return    Noncash wages include food, lodging, clothing, transportation passes, and other goods and services. Form 1040x amended us individual income tax return Noncash wages paid to farmworkers, including commodity wages, are not subject to social security and Medicare taxes. Form 1040x amended us individual income tax return However, they are subject to these taxes if the substance of the transaction is a cash payment. Form 1040x amended us individual income tax return For information on lodging provided as a condition of employment, see Publication 15-B. Form 1040x amended us individual income tax return   Report the value of noncash wages in box 1 of Form W-2 together with cash wages. Form 1040x amended us individual income tax return Do not show noncash wages in box 3 or in box 5, (unless the substance of the transaction is a cash payment). Form 1040x amended us individual income tax return Tax rates and social security wage limit. Form 1040x amended us individual income tax return   For 2013, the employer and the employee will pay the following taxes. Form 1040x amended us individual income tax return The employer and employee each pay 6. Form 1040x amended us individual income tax return 2% of cash wages for social security tax (old-age, survivors, and disability insurance). Form 1040x amended us individual income tax return The employer and employee each pay 1. Form 1040x amended us individual income tax return 45% of cash wages for Medicare tax (hospital insurance). Form 1040x amended us individual income tax return The employee pays 0. Form 1040x amended us individual income tax return 9% of cash wages in excess of $200,000 for Additional Medicare Tax. Form 1040x amended us individual income tax return Wage limit. Form 1040x amended us individual income tax return   The limit on wages subject to the social security tax for 2013 is $113,700. Form 1040x amended us individual income tax return There is no limit on wages subject to the Medicare tax. Form 1040x amended us individual income tax return All covered wages are subject to the Medicare tax. Form 1040x amended us individual income tax return Additionally, all wages in excess of $200,000 are subject to Additional Medicare Tax withholding. Form 1040x amended us individual income tax return Paying employee's share. Form 1040x amended us individual income tax return   If you would rather pay the employee's share of social security and Medicare taxes without deducting it from his or her wages, you may do so. Form 1040x amended us individual income tax return It is additional income to the employee. Form 1040x amended us individual income tax return You must include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages (boxes 3 and 5 on Form W-2) or as wages for federal unemployment (FUTA) tax purposes. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return Jane operates a small family fruit farm. Form 1040x amended us individual income tax return She employs day laborers in the picking season to enable her to timely get her crop to market. Form 1040x amended us individual income tax return She does not deduct the employees' share of social security and Medicare taxes from their pay; instead, she pays it on their behalf. Form 1040x amended us individual income tax return When her accountant, Susan, prepares the employees' Forms W-2, she adds each employee's share of social security and Medicare taxes paid by Jane to the employee's wage income (box 1 of Form W-2), but does not include it in box 3 (social security wages) or box 5 (Medicare wages and tips). Form 1040x amended us individual income tax return For 2013, Jane paid Mary $1,000 during the year. Form 1040x amended us individual income tax return Susan enters $1,076. Form 1040x amended us individual income tax return 50 in box 1 of Mary's Form W-2 ($1,000 wages plus $76. Form 1040x amended us individual income tax return 50 social security and Medicare taxes paid for Mary). Form 1040x amended us individual income tax return She enters $1,000 in boxes 3 and 5 of Mary's Form W-2. Form 1040x amended us individual income tax return Additional Medicare Tax. Form 1040x amended us individual income tax return   In addition to withholding Medicare tax at 1. Form 1040x amended us individual income tax return 45%, you must withhold a 0. Form 1040x amended us individual income tax return 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Form 1040x amended us individual income tax return You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Form 1040x amended us individual income tax return Additional Medicare Tax is only imposed on the employee. Form 1040x amended us individual income tax return There is no employer share of Additional Medicare Tax. Form 1040x amended us individual income tax return All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Form 1040x amended us individual income tax return   For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E). Form 1040x amended us individual income tax return For more information on Additional Medicare Tax, visit IRS. Form 1040x amended us individual income tax return gov and enter “Additional Medicare Tax” in the search box. Form 1040x amended us individual income tax return Federal Income Tax Withholding If the cash wages you pay to farmworkers are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. Form 1040x amended us individual income tax return Although noncash wages are subject to federal income tax, withhold income tax only if you and the employee agree to do so. Form 1040x amended us individual income tax return The amount to withhold is figured on gross wages without taking out social security and Medicare taxes, union dues, insurance, etc. Form 1040x amended us individual income tax return Form W-4. Form 1040x amended us individual income tax return   Generally, the amount of federal income tax you withhold is based on the employee's marital status and withholding allowances claimed on the employee's Form W-4. Form 1040x amended us individual income tax return In general, an employee can claim withholding allowances on Form W-4 equal to the number of exemptions the employee will be entitled to claim on his or her tax return. Form 1040x amended us individual income tax return An employee may also be able to claim a special withholding allowance and allowances for estimated deductions and credits. Form 1040x amended us individual income tax return   Do not withhold federal income tax from the wages of an employee who, by filing Form W-4, certifies that he or she had no federal income tax liability last year and anticipates no liability for the current year. Form 1040x amended us individual income tax return   You should give each new employee a Form W-4 as soon as you hire the employee. Form 1040x amended us individual income tax return For Spanish-speaking employees, you may use Formulario W-4(SP) which is the Spanish translation of Form W-4. Form 1040x amended us individual income tax return Have the employee complete and return the form to you before the first payday. Form 1040x amended us individual income tax return If the employee does not return the completed form, you must withhold federal income tax as if the employee is single and claims no withholding allowances. Form 1040x amended us individual income tax return New Form W-4 for 2014. Form 1040x amended us individual income tax return   You should make the 2014 Form W-4 available to your employees and encourage them to check their income tax withholding for 2014. Form 1040x amended us individual income tax return Those employees who owed a large amount of tax or received a large refund for 2013 may want to submit a new Form W-4. Form 1040x amended us individual income tax return You cannot accept substitute Forms W-4 developed by employees. Form 1040x amended us individual income tax return How to figure withholding. Form 1040x amended us individual income tax return   You can use one of several methods to determine the amount to withhold. Form 1040x amended us individual income tax return The methods are described in Publication 51 (Circular A), which contains tables showing the correct amount of federal income tax you should withhold. Form 1040x amended us individual income tax return Publication 51 (Circular A) also contains additional information about federal income tax withholding. Form 1040x amended us individual income tax return Nonemployee compensation. Form 1040x amended us individual income tax return   Generally, you do not have to withhold federal income tax on payments for services to individuals who are not your employees. Form 1040x amended us individual income tax return However, you may be required to report these payments on Form 1099-MISC, Miscellaneous Income, and to withhold under the backup withholding rules. Form 1040x amended us individual income tax return For more information, see the Instructions for Form 1099-MISC. Form 1040x amended us individual income tax return Required Notice to Employees About Earned Income Credit (EIC) You must provide notification about EIC to each employee who worked for you at any time during the year and from whom you did not withhold any federal income tax. Form 1040x amended us individual income tax return However, you do not have to notify employees who claim exemption from federal income tax withholding on Form W-4. Form 1040x amended us individual income tax return You meet the notification requirement by giving each employee any of the following. Form 1040x amended us individual income tax return Form W-2, which contains EIC notification on the back of Copy B. Form 1040x amended us individual income tax return A substitute Form W-2 with the exact EIC wording shown on the back of copy B of Form W-2. Form 1040x amended us individual income tax return Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). Form 1040x amended us individual income tax return Your own written statement with the exact wording of Notice 797. Form 1040x amended us individual income tax return For more information, see Publication 51 (Circular A). Form 1040x amended us individual income tax return Reporting and Paying Social Security, Medicare, and Withheld Federal Income Taxes You must withhold federal income, social security, and Medicare taxes required to be withheld from the salaries and wages of your employees. Form 1040x amended us individual income tax return You are liable for the payment of these taxes to the federal government whether or not you collect them from your employees. Form 1040x amended us individual income tax return If, for example, you withhold less than the correct tax from an employee's wages, you are still liable for the full amount. Form 1040x amended us individual income tax return You must also pay the employer's share of social security and Medicare taxes. Form 1040x amended us individual income tax return There is no employer share of Additional Medicare Tax. Form 1040x amended us individual income tax return Form 943. Form 1040x amended us individual income tax return   Report withheld federal income tax, social security tax, and Medicare tax on Form 943. Form 1040x amended us individual income tax return Your 2013 Form 943 is due by January 31, 2014 (or February 10, 2014, if you made deposits on time in full payment of the taxes due for the year). Form 1040x amended us individual income tax return Deposits. Form 1040x amended us individual income tax return   Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld during the year. Form 1040x amended us individual income tax return However, you may make payments with Form 943 instead of depositing them if you accumulate less than a $2,500 tax liability (“Total taxes after adjustments” line on Form 943) during the year and you pay in full with a timely filed return. Form 1040x amended us individual income tax return   For more information on deposit rules, see Publication 51 (Circular A). Form 1040x amended us individual income tax return Electronic deposit requirement. Form 1040x amended us individual income tax return   You must use electronic funds transfer to make all federal tax deposits. Form 1040x amended us individual income tax return Generally, electronic funds transfers are made using EFTPS. Form 1040x amended us individual income tax return If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Form 1040x amended us individual income tax return Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Form 1040x amended us individual income tax return EFTPS is a free service provided by the Department of Treasury. Form 1040x amended us individual income tax return Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Form 1040x amended us individual income tax return   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Form 1040x amended us individual income tax return To get more information about EFTPS or to enroll in EFTPS, visit www. Form 1040x amended us individual income tax return eftps. Form 1040x amended us individual income tax return gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Form 1040x amended us individual income tax return Additional information about EFTPS is also available in Publication 966. Form 1040x amended us individual income tax return Form W-2. Form 1040x amended us individual income tax return   By January 31, you must furnish each employee a Form W-2 showing total wages for the previous year and total federal income tax, social security tax, and Medicare tax withheld. Form 1040x amended us individual income tax return However, if an employee stops working for you and requests the form earlier, you must give it to the employee within 30 days of the later of the following dates. Form 1040x amended us individual income tax return The date the employee requests the form. Form 1040x amended us individual income tax return The date you make your final payment of wages to the employee. Form 1040x amended us individual income tax return Compensation paid to H-2A visa holders. Form 1040x amended us individual income tax return   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2. Form 1040x amended us individual income tax return Compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes, and therefore should not be reported as wages subject to social security tax (line 2), Medicare tax (line 4), or Additional Medicare Tax (line 6) on Form 943, and should not be reported as social security wages (box 3) or Medicare wages (box 5) on Form W-2. Form 1040x amended us individual income tax return   An employer is not required to withhold federal income tax from compensation it pays to an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. Form 1040x amended us individual income tax return In this case, the worker must give the employer a completed Form W-4. Form 1040x amended us individual income tax return Federal income tax withheld should be reported on Form 943, line 8, and in box 2 of Form W-2. Form 1040x amended us individual income tax return   These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. Form 1040x amended us individual income tax return For the rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. Form 1040x amended us individual income tax return Trust fund recovery penalty. Form 1040x amended us individual income tax return   If you are responsible for withholding, accounting for, depositing, or paying federal withholding taxes and willfully fail to do so, you can be held liable for a penalty equal to the withheld tax not paid. Form 1040x amended us individual income tax return A responsible person can be an officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. Form 1040x amended us individual income tax return A trustee or agent with authority over the funds of the business can also be held responsible for the penalty. Form 1040x amended us individual income tax return   Willfully means voluntarily, consciously, and intentionally. Form 1040x amended us individual income tax return Paying other expenses of the business instead of the taxes due is acting willfully. Form 1040x amended us individual income tax return Consequences of treating an employee as an independent contractor. Form 1040x amended us individual income tax return   If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker. Form 1040x amended us individual income tax return See Publication 15-A for more information. Form 1040x amended us individual income tax return Federal Unemployment (FUTA) Tax You must pay FUTA tax if you meet either of the following tests. Form 1040x amended us individual income tax return You paid cash wages of $20,000 or more to farmworkers in any calendar quarter during the current or preceding calendar year. Form 1040x amended us individual income tax return You employed 10 or more farmworkers for some part of at least 1 day during any 20 or more different calendar weeks during the current or preceding calendar year. Form 1040x amended us individual income tax return These rules do not apply to exempt services of your spouse, your parents, or your children under age 21. Form 1040x amended us individual income tax return See Family Employees , earlier. Form 1040x amended us individual income tax return Alien farmworkers. Form 1040x amended us individual income tax return   Wages paid to aliens admitted on a temporary basis to the United States to perform farmwork (also known as “H-2A visa workers”) are exempt from FUTA tax. Form 1040x amended us individual income tax return However, include your employment of these workers and the wages you paid them to determine whether you meet either of the above tests. Form 1040x amended us individual income tax return Commodity wages. Form 1040x amended us individual income tax return   Payments in kind for farm labor are not cash wages. Form 1040x amended us individual income tax return Do not count them to figure whether you are subject to FUTA tax or to figure how much tax you owe. Form 1040x amended us individual income tax return Tax rate and credit. Form 1040x amended us individual income tax return   The gross FUTA tax rate is 6. Form 1040x amended us individual income tax return 0% of the first $7,000 cash wages you pay to each employee during the year. Form 1040x amended us individual income tax return However, you are given a credit of up to 5. Form 1040x amended us individual income tax return 4% of the first $7,000 cash wages you pay to each employee for the state unemployment tax you pay. Form 1040x amended us individual income tax return If your state tax rate (experience rate) is less than 5. Form 1040x amended us individual income tax return 4%, you may still be allowed the full 5. Form 1040x amended us individual income tax return 4% credit. Form 1040x amended us individual income tax return   If you do not pay the state tax, you cannot take the credit. Form 1040x amended us individual income tax return If you are exempt from state unemployment tax for any reason, the full 6. Form 1040x amended us individual income tax return 0% rate applies. Form 1040x amended us individual income tax return See the Instructions for Form 940 for additional information. Form 1040x amended us individual income tax return More information. Form 1040x amended us individual income tax return   For more information on FUTA tax, see Publication 51 (Circular A). Form 1040x amended us individual income tax return Reporting and Paying FUTA Tax The FUTA tax is imposed on you as the employer. Form 1040x amended us individual income tax return It must not be collected or deducted from the wages of your employees. Form 1040x amended us individual income tax return Form 940. Form 1040x amended us individual income tax return   Report FUTA tax on Form 940. Form 1040x amended us individual income tax return The 2013 Form 940 is due January 31, 2014 (or February 10, 2014, if you timely deposited the full amount of your 2013 FUTA tax). Form 1040x amended us individual income tax return Deposits. Form 1040x amended us individual income tax return   If at the end of any calendar quarter you owe, but have not yet deposited, more than $500 in FUTA tax for the year, you must make a deposit by the end of the following month. Form 1040x amended us individual income tax return If the undeposited tax is $500 or less at the end of a quarter, you do not have to deposit it. Form 1040x amended us individual income tax return You can add it to the tax for the next quarter. Form 1040x amended us individual income tax return If the total undeposited tax is more than $500 at the end of the next quarter, a deposit will be required. Form 1040x amended us individual income tax return If the total undeposited tax at the end of the 4th quarter is $500 or less, you can either make a deposit or pay it with your return by the January 31, 2014, due date. Form 1040x amended us individual income tax return Electronic deposit requirement. Form 1040x amended us individual income tax return   You must use electronic funds transfer to make all federal tax deposits. Form 1040x amended us individual income tax return Generally, electronic funds transfers are made using EFTPS. Form 1040x amended us individual income tax return If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Form 1040x amended us individual income tax return Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Form 1040x amended us individual income tax return EFTPS is a free service provided by the Department of Treasury. Form 1040x amended us individual income tax return Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Form 1040x amended us individual income tax return   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Form 1040x amended us individual income tax return To get more information about EFTPS or to enroll in EFTPS, visit www. Form 1040x amended us individual income tax return eftps. Form 1040x amended us individual income tax return gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Form 1040x amended us individual income tax return Additional information about EFTPS is also available in Publication 966. Form 1040x amended us individual income tax return Prev  Up  Next   Home   More Online Publications