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Free 2012 Tax Filing Online

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Free 2012 tax filing online Publication 15-A - Introductory Material Table of Contents Future Developments What's New Reminders Introduction Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 15-A, such as legislation enacted after it was published, go to www. Free 2012 tax filing online irs. Free 2012 tax filing online gov/pub15a. Free 2012 tax filing online What's New Social security and Medicare tax for 2014. Free 2012 tax filing online  The social security tax rate is 6. Free 2012 tax filing online 2% each for the employee and employer, unchanged from 2013. Free 2012 tax filing online The social security wage base limit is $117,000. Free 2012 tax filing online The Medicare tax rate is 1. Free 2012 tax filing online 45% each for the employee and employer, unchanged from 2013. Free 2012 tax filing online There is no wage base limit for Medicare tax. Free 2012 tax filing online Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Free 2012 tax filing online Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. Free 2012 tax filing online Withholding allowance. Free 2012 tax filing online  The 2014 amount for one withholding allowance on an annual basis is $3,950. Free 2012 tax filing online Same-sex marriage. Free 2012 tax filing online  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Free 2012 tax filing online For more information, see Revenue Ruling 2013-17, 2013-38 I. Free 2012 tax filing online R. Free 2012 tax filing online B. Free 2012 tax filing online 201, available at www. Free 2012 tax filing online irs. Free 2012 tax filing online gov/irb/2013-38_IRB/ar07. Free 2012 tax filing online html. Free 2012 tax filing online Notice 2013-61 provides special administrative procedures for employers to make claims for refunds or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Free 2012 tax filing online Notice 2013-61, 2013-44 I. Free 2012 tax filing online R. Free 2012 tax filing online B. Free 2012 tax filing online 432, is available at www. Free 2012 tax filing online irs. Free 2012 tax filing online gov/irb/2013-44_IRB/ar10. Free 2012 tax filing online html. Free 2012 tax filing online Reminders Additional Medicare Tax withholding. Free 2012 tax filing online . Free 2012 tax filing online  In addition to withholding Medicare tax at 1. Free 2012 tax filing online 45%, you must withhold a 0. Free 2012 tax filing online 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Free 2012 tax filing online 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. Free 2012 tax filing online Additional Medicare Tax is only imposed on the employee. Free 2012 tax filing online There is no employer share of Additional Medicare Tax. Free 2012 tax filing online All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Free 2012 tax filing online 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. Free 2012 tax filing online For more information on Additional Medicare Tax, visit IRS. Free 2012 tax filing online gov and enter “Additional Medicare Tax” in the search box. Free 2012 tax filing online Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Free 2012 tax filing online  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. Free 2012 tax filing online 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. Free 2012 tax filing online For more information, visit IRS. Free 2012 tax filing online gov and enter “work opportunity tax credit” in the search box. Free 2012 tax filing online COBRA premium assistance credit. Free 2012 tax filing online  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. Free 2012 tax filing online For more information, see COBRA premium assistance credit in Publication 15 (Circular E). Free 2012 tax filing online Federal tax deposits must be made by electronic funds transfer. Free 2012 tax filing online  You must use electronic funds transfer to make all federal tax deposits. Free 2012 tax filing online Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Free 2012 tax filing online 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. Free 2012 tax filing online Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Free 2012 tax filing online EFTPS is a free service provided by the Department of Treasury. Free 2012 tax filing online Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Free 2012 tax filing online For more information on making federal tax deposits, see How To Deposit in Publication 15 (Circular E). Free 2012 tax filing online To get more information about EFTPS or to enroll in EFTPS, visit www. Free 2012 tax filing online eftps. Free 2012 tax filing online gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Free 2012 tax filing online Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Free 2012 tax filing online You must receive written notice from the IRS to file Form 944. Free 2012 tax filing online  If you have been filing Forms 941, Employer's QUARTERLY Federal Tax Return (or Forms 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U. Free 2012 tax filing online S. Free 2012 tax filing online Virgin Islands, or Formularios 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono), and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941, you must contact the IRS to request to file Form 944. Free 2012 tax filing online You must receive written notice from the IRS to file Form 944 instead of Forms 941 before you may file this form. Free 2012 tax filing online For more information on requesting to file Form 944, visit IRS. Free 2012 tax filing online gov and enter “file employment taxes annually” in the search box. Free 2012 tax filing online Employers can request to file Forms 941 instead of Form 944. Free 2012 tax filing online  If you received notice from the IRS and have been filing Form 944 but would like to file Forms 941 instead, you must contact the IRS to request to file Forms 941. Free 2012 tax filing online You must receive written notice from the IRS to file Forms 941 instead of Form 944 before you may file these forms. Free 2012 tax filing online For more information on requesting to file Form 944, visit IRS. Free 2012 tax filing online gov and enter “file employment taxes annually” in the search box. Free 2012 tax filing online Aggregate Form 941 filers. Free 2012 tax filing online  Agents must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941. Free 2012 tax filing online Aggregate Forms 941 can only be filed by agents approved by the IRS under section 3504 of the Internal Revenue Code. Free 2012 tax filing online To request approval to act as an agent for an employer, the agent must file Form 2678, Employer/Payer Appointment of Agent, with the IRS. Free 2012 tax filing online Aggregate Form 940 filers. Free 2012 tax filing online  Agents must complete Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Free 2012 tax filing online Aggregate Forms 940 may only be filed by agents acting on behalf of home care service recipients who receive home care services through a program administered by a federal, state, or local government. Free 2012 tax filing online To request approval to act as an agent on behalf of home care service recipients, the agent must file Form 2678 with the IRS. Free 2012 tax filing online Electronic filing and payment. Free 2012 tax filing online  Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Free 2012 tax filing online Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and payment easier. Free 2012 tax filing online Spend less time and worry about taxes and more time running your business. Free 2012 tax filing online Use e-file and the Electronic Federal Tax Payment System (EFTPS) to your benefit. Free 2012 tax filing online For e-file, visit www. Free 2012 tax filing online irs. Free 2012 tax filing online gov/efile for additional information. Free 2012 tax filing online For EFTPS, visit www. Free 2012 tax filing online eftps. Free 2012 tax filing online gov or call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD). Free 2012 tax filing online Electronic submission of Forms W-4, W-4P, W-4S and W-4V. Free 2012 tax filing online  You may set up a system to electronically receive any or all of the following forms (and their Spanish versions, if available) from an employee or payee. Free 2012 tax filing online Form W-4, Employee's Withholding Allowance Certificate. Free 2012 tax filing online Form W-4P, Withholding Certificate for Pension or Annuity Payments. Free 2012 tax filing online Form W-4S, Request for Federal Income Tax Withholding From Sick Pay. Free 2012 tax filing online Form W-4V, Voluntary Withholding Request. Free 2012 tax filing online For each form that you establish an electronic submission system for, you must meet each of the following five requirements. Free 2012 tax filing online The electronic system must ensure that the information received by the payer is the information sent by the payee. Free 2012 tax filing online The system must document all occasions of user access that result in a submission. Free 2012 tax filing online In addition, the design and operation of the electronic system, including access procedures, must make it reasonably certain that the person accessing the system and submitting the form is the person identified on the form. Free 2012 tax filing online The electronic system must provide exactly the same information as the paper form. Free 2012 tax filing online The electronic submission must be signed with an electronic signature by the payee whose name is on the form. Free 2012 tax filing online The electronic signature must be the final entry in the submission. Free 2012 tax filing online Upon request, you must furnish a hard copy of any completed electronic form to the IRS and a statement that, to the best of the payer's knowledge, the electronic form was submitted by the named payee. Free 2012 tax filing online The hard copy of the electronic form must provide exactly the same information as, but need not be a facsimile of, the paper form. Free 2012 tax filing online For Form W-4, the signature must be under penalty of perjury, and must contain the same language that appears on the paper version of the form. Free 2012 tax filing online The electronic system must inform the employee that he or she must make a declaration contained in the perjury statement and that the declaration is made by signing the Form W-4. Free 2012 tax filing online You must also meet all recordkeeping requirements that apply to the paper forms. Free 2012 tax filing online For more information, see: Regulations sections 31. Free 2012 tax filing online 3402(f)(5)-1(c) (for Form W-4), and Announcement 99-6 (for Forms W-4P, W-4S, and W-4V). Free 2012 tax filing online You can find Announcement 99-6 on page 24 of Internal Revenue Bulletin 1999-4 at www. Free 2012 tax filing online irs. Free 2012 tax filing online gov/pub/irs-irbs/irb99-04. Free 2012 tax filing online pdf. Free 2012 tax filing online Additional employment tax information. Free 2012 tax filing online  Visit the IRS website at www. Free 2012 tax filing online irs. Free 2012 tax filing online gov/businesses and click on the Employment Taxes link under Businesses Topics. Free 2012 tax filing online Telephone help. Free 2012 tax filing online  You can call the IRS Business and Specialty Tax Line with your employment tax questions at 1-800-829-4933. Free 2012 tax filing online Help for people with disabilities. Free 2012 tax filing online  You may call 1-800-829-4059 (TDD/TTY for persons who are deaf, heard of hearing, or have a speech disability) with any tax question or to order forms and publications. Free 2012 tax filing online You may also use this number for assistance with unresolved tax problems. Free 2012 tax filing online Furnishing Form W-2 to employees electronically. Free 2012 tax filing online  You may set up a system to furnish Form W-2, Wage and Tax Statement, electronically. Free 2012 tax filing online Each employee participating must consent (either electronically or by paper document) to receive his or her Form W-2 electronically, and you must notify the employee of all hardware and software requirements to receive the form. Free 2012 tax filing online You may not send a Form W-2 electronically to any employee who does not consent or who has revoked consent previously provided. Free 2012 tax filing online To furnish Forms W-2 electronically, you must meet the following disclosure requirements and provide a clear and conspicuous statement of each requirement to your employees. Free 2012 tax filing online The employee must be informed that he or she will receive a paper Form W-2 if consent is not given to receive it electronically. Free 2012 tax filing online The employee must be informed of the scope and duration of the consent. Free 2012 tax filing online The employee must be informed of any procedure for obtaining a paper copy of his or her Form W-2 and whether or not the request for a paper statement is treated as a withdrawal of his or her consent to receiving his or her Form W-2 electronically. Free 2012 tax filing online The employee must be notified about how to withdraw a consent and the effective date and manner by which the employer will confirm the withdrawn consent. Free 2012 tax filing online The employee must also be notified that the withdrawn consent does not apply to the previously issued Forms W-2. Free 2012 tax filing online The employee must be informed about any conditions under which electronic Forms W-2 will no longer be furnished (for example, termination of employment). Free 2012 tax filing online The employee must be informed of any procedures for updating his or her contact information that enables the employer to provide electronic Forms W-2. Free 2012 tax filing online The employer must notify the employee of any changes to the employer's contact information. Free 2012 tax filing online You must furnish electronic Forms W-2 by the same due date as the paper Forms W-2. Free 2012 tax filing online For more information on furnishing Form W-2 to employees electronically, see Regulations section 31. Free 2012 tax filing online 6051-1(j). Free 2012 tax filing online Photographs of missing children. Free 2012 tax filing online  The IRS is a proud partner with the National Center for Missing and Exploited Children. Free 2012 tax filing online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free 2012 tax filing online You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Free 2012 tax filing online Introduction This publication supplements Publication 15 (Circular E). Free 2012 tax filing online It contains specialized and detailed employment tax information supplementing the basic information provided in Publication 15 (Circular E). Free 2012 tax filing online This publication also contains tables for withholding on distributions of Indian gaming profits to tribal members. Free 2012 tax filing online Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment of various types of noncash compensation. Free 2012 tax filing online Ordering publications and forms. Free 2012 tax filing online   See Ordering Employer Tax Forms and Publications in Publication 15 (Circular E) and How To Get Tax Help , later, for more information on how to obtain forms and publications. Free 2012 tax filing online Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 505 Tax Withholding and Estimated Tax 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 583 Starting a Business and Keeping Records 1635 Employer Identification Number: Understanding Your EIN Comments and suggestions. Free 2012 tax filing online   We welcome your comments about this publication and your suggestions for future editions. Free 2012 tax filing online    You can write to us at the following address: Internal Revenue Service Tax Forms & Publications Division 1111 Constitution Ave. Free 2012 tax filing online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free 2012 tax filing online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free 2012 tax filing online   You can also send us comments from www. Free 2012 tax filing online irs. Free 2012 tax filing online gov/formspubs. Free 2012 tax filing online Click on More Information and then click on Comment on Tax Forms and Publications. Free 2012 tax filing online   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Free 2012 tax filing online Prev  Up  Next   Home   More Online Publications
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Free 2012 tax filing online 32. Free 2012 tax filing online   Child and Dependent Care Credit Table of Contents Reminders Introduction Useful Items - You may want to see: Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. Free 2012 tax filing online Employment Taxes for Household Employers Reminders Taxpayer identification number needed for each qualifying person. Free 2012 tax filing online  You must include on line 2 of Form 2441 the name and taxpayer identification number (generally the social security number) of each qualifying person. Free 2012 tax filing online See Taxpayer identification number under Qualifying Person Test, later. Free 2012 tax filing online You may have to pay employment taxes. Free 2012 tax filing online  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. Free 2012 tax filing online Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. Free 2012 tax filing online See Employment Taxes for Household Employers , later. Free 2012 tax filing online Introduction This chapter discusses the credit for child and dependent care expenses and covers the following topics. Free 2012 tax filing online Tests you must meet to claim the credit. Free 2012 tax filing online How to figure the credit. Free 2012 tax filing online How to claim the credit. Free 2012 tax filing online Employment taxes you may have to pay as a household employer. Free 2012 tax filing online You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. Free 2012 tax filing online The credit can be up to 35% of your expenses. Free 2012 tax filing online To qualify, you must pay these expenses so you can work or look for work. Free 2012 tax filing online This credit should not be confused with the child tax credit discussed in chapter 34. Free 2012 tax filing online Dependent care benefits. Free 2012 tax filing online   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. Free 2012 tax filing online You must complete Form 2441, Part III, before you can figure the amount of your credit. Free 2012 tax filing online See Dependent Care Benefits under How To Figure the Credit, later. Free 2012 tax filing online Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 503 Child and Dependent Care Expenses 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-7 Application for IRS Individual Taxpayer Identification Number W-10 Dependent Care Provider's Identification and Certification Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040 or Form 1040A, not Form 1040EZ, and meet all the following tests. Free 2012 tax filing online The care must be for one or more qualifying persons who are identified on Form 2441. Free 2012 tax filing online (See Qualifying Person Test . Free 2012 tax filing online ) You (and your spouse if filing jointly) must have earned income during the year. Free 2012 tax filing online (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. Free 2012 tax filing online ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. Free 2012 tax filing online (See Work-Related Expense Test , later. Free 2012 tax filing online ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. Free 2012 tax filing online If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. Free 2012 tax filing online You cannot make payments to: Your spouse, or The parent of your qualifying person if your qualifying person is your child and under age 13. Free 2012 tax filing online (See Payments to Relatives or Dependents under Work-Related Expense Test, later. Free 2012 tax filing online ) Your filing status may be single, head of household, or qualifying widow(er) with dependent child. Free 2012 tax filing online If you are married, you must file a joint return, unless an exception applies to you. Free 2012 tax filing online (See Joint Return Test , later. Free 2012 tax filing online ) You must identify the care provider on your tax return. Free 2012 tax filing online (See Provider Identification Test , later. Free 2012 tax filing online ) If you exclude or deduct dependent care benefits provided by a dependent care benefits plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). Free 2012 tax filing online (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. Free 2012 tax filing online See Reduced Dollar Limit under How To Figure the Credit, later. Free 2012 tax filing online ) These tests are presented in Figure 32-A and are also explained in detail in this chapter. Free 2012 tax filing online Figure 32-A. Free 2012 tax filing online Can You Claim the Credit? Please click here for the text description of the image. Free 2012 tax filing online Figure 32-A Can You Claim the Credit? Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. Free 2012 tax filing online A qualifying person is: Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later), Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Free 2012 tax filing online Dependent defined. Free 2012 tax filing online   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. Free 2012 tax filing online To be your dependent, a person must be your qualifying child (or your qualifying relative). Free 2012 tax filing online Qualifying child. Free 2012 tax filing online   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. Free 2012 tax filing online More information. Free 2012 tax filing online   For more information about who is a dependent or a qualifying child, see chapter 3. Free 2012 tax filing online Physically or mentally not able to care for oneself. Free 2012 tax filing online   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. Free 2012 tax filing online Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. Free 2012 tax filing online Person qualifying for part of year. Free 2012 tax filing online   You determine a person's qualifying status each day. Free 2012 tax filing online For example, if the person for whom you pay child and dependent care expenses no longer qualifies on September 16, count only those expenses through September 15. Free 2012 tax filing online Also see Yearly limit under Dollar Limit, later. Free 2012 tax filing online Birth or death of otherwise qualifying person. Free 2012 tax filing online   In determining whether a person is a qualifying person, a person who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the person's home for more than half the time he or she was alive in 2013. Free 2012 tax filing online Taxpayer identification number. Free 2012 tax filing online   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). Free 2012 tax filing online If the correct information is not shown, the credit may be reduced or disallowed. Free 2012 tax filing online Individual taxpayer identification number (ITIN) for aliens. Free 2012 tax filing online   If your qualifying person is a nonresident or resident alien who does not have and cannot get a social security number (SSN), use that person's ITIN. Free 2012 tax filing online The ITIN is entered wherever an SSN is requested on a tax return. Free 2012 tax filing online To apply for an ITIN, see Form W-7. Free 2012 tax filing online   An ITIN is for tax use only. Free 2012 tax filing online It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. Free 2012 tax filing online S. Free 2012 tax filing online law. Free 2012 tax filing online Adoption taxpayer identification number (ATIN). Free 2012 tax filing online   If your qualifying person is a child who was placed in your home for adoption and for whom you do not have an SSN, you must get an ATIN for the child. Free 2012 tax filing online File Form W-7A, Application for Taxpayer Identification Number for Pending U. Free 2012 tax filing online S. Free 2012 tax filing online Adoptions. Free 2012 tax filing online Child of divorced or separated parents or parents living apart. Free 2012 tax filing online   Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if: The child was under age 13 or was not physically or mentally able to care for himself or herself, The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year, The child was in the custody of one or both parents for more than half the year, and You were the child's custodial parent. Free 2012 tax filing online   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. Free 2012 tax filing online If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. Free 2012 tax filing online For details and an exception for a parent who works at night, see Pub. Free 2012 tax filing online 501. Free 2012 tax filing online   The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. Free 2012 tax filing online Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. Free 2012 tax filing online Earned income. Free 2012 tax filing online   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. Free 2012 tax filing online A net loss from self-employment reduces earned income. Free 2012 tax filing online Earned income also includes strike benefits and any disability pay you report as wages. Free 2012 tax filing online   Generally, only taxable compensation is included. Free 2012 tax filing online However, you can elect to include nontaxable combat pay in earned income. Free 2012 tax filing online If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Free 2012 tax filing online (In other words, if one of you makes the election, the other one can also make it but does not have to. Free 2012 tax filing online ) You should figure your credit both ways and make the election if it gives you a greater tax benefit. Free 2012 tax filing online Members of certain religious faiths opposed to social security. Free 2012 tax filing online   Certain income earned by persons who are members of certain religious faiths that are opposed to participation in Social Security Act programs and have an IRS-approved form that exempts certain income from social security and Medicare taxes may not be considered earned income for this purpose. Free 2012 tax filing online See Earned Income Test in Publication 503. Free 2012 tax filing online Not earned income. Free 2012 tax filing online   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarship or fellowship grants, except for those reported on a Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received by you, Income of nonresident aliens that is not effectively connected with a U. Free 2012 tax filing online S. Free 2012 tax filing online trade or business, or Any amount received for work while an inmate in a penal institution. Free 2012 tax filing online Rule for student-spouse or spouse not able to care for self. Free 2012 tax filing online   Your spouse is treated as having earned income for any month that he or she is: A full-time student, or Physically or mentally not able to care for himself or herself. Free 2012 tax filing online (Your spouse also must live with you for more than half the year. Free 2012 tax filing online )   If you are filing a joint return, this rule also applies to you. Free 2012 tax filing online You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. Free 2012 tax filing online   Figure the earned income of the nonworking spouse described under (1) or (2) above as explained under Earned Income Limit , later. Free 2012 tax filing online   This rule applies to only one spouse for any one month. Free 2012 tax filing online If, in the same month, both you and your spouse do not work and are either full-time students or not physically or mentally able to care for yourselves, only one of you can be treated as having earned income in that month. Free 2012 tax filing online Full-time student. Free 2012 tax filing online   You are a full-time student if you are enrolled at a school for the number of hours or classes that the school considers full time. Free 2012 tax filing online You must have been a full-time student for some part of each of 5 calendar months during the year. Free 2012 tax filing online (The months need not be consecutive. Free 2012 tax filing online ) School. Free 2012 tax filing online   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. Free 2012 tax filing online A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Free 2012 tax filing online Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. Free 2012 tax filing online Expenses are considered work-related only if both of the following are true. Free 2012 tax filing online They allow you (and your spouse if filing jointly) to work or look for work. Free 2012 tax filing online They are for a qualifying person's care. Free 2012 tax filing online Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. Free 2012 tax filing online If you are married, generally both you and your spouse must work or look for work. Free 2012 tax filing online One spouse is treated as working during any month he or she is a full-time student or is not physically or mentally able to care for himself or herself. Free 2012 tax filing online Your work can be for others or in your own business or partnership. Free 2012 tax filing online It can be either full time or part time. Free 2012 tax filing online Work also includes actively looking for work. Free 2012 tax filing online However, if you do not find a job and have no earned income for the year, you cannot take this credit. Free 2012 tax filing online See Earned Income Test , earlier. Free 2012 tax filing online An expense is not considered work-related merely because you had it while you were working. Free 2012 tax filing online The purpose of the expense must be to allow you to work. Free 2012 tax filing online Whether your expenses allow you to work or look for work depends on the facts. Free 2012 tax filing online Example 1. Free 2012 tax filing online The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. Free 2012 tax filing online Example 2. Free 2012 tax filing online You work during the day. Free 2012 tax filing online Your spouse works at night and sleeps during the day. Free 2012 tax filing online You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. Free 2012 tax filing online Your expenses are considered work-related. Free 2012 tax filing online Volunteer work. Free 2012 tax filing online    For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. Free 2012 tax filing online Work for part of year. Free 2012 tax filing online   If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. Free 2012 tax filing online For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work-related. Free 2012 tax filing online However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2½ months × $250). Free 2012 tax filing online Temporary absence from work. Free 2012 tax filing online   You do not have to figure your expenses for each day during a short, temporary absence from work, such as for vacation or a minor illness, if you have to pay for care anyway. Free 2012 tax filing online Instead, you can figure your credit including the expenses you paid for the period of absence. Free 2012 tax filing online   An absence of 2 weeks or less is a short, temporary absence. Free 2012 tax filing online An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. Free 2012 tax filing online Example. Free 2012 tax filing online You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. Free 2012 tax filing online You become ill and miss 4 months of work but receive sick pay. Free 2012 tax filing online You continue to pay the nanny to care for the children while you are ill. Free 2012 tax filing online Your absence is not a short, temporary absence, and your expenses are not considered work-related. Free 2012 tax filing online Part-time work. Free 2012 tax filing online   If you work part-time, you generally must figure your expenses for each day. Free 2012 tax filing online However, if you have to pay for care weekly, monthly, or in another way that includes both days worked and days not worked, you can figure your credit including the expenses you paid for days you did not work. Free 2012 tax filing online Any day when you work at least 1 hour is a day of work. Free 2012 tax filing online Example 1. Free 2012 tax filing online You work 3 days a week. Free 2012 tax filing online While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. Free 2012 tax filing online You can pay the center $150 for any 3 days a week or $250 for 5 days a week. Free 2012 tax filing online Your child attends the center 5 days a week. Free 2012 tax filing online Your work-related expenses are limited to $150 a week. Free 2012 tax filing online Example 2. Free 2012 tax filing online The facts are the same as in Example 1 except the center does not offer a 3-day option. Free 2012 tax filing online The entire $250 weekly fee may be a work-related expense. Free 2012 tax filing online Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. Free 2012 tax filing online You do not have to choose the least expensive way of providing care. Free 2012 tax filing online The cost of a paid care provider may be an expense for the care of a qualifying person even if another care provider is available at no cost. Free 2012 tax filing online Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. Free 2012 tax filing online Expenses for household services qualify if part of the services is for the care of qualifying persons. Free 2012 tax filing online See Household services , later. Free 2012 tax filing online Expenses not for care. Free 2012 tax filing online   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. Free 2012 tax filing online However, you can include small amounts paid for these items if they are incidental to and cannot be separated from the cost of caring for the qualifying person. Free 2012 tax filing online   Child support payments are not for care and do not qualify for the credit. Free 2012 tax filing online Education. Free 2012 tax filing online   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. Free 2012 tax filing online Expenses to attend kindergarten or a higher grade are not expenses for care. Free 2012 tax filing online Do not use these expenses to figure your credit. Free 2012 tax filing online   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. Free 2012 tax filing online   Summer school and tutoring programs are not for care. Free 2012 tax filing online Example 1. Free 2012 tax filing online You take your 3-year-old child to a nursery school that provides lunch and educational activities as a part of its preschool childcare service. Free 2012 tax filing online The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. Free 2012 tax filing online You can count the total cost when you figure the credit. Free 2012 tax filing online Example 2. Free 2012 tax filing online You place your 10-year-old child in a boarding school so you can work full time. Free 2012 tax filing online Only the part of the boarding school expense that is for the care of your child is a work-related expense. Free 2012 tax filing online You can count that part of the expense in figuring your credit if it can be separated from the cost of education. Free 2012 tax filing online You cannot count any part of the amount you pay the school for your child's education. Free 2012 tax filing online Care outside your home. Free 2012 tax filing online   You can count the cost of care provided outside your home if the care is for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours each day in your home. Free 2012 tax filing online Dependent care center. Free 2012 tax filing online   You can count care provided outside your home by a dependent care center only if the center complies with all state and local regulations that apply to these centers. Free 2012 tax filing online   A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center is not run for profit. Free 2012 tax filing online Camp. Free 2012 tax filing online   The cost of sending your child to an overnight camp is not considered a work-related expense. Free 2012 tax filing online The cost of sending your child to a day camp may be a work-related expense, even if the camp specializes in a particular activity, such as computers or soccer. Free 2012 tax filing online Transportation. Free 2012 tax filing online   If a care provider takes a qualifying person to or from a place where care is provided, that transportation is for the care of the qualifying person. Free 2012 tax filing online This includes transportation by bus, subway, taxi, or private car. Free 2012 tax filing online However, transportation not provided by a care provider is not for the care of a qualifying person. Free 2012 tax filing online Also, if you pay the transportation cost for the care provider to come to your home, that expense is not for care of a qualifying person. Free 2012 tax filing online Fees and deposits. Free 2012 tax filing online   Fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work-related expenses if you have to pay them to get care, even though they are not directly for care. Free 2012 tax filing online However, a forfeited deposit is not for the care of a qualifying person if care is not provided. Free 2012 tax filing online Example 1. Free 2012 tax filing online You paid a fee to an agency to get the services of the nanny who cares for your 2-year-old daughter while you work. Free 2012 tax filing online The fee you paid is a work-related expense. Free 2012 tax filing online Example 2. Free 2012 tax filing online You placed a deposit with a preschool to reserve a place for your 3-year-old child. Free 2012 tax filing online You later sent your child to a different preschool and forfeited the deposit. Free 2012 tax filing online The forfeited deposit is not for care and so is not a work-related expense. Free 2012 tax filing online Household services. Free 2012 tax filing online   Expenses you pay for household services meet the work-related expense test if they are at least partly for the well-being and protection of a qualifying person. Free 2012 tax filing online   Household services are ordinary and usual services done in and around your home that are necessary to run your home. Free 2012 tax filing online They include the services of a housekeeper, maid, or cook. Free 2012 tax filing online However, they do not include the services of a chauffeur, bartender, or gardener. Free 2012 tax filing online See Household Services in Publication 503 for more information. Free 2012 tax filing online   In this chapter, the term housekeeper refers to any household employee whose services include the care of a qualifying person. Free 2012 tax filing online Taxes paid on wages. Free 2012 tax filing online   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. Free 2012 tax filing online See Employment Taxes for Household Employers , later. Free 2012 tax filing online Payments to Relatives or Dependents You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. Free 2012 tax filing online However, do not count any amounts you pay to: A dependent for whom you (or your spouse if filing jointly) can claim an exemption, Your child who was under age 19 at the end of the year, even if he or she is not your dependent, A person who was your spouse any time during the year, or The parent of your qualifying person if your qualifying person is your child and under age 13. Free 2012 tax filing online Joint Return Test Generally, married couples must file a joint return to take the credit. Free 2012 tax filing online However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. Free 2012 tax filing online Legally separated. Free 2012 tax filing online   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. Free 2012 tax filing online You may be eligible to take the credit on your return using head of household filing status. Free 2012 tax filing online Married and living apart. Free 2012 tax filing online   You are not considered married and are eligible to take the credit if all the following apply. Free 2012 tax filing online You file a return apart from your spouse. Free 2012 tax filing online Your home is the home of a qualifying person for more than half the year. Free 2012 tax filing online You pay more than half the cost of keeping up your home for the year. Free 2012 tax filing online Your spouse does not live in your home for the last 6 months of the year. Free 2012 tax filing online Costs of keeping up a home. Free 2012 tax filing online   The costs of keeping up a home normally include property taxes, mortgage interest, rent, utility charges, home repairs, insurance on the home, and food eaten at home. Free 2012 tax filing online   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. Free 2012 tax filing online   They also do not include the purchase, permanent improvement, or replacement of property. Free 2012 tax filing online For example, you cannot include the cost of replacing a water heater. Free 2012 tax filing online However, you can include the cost of repairing a water heater. Free 2012 tax filing online Death of spouse. Free 2012 tax filing online   If your spouse died during the year and you do not remarry before the end of the year, you generally must file a joint return to take the credit. Free 2012 tax filing online If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's return. Free 2012 tax filing online Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. Free 2012 tax filing online Use Form 2441, Part I, to show the information. Free 2012 tax filing online If you do not have any care providers and you are filing Form 2441 only to report taxable income in Part III, enter “none” in line 1, column (a). Free 2012 tax filing online Information needed. Free 2012 tax filing online   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. Free 2012 tax filing online   If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. Free 2012 tax filing online If the care provider is an organization, then it is the employer identification number (EIN). Free 2012 tax filing online   You do not have to show the taxpayer identification number if the care provider is a tax-exempt organization (such as a church or school). Free 2012 tax filing online In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. Free 2012 tax filing online   If you cannot provide all of the information or if the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. Free 2012 tax filing online Getting the information. Free 2012 tax filing online   You can use Form W-10 to request the required information from the care provider. Free 2012 tax filing online If you do not use Form W-10, you can get the information from one of the other sources listed in the instructions for Form W-10 including: A copy of the provider's social security card, A copy of the provider's completed Form W-4 if he or she is your household employee, A copy of the statement furnished by your employer if the provider is your employer's dependent care plan, or A letter or invoice from the provider if it shows the information. Free 2012 tax filing online    You should keep this information with your tax records. Free 2012 tax filing online Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. Free 2012 tax filing online Due diligence. Free 2012 tax filing online   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. Free 2012 tax filing online However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. Free 2012 tax filing online   You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. Free 2012 tax filing online Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. Free 2012 tax filing online Provider refusal. Free 2012 tax filing online   If the provider refuses to give you their identifying information, you should report on Form 2441 whatever information you have (such as the name and address). Free 2012 tax filing online Enter “See Attached Statement” in the columns calling for the information you do not have. Free 2012 tax filing online Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. Free 2012 tax filing online Be sure to write your name and social security number on this statement. Free 2012 tax filing online The statement will show that you used due diligence in trying to furnish the necessary information. Free 2012 tax filing online U. Free 2012 tax filing online S. Free 2012 tax filing online citizens and resident aliens living abroad. Free 2012 tax filing online   If you are living abroad, your care provider may not have, and may not be required to get, a U. Free 2012 tax filing online S. Free 2012 tax filing online taxpayer identification number (for example, an SSN or EIN). Free 2012 tax filing online If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. Free 2012 tax filing online How To Figure the Credit Your credit is a percentage of your work-related expenses. Free 2012 tax filing online Your expenses are subject to the earned income limit and the dollar limit. Free 2012 tax filing online The percentage is based on your adjusted gross income. Free 2012 tax filing online Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. Free 2012 tax filing online Expenses prepaid in an earlier year. Free 2012 tax filing online   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. Free 2012 tax filing online Claim the expenses for the later year as if they were actually paid in that later year. Free 2012 tax filing online Expenses not paid until the following year. Free 2012 tax filing online   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. Free 2012 tax filing online You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. Free 2012 tax filing online See Payments for prior year's expenses under Amount of Credit in Publication 503. Free 2012 tax filing online    If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. Free 2012 tax filing online You may be able to claim a credit for them on your 2014 return. Free 2012 tax filing online Expenses reimbursed. Free 2012 tax filing online   If a state social services agency pays you a nontaxable amount to reimburse you for some of your child and dependent care expenses, you cannot count the expenses that are reimbursed as work-related expenses. Free 2012 tax filing online Example. Free 2012 tax filing online You paid work-related expenses of $3,000. Free 2012 tax filing online You are reimbursed $2,000 by a state social services agency. Free 2012 tax filing online You can use only $1,000 to figure your credit. Free 2012 tax filing online Medical expenses. Free 2012 tax filing online   Some expenses for the care of qualifying persons who are not able to care for themselves may qualify as work-related expenses and also as medical expenses. Free 2012 tax filing online You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. Free 2012 tax filing online   If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. Free 2012 tax filing online However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. Free 2012 tax filing online    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. Free 2012 tax filing online Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. Free 2012 tax filing online See Reduced Dollar Limit , later. Free 2012 tax filing online But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. Free 2012 tax filing online Dependent care benefits. Free 2012 tax filing online   Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. Free 2012 tax filing online Your salary may have been reduced to pay for these benefits. Free 2012 tax filing online If you received benefits as an employee, they should be shown in box 10 of your Form W-2. Free 2012 tax filing online See Statement for employee , later. Free 2012 tax filing online Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. Free 2012 tax filing online Enter the amount of these benefits on Form 2441, Part III, line 12. Free 2012 tax filing online Exclusion or deduction. Free 2012 tax filing online   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Free 2012 tax filing online Your employer can tell you whether your benefit plan qualifies. Free 2012 tax filing online To claim the exclusion, you must complete Part III of Form 2441. Free 2012 tax filing online You cannot use Form 1040EZ. Free 2012 tax filing online   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. Free 2012 tax filing online Therefore, you would not get an exclusion from wages. Free 2012 tax filing online Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. Free 2012 tax filing online To claim the deduction, you must use Form 2441. Free 2012 tax filing online   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). Free 2012 tax filing online The definition of earned income for the exclusion or deduction is the same as the definition used when figuring the credit except that earned income for the exclusion or deduction does not include any dependent care benefits you receive. Free 2012 tax filing online See Earned Income Limit, later. Free 2012 tax filing online    You can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit or the credit for child and dependent care expenses. Free 2012 tax filing online Statement for employee. Free 2012 tax filing online   Your employer must give you a Form W-2 (or similar statement) showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. Free 2012 tax filing online Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. Free 2012 tax filing online Effect of exclusion on credit. Free 2012 tax filing online   If you exclude dependent care benefits from your income, the amount of the excluded benefits: Is not included in your work-related expenses, and Reduces the dollar limit, discussed later. Free 2012 tax filing online Earned Income Limit The amount of work-related expenses you use to figure your credit cannot be more than: Your earned income for the year if you are single at the end of the year, or The smaller of your or your spouse's earned income for the year if you are married at the end of the year. Free 2012 tax filing online Earned income is defined under Earned Income Test , earlier. Free 2012 tax filing online For purposes of item (2), use your spouse's earned income for the entire year, even if you were married for only part of the year. Free 2012 tax filing online Separated spouse. Free 2012 tax filing online   If you are legally separated or married and living apart from your spouse (as described under Joint Return Test , earlier), you are not considered married for purposes of the earned income limit. Free 2012 tax filing online Use only your income in figuring the earned income limit. Free 2012 tax filing online Surviving spouse. Free 2012 tax filing online   If your spouse died during the year and you file a joint return as a surviving spouse, you may, but are not required to, take into account the earned income of your spouse who died during the year. Free 2012 tax filing online Community property laws. Free 2012 tax filing online   You should disregard community property laws when you figure earned income for this credit. Free 2012 tax filing online You or your spouse is a student or not able to care for self. Free 2012 tax filing online   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. Free 2012 tax filing online His or her earned income for each month is considered to be at least $250 if there is one qualifying person in your home, or at least $500 if there are two or more. Free 2012 tax filing online Spouse works. Free 2012 tax filing online   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. Free 2012 tax filing online Spouse qualifies for part of month. Free 2012 tax filing online    If your spouse is a full-time student or not able to care for himself or herself for only part of a month, the full $250 (or $500) still applies for that month. Free 2012 tax filing online You are a student or not able to care for self. Free 2012 tax filing online   These rules also apply if you are a student or not able to care for yourself and you are filing a joint return. Free 2012 tax filing online For each month or part of a month you are a student or not able to care for yourself, your earned income is considered to be at least $250 (or $500). Free 2012 tax filing online If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. Free 2012 tax filing online Both spouses qualify. Free 2012 tax filing online   If, in the same month, both you and your spouse are either full-time students or not able to care for yourselves, only one spouse can be considered to have this earned income of $250 (or $500) for that month. Free 2012 tax filing online Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. Free 2012 tax filing online This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. Free 2012 tax filing online If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. Free 2012 tax filing online This $6,000 limit does not need to be divided equally among them. Free 2012 tax filing online For example, if your work-related expenses for the care of one qualifying person are $3,200 and your work-related expenses for another qualifying person are $2,800, you can use the total, $6,000, when figuring the credit. Free 2012 tax filing online Yearly limit. Free 2012 tax filing online   The dollar limit is a yearly limit. Free 2012 tax filing online The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. Free 2012 tax filing online Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. Free 2012 tax filing online Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. Free 2012 tax filing online Reduced Dollar Limit If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you. Free 2012 tax filing online Your reduced dollar limit is figured on Form 2441, Part III. Free 2012 tax filing online See Dependent Care Benefits , earlier, for information on excluding or deducting these benefits. Free 2012 tax filing online Example 1. Free 2012 tax filing online George is a widower with one child and earns $24,000 a year. Free 2012 tax filing online He pays work-related expenses of $2,900 for the care of his 4-year-old child and qualifies to claim the credit for child and dependent care expenses. Free 2012 tax filing online His employer pays an additional $1,000 under a dependent care benefit plan. Free 2012 tax filing online This $1,000 is excluded from George's income. Free 2012 tax filing online Although the dollar limit for his work-related expenses is $3,000 (one qualifying person), George figures his credit on only $2,000 of the $2,900 work-related expenses he paid. Free 2012 tax filing online This is because his dollar limit is reduced as shown next. Free 2012 tax filing online   George's Reduced Dollar Limit 1) Maximum allowable expenses for one qualifying person $3,000 2) Minus: Dependent care benefits George excludes from income −1,000 3) Reduced dollar limit on expenses George can use for the credit $2,000 Example 2. Free 2012 tax filing online Randall is married and both he and his wife are employed. Free 2012 tax filing online Each has earned income in excess of $6,000. Free 2012 tax filing online They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. Free 2012 tax filing online Randall's work-related expenses are $6,000 for the year. Free 2012 tax filing online Randall's employer has a dependent care assistance program as part of its cafeteria plan, which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. Free 2012 tax filing online Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. Free 2012 tax filing online Although the dollar limit for his work- related expenses is $6,000 (two or more qualifying persons), Randall figures his credit on only $1,000 of the $6,000 work-related expense paid. Free 2012 tax filing online This is because his dollar limit is reduced as shown next. Free 2012 tax filing online   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits Randall selects from employer's cafeteria plan and excludes from income −5,000 3) Reduced dollar limit on expenses Randall can use for the credit $1,000 Amount of Credit To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. Free 2012 tax filing online This percentage depends on your adjusted gross income shown on Form 1040, line 38, or Form 1040A, line 22. Free 2012 tax filing online The following table shows the percentage to use based on adjusted gross income. Free 2012 tax filing online   IF your adjusted gross income is: THEN the percentage is:       Over   But not over         $0   $15,000   35%       15,000   17,000   34%       17,000   19,000   33%       19,000   21,000   32%       21,000   23,000   31%       23,000   25,000   30%       25,000   27,000   29%       27,000   29,000   28%       29,000   31,000   27%       31,000   33,000   26%       33,000   35,000   25%       35,000   37,000   24%       37,000   39,000   23%       39,000   41,000   22%       41,000   43,000   21%       43,000   No limit   20%   How To Claim the Credit To claim the credit, you can file Form 1040 or Form 1040A. Free 2012 tax filing online You cannot claim the credit on Form 1040EZ. Free 2012 tax filing online Form 1040 or 1040A. Free 2012 tax filing online   You must complete Form 2441 and attach it to your Form 1040 or 1040A. Free 2012 tax filing online Enter the credit on Form 1040, line 48, or Form 1040A, line 29. Free 2012 tax filing online Limit on credit. Free 2012 tax filing online   The amount of credit you can claim is generally limited to the amount of your tax. Free 2012 tax filing online For more information, see the Instructions for Form 2441. Free 2012 tax filing online Tax credit not refundable. Free 2012 tax filing online   You cannot get a refund for any part of the credit that is more than this limit. Free 2012 tax filing online Recordkeeping. Free 2012 tax filing online You should keep records of your work-related expenses. Free 2012 tax filing online Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and the length of the disability. Free 2012 tax filing online Other records you should keep to support your claim for the credit are described earlier under Provider Identification Test . Free 2012 tax filing online Employment Taxes for Household Employers If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. Free 2012 tax filing online If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. Free 2012 tax filing online If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. Free 2012 tax filing online Self-employed persons who are in business for themselves are not household employees. Free 2012 tax filing online Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. Free 2012 tax filing online If you use a placement agency that exercises control over what work is done and how it will be done by a babysitter or companion who works in your home, the worker is not your employee. Free 2012 tax filing online This control could include providing rules of conduct and appearance and requiring regular reports. Free 2012 tax filing online In this case, you do not have to pay employment taxes. Free 2012 tax filing online But, if an agency merely gives you a list of sitters and you hire one from that list, and pay the sitter directly, the sitter may be your employee. Free 2012 tax filing online If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. Free 2012 tax filing online Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. Free 2012 tax filing online Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. Free 2012 tax filing online Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. Free 2012 tax filing online For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. Free 2012 tax filing online State employment tax. Free 2012 tax filing online   You may also have to pay state unemployment tax. Free 2012 tax filing online Contact your state unemployment tax office for information. Free 2012 tax filing online You should also find out whether you need to pay or collect other state employment taxes or carry workers' compensation insurance. Free 2012 tax filing online For a list of state unemployment tax agencies, visit the U. Free 2012 tax filing online S. Free 2012 tax filing online Department of Labor's website. Free 2012 tax filing online A link to that website is in Publication 926, or you can find it with an online search. Free 2012 tax filing online Prev  Up  Next   Home   More Online Publications