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Free tax filing online Part Six -   Cómo Calcular los Impuestos y Créditos Los ocho capítulos de esta sección explican cómo calcular sus impuestos y cómo calcular los impuestos de determinados hijos con ingresos no derivados del trabajo de $2,000 o más. Free tax filing online Explican también créditos tributarios que, a diferencia de las deducciones, se restan directamente de los impuestos y los disminuyen, dólar por dólar. Free tax filing online El capítulo 36 trata sobre el crédito por ingreso del trabajo y el capítulo 37 abarca una amplia gama de otros créditos, como por ejemplo, el crédito por adopción. Free tax filing online Table of Contents 30. Free tax filing online   Cómo Calcular los ImpuestosIntroduction Cómo Calcular los Impuestos Impuesto Mínimo Alternativo (AMT) Impuestos Calculados por el IRS Cómo Presentar la Declaración 31. Free tax filing online   Impuesto sobre Ingresos No Derivados del Trabajo de Determinados Hijos¿Que Hay de Nuevo? Introduction Useful Items - You may want to see: Cómo Saber si se Tiene que Utilizar la Declaración del Padre o de la MadrePadres que no Presentan la Declaración Conjunta Elección de los Padres de Declarar los Intereses y Dividendos del HijoConsecuencias de Incluir los Ingresos del Hijo Cómo Calcular los Ingresos del Hijo Cómo Calcular el Impuesto Adicional Impuesto para Determinados Hijos con Ingresos No Derivados del TrabajoCómo Facilitar Información sobre los Padres (líneas A-C del Formulario 8615) Paso 1. Free tax filing online Cómo Calcular los Ingresos Netos No Derivados del Trabajo del Hijo (Parte I del Formulario 8615) Paso 2. Free tax filing online Cómo Calcular el Impuesto Provisional a la Tasa Impositiva de los Padres (Parte II del Formulario 8615) Paso 3. Free tax filing online Cómo Calcular el Impuesto del Hijo (Parte III del Formulario 8615) 32. Free tax filing online   Crédito por Gastos del Cuidado de Menores y DependientesRecordatorios Introduction Useful Items - You may want to see: Requisitos Para Reclamar el CréditoRequisitos de la Persona Calificada Requisito del Ingreso del Trabajo Requisito de Gastos Relacionados con el Trabajo Requisito de la Declaración Conjunta Requisito de Identificación del Proveedor de Cuidados Cómo Calcular el CréditoCómo Calcular el Total de los Gastos Relacionados con el Trabajo Límite del Ingreso del Trabajo Límite de Dinero Cantidad de Crédito Cómo Reclamar el CréditoCrédito tributario no reembolsable. Free tax filing online Impuestos sobre la Nómina para Empleadores de Empleados Domésticos 33. Free tax filing online   Crédito para Ancianos o Personas IncapacitadasIntroduction Useful Items - You may want to see: ¿Reúne los Requisitos del Crédito?Persona que Reúne los Requisitos Límites sobre los Ingresos Cómo Reclamar el CréditoEl Crédito Calculado por el IRS El Crédito Calculado por Usted Mismo 34. Free tax filing online   Crédito Tributario por HijosIntroduction Useful Items - You may want to see: Hijo Calificado Cantidad de CréditoLímites del Crédito Cómo Reclamar el Crédito Crédito Tributario Adicional por Hijos Cómo Completar el Anexo 8812 (Formulario 1040A o Formulario 1040)Parte I Partes II a IV 35. Free tax filing online   Créditos Tributarios por EstudiosIntroduction Useful Items - You may want to see: ¿Quién Puede Reclamar un Crédito Tributario por Estudios? Gastos de Estudios CalificadosNo se Permite Beneficio Doble Ajustes a los Gastos de Estudios Calificados 36. Free tax filing online   Crédito por Ingreso del Trabajo (EIC) Qué Hay de Nuevo Recordatorios Introduction Useful Items - You may want to see: ¿Reúne los Requisitos para el Crédito?Si se Hizo una Solicitud Indebida del Crédito en un Año Anterior Parte A. Free tax filing online Requisitos para TodosRequisito 1. Free tax filing online Tiene que Tener Ingresos Brutos Ajustados Inferiores a: Requisito 2. Free tax filing online Tiene que tener un número de Seguro Social válido Requisito 3. Free tax filing online Su Estado Civil para Efectos de la Declaración no Puede Ser Casado que Presenta la Declaración por Separado Requisito 4. Free tax filing online Tiene que Ser Ciudadano o Extranjero Residente de los Estados Unidos Durante Todo el Año Requisito 5. Free tax filing online No Puede Presentar el Formulario 2555 ni el Formulario 2555-EZ Requisito 6. Free tax filing online Tiene que Tener Ingresos de Inversiones de $3,300 o Menos Requisito 7. Free tax filing online Tiene que Haber Recibido Ingresos del Trabajo Parte B. Free tax filing online Requisitos si Tiene un Hijo CalificadoRequisito 8. Free tax filing online Su Hijo Tiene que Cumplir los Requisitos de Parentesco, Edad, Residencia y de la Declaración Conjunta Requisito 9. Free tax filing online Para Reclamar el Crédito por Ingreso del Trabajo, Sólo una Persona Puede Basarse en el Hijo Calificado de Usted Requisito 10. Free tax filing online Otro Contribuyente no Puede Reclamarlo a Usted como Hijo Calificado Parte C. Free tax filing online Requisitos si no Tiene un Hijo CalificadoRequisito 11. Free tax filing online Tiene que Tener por lo Menos 25 Años pero Menos de 65 Años Requisito 12. Free tax filing online No Puede Ser el Dependiente de Otra Persona Requisito 13. Free tax filing online Otro Contribuyente no Puede Reclamarlo a Usted como Hijo Calificado Requisito 14. Free tax filing online Tiene que Haber Vivido en los Estados Unidos durante más de la Mitad del Año Parte D. Free tax filing online Cómo Calcular y Reclamar el Crédito por Ingreso del TrabajoRequisito 15. Free tax filing online Su Ingreso del Trabajo Tiene que Ser Menos de: El IRS Puede Calcularle el Crédito por Ingreso del Trabajo Cómo Calcular Usted Mismo el Crédito por Ingreso del Trabajo EjemplosEjemplo 1. Free tax filing online Juan y Julia Martínez (Formulario 1040A) Ejemplo 2. Free tax filing online Carla Robles (Formulario 1040EZ) 37. Free tax filing online   Otros CréditosQué Hay de Nuevo Introduction Useful Items - You may want to see: Créditos no ReembolsablesCrédito por Adopción Crédito por Vehículo Motorizado Alternativo Crédito por Bienes de Reabastecimiento de Vehículos con Combustible Alternativo Crédito para Titulares de Bonos de Crédito Tributario Crédito por Impuestos Extranjeros Crédito por Intereses Hipotecarios Crédito no Reembolsable del Impuesto Mínimo de Años Anteriores Crédito por Vehículos Enchufables con Motor de Dirección Eléctrica Créditos por Energía de la Propiedad Residencial Crédito por Aportaciones a Cuentas de Ahorro para la Jubilación (Crédito del Ahorrador) Créditos ReembolsablesCrédito por el Impuesto sobre Ganancias de Capital no Distribuidas Crédito Tributario por Cobertura del Seguro Médico Crédito por Retención en Exceso del Impuesto del Seguro Social o del Impuesto de la Jubilación Ferroviaria Prev  Up  Next   Home   More Online Publications
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Fuel Tax Credit Extensions Frequently Asked Questions

American Taxpayer Relief Act of 2012 (Pub. L. 112-240)

The American Taxpayer Relief Act of 2012 (Pub. L. 112-240) retroactively extends certain fuel tax credits that expired on Dec. 31, 2011. The retroactively extended fuel tax credits are the biodiesel mixture credit, biodiesel credit, alternative fuel credit and alternative fuel mixture credit. These credits are now scheduled to expire on Dec. 31, 2013.

These Q&As tell taxpayers how to claim the credits for qualifying sales or uses during 2012. They also describe changes to the cellulosic biofuel credit for 2013. 

More information on qualification for the credits is on Form 720, Quarterly Federal Excise Tax Return; Form 720X, Amended Quarterly Federal Excise Tax Return; Form 4136, Credit for Federal Tax Paid on Fuels; Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit; Form 8849, Claim for Refund of Excise Taxes; and Form 8864, Biodiesel and Renewable Diesel Fuels Credit.

Q1. How do I claim the biodiesel mixture (including renewable diesel mixture) credit for qualifying sales and uses during 2012? What is the deadline for filing a claim?

A1. Choose one of the following options to claim the credit:

OPTION 1: Follow the procedures in Notice 2013-26. These procedures allow all claims to be made on Form 8849 for all qualifying sales and uses in 2012. These claims must be made by July 1, 2013.

OPTION 2: If you do not make the claim by July 1, 2013, for sales and uses in 2012, follow the procedures below.

If you reported excise tax liability for gasoline, diesel fuel, or kerosene on Form 720 during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.

    • To amend your Form 720, file Form 720X in accordance with the instructions to that form.
    • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
    • If your biodiesel mixture (including renewable diesel mixture) credit exceeds the amount that you claim on Form 720X, you may claim that excess as an income tax credit on your 2012 federal income tax return by attaching to the return Form 4136 in accordance with the instructions for that form.
    • Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.

Q2. Do I need to submit Certificates for Biodiesel with my biodiesel mixture claims?

A2. Yes. See the instructions to Form 720, Form 8849, or Form 4136, as appropriate. If you did not receive certificates during 2012, the biodiesel producer may issue them to you now. However, the IRS cannot require biodiesel producers to issue a certificate.

Q3. How do I claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A3. You may claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching to the return Form 8864, in accordance with the instructions for that form. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 8864 to an amended income tax return.

Q4. How do I claim the alternative fuel credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A4. The term “alternative fuel” generally includes:

  • Liquefied petroleum gas.
  • P Series Fuels.
  • Compressed or liquefied natural gas.
  • Liquefied hydrogen.
  • Any liquid fuel which meets certain carbon recapture requirements and that is derived from coal (including peat) through the Fischer-Tropsch process.
  • Compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3)).
  • Liquid fuel derived from biomass (as defined in section 45K(c)(3)).

Choose one of the following options to claim the credit:

OPTION 1: Follow the procedures in Notice 2013-26. These procedures allow all claims to be made on Form 8849 for all qualifying sales and uses in 2012. These claims must be made by July 1, 2013.

OPTION 2: If you do not make the claim by July 1, 2013, for sales and uses in 2012, follow the procedures below.

    • If you reported excise tax liability for alternative fuel on Form 720 during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.
    • To amend your Form 720, file Form 720X in accordance with the instructions to that form.
    • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
    • If your alternative fuel credit exceeds the amount that you claim on Form 720X, you may claim the excess as an income tax credit on your 2012 federal income tax return by attaching to the return Form 4136 in accordance with the instructions for that form.
    • Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.

Q5. How do I claim the alternative fuel mixture credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A5. See below.

  • If you reported excise tax liability for gasoline, diesel fuel or kerosene on Form 720, during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the amount of those liabilities.
  • To amend your Form 720, file Form 720X in accordance with the instructions to the form.
  • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
  • You may claim the alternative fuel mixture credit only up to the amount of your tax liabilities for gasoline, diesel fuel or kerosene.
  • You may not claim any excess alternative fuel mixture credit on your income tax return or receive a payment for that amount. 

Q6. Do I have to be registered by IRS to claim the biodiesel mixture credit (including renewable diesel mixture credit), biodiesel credit (including renewable diesel credit), alternative fuel credit or alternative fuel mixture credit?

A6. You must be registered by the IRS at the time you file your claims for the alternative fuel credit and the alternative fuel mixture credit.

If you are already registered with an AL (alternative fuel) or AM (alternative fuel mixture) activity letter, as appropriate, do not apply again for registration. 

However, if you are not already registered by the IRS with the appropriate activity letter, apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.

Q7. How do I claim the cellulosic biofuel credit for qualifying sales or uses during 2012?

A7. You may claim the cellulosic biofuel credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching Form 6478 to the return in accordance with the instructions for that form.

You must be registered by the IRS at the time you file your claim for the cellulosic biofuel credit.

If you are already registered with a CB (producers of cellulosic biofuel) activity letter, do not apply again for registration. However, if you are not already registered by the IRS with the CB activity letter, you may apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.

Q8. What changes did the American Taxpayer Relief Act make to the cellulosic biofuel credit?

A8. Effective Jan. 3, 2013, the Act changed the designation of the credit to “second generation biofuel credit.” Also effective on Jan. 3, 2013, biofuels produced from algae, cyanobacteria, and lemna feedstocks are eligible for the credit. The second generation biofuel credit expires for fuel produced after Dec. 31, 2013.

Q9. If I am a second generation biofuel producer, do I need to be registered by the IRS to claim the credit?

A9. Yes, you must be registered by the IRS at the time you file your claims for second generation biofuel credit. Apply for activity letter “CB” using Form 637. If you are already registered by the IRS with a CB activity letter, do not apply again for registration.

Related Item: IRS Forms and Publications

Page Last Reviewed or Updated: 07-Mar-2014

The Free Tax Filing Online

Free tax filing online 1. Free tax filing online   Bona Fide Residence Table of Contents Presence TestDays of Presence in the United States or Relevant Possession Significant Connection Tax HomeExceptions Closer ConnectionException for Year of Move Special Rules in the Year of a MoveYear of Moving to a Possession Year of Moving From a Possession Reporting a Change in Bona Fide ResidenceWho Must File Penalty for Not Filing Form 8898 In order to qualify for certain tax benefits (see chapter 3), you must be a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI for the entire tax year. Free tax filing online Generally, you are a bona fide resident of one of these possessions (the relevant possession) if, during the tax year, you: Meet the presence test, Do not have a tax home outside the relevant possession, and Do not have a closer connection to the United States or to a foreign country than to the relevant possession. 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Free tax filing online As a result, the amount of income tax withholding (from Form(s) W-2, Wage and Tax Statement) that you are able to claim on your federal return, as well as the need to file a state or U. Free tax filing online S. Free tax filing online possession return, may be affected. Free tax filing online For more information, consult with state, local, or U. Free tax filing online S. Free tax filing online possession tax authorities regarding your tax obligations under MSRRA. Free tax filing online Presence Test If you are a U. Free tax filing online S. Free tax filing online citizen or resident alien, you will satisfy the presence test for the entire tax year if you meet one of the following conditions. Free tax filing online You were present in the relevant possession for at least 183 days during the tax year. 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Free tax filing online   Conditions (1) through (5) above do not apply to nonresident aliens of the United States. Free tax filing online Instead, nonresident aliens must meet the substantial presence test discussed in chapter 1 of Publication 519. Free tax filing online In that discussion, substitute the name of the possession for “United States” and “U. Free tax filing online S. Free tax filing online ” wherever they appear. Free tax filing online Disregard the discussion in that chapter about a Closer Connection to a Foreign Country. Free tax filing online Days of Presence in the United States or Relevant Possession Generally, you are treated as being present in the United States or in the relevant possession on any day that you are physically present in that location at any time during the day. Free tax filing online Days of presence in a possession. Free tax filing online   You are considered to be present in the relevant possession on any of the following days. Free tax filing online Any day you are physically present in that possession at any time during the day. Free tax filing online Any day you are outside of the relevant possession in order to receive, or to accompany any of the following family members to receive, qualifying medical treatment (see Qualifying Medical Treatment , later). Free tax filing online Your parent. Free tax filing online Your spouse. Free tax filing online Your child, who is your son, daughter, stepson, or stepdaughter. Free tax filing online This includes an adopted child or child lawfully placed with you for legal adoption. Free tax filing online This also includes a foster child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Free tax filing online Any day you are outside the relevant possession because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. Free tax filing online   If, during a single day, you are physically present: In the United States and in the relevant possession, that day is considered a day of presence in the relevant possession; or In two possessions, that day is considered a day of presence in the possession where your tax home is located (see Tax Home , later). Free tax filing online Days of presence in the United States. Free tax filing online   You are considered to be present in the United States on any day that you are physically present in the United States at any time during the day. Free tax filing online However, do not count the following days as days of presence in the United States. Free tax filing online Any day you are temporarily present in the United States in order to receive, or to accompany a parent, spouse, or child who is receiving, qualifying medical treatment. Free tax filing online “Child” is defined under item 2c earlier. Free tax filing online “Qualifying medical treatment” is defined later. Free tax filing online Any day you are temporarily present in the United States because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. Free tax filing online Any day you are in the United States for less than 24 hours when you are traveling between two places outside the United States. Free tax filing online Any day you are temporarily present in the United States as a professional athlete to compete in a charitable sports event (defined later). Free tax filing online Any day you are temporarily in the United States as a student (defined later). Free tax filing online Any day you are in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). Free tax filing online Qualifying Medical Treatment Such treatment is generally provided by (or under the supervision of) a physician for an illness, injury, impairment, or physical or mental condition. Free tax filing online The treatment generally involves: Any period of inpatient care that requires an overnight stay in a hospital or hospice, and any period immediately before or after that inpatient care to the extent it is medically necessary, or Any temporary period of inpatient care in a residential medical care facility for medically necessary rehabilitation services. Free tax filing online With respect to each qualifying medical treatment, you must prepare (or obtain) and maintain documentation supporting your claim that such treatment meets the criteria to be considered days of presence in the relevant possession. Free tax filing online You must be able to produce this documentation within 30 days if requested by the IRS or tax administrator for the relevant possession. Free tax filing online You must keep the following documentation. Free tax filing online Records that provide: The patient's name and relationship to you (if the medical treatment is provided to a person you accompany); The name and address of the hospital, hospice, or residential medical care facility where the medical treatment was provided; The name, address, and telephone number of the physician who provided the medical treatment; The date(s) on which the medical treatment was provided; and Receipt(s) of payment for the medical treatment. Free tax filing online Signed certification by the providing or supervising physician that the medical treatment met the requirements for being qualified medical treatment, and setting forth: The patient's name, A reasonably detailed description of the medical treatment provided by (or under the supervision of) the physician, The dates on which the medical treatment was provided, and The medical facts that support the physician's certification and determination that the treatment was medically necessary. Free tax filing online Charitable Sports Event A charitable sports event is one that meets all of the following conditions. Free tax filing online The main purpose is to benefit a qualified charitable organization. Free tax filing online The entire net proceeds go to charity. Free tax filing online Volunteers perform substantially all the work. Free tax filing online In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in the charitable sports event. Free tax filing online You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. Free tax filing online Student To qualify as a student, you must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by a school described in (1) above or by a state, county, or local government agency. Free tax filing online The 5 calendar months do not have to be consecutive. Free tax filing online Full-time student. Free tax filing online   A full-time student is a person who is enrolled for the number of hours or courses the school considers to be full-time attendance. Free tax filing online However, school attendance exclusively at night is not considered full-time attendance. Free tax filing online School. Free tax filing online   The term “school” includes elementary schools, middle schools, junior and senior high schools, colleges, universities, and technical, trade, and mechanical schools. Free tax filing online It does not include on-the-job training courses, correspondence schools, and schools offering courses only through the Internet. Free tax filing online Significant Connection One way in which you can meet the presence test is to have no significant connection to the United States during the tax year. Free tax filing online This section looks at the factors that determine if a significant connection exists. Free tax filing online You are treated as having a significant connection to the United States if you: Have a permanent home in the United States, Are currently registered to vote in any political subdivision of the United States, or Have a spouse or child (see item 2c under Days of presence in a possession , earlier) who is under age 18 whose main home is in the United States, other than: A child who is in the United States because he or she is the child of divorced or legally separated parents and is living with a custodial parent under a custodial decree or multiple support agreement, or A child who is in the United States as a student. Free tax filing online For the purpose of determining if you have a significant connection to the United States, the term “spouse” does not include a spouse from whom you are legally separated under a decree of divorce or separate maintenance. Free tax filing online Permanent home. Free tax filing online   A permanent home generally includes an accommodation such as a house, an apartment, or a furnished room that is either owned or rented by you or your spouse. Free tax filing online The dwelling unit must be available at all times, continuously, not only for short stays. Free tax filing online Exception for rental property. Free tax filing online   If you or your spouse own the dwelling unit and at any time during the tax year it is rented to someone else at fair rental value, it will be considered your permanent home only if you or your spouse use that property for personal purposes for more than the greater of: 14 days, or 10% of the number of days during that tax year that the property is rented to others at a fair rental value. Free tax filing online   You are treated as using rental property for personal purposes on any day the property is not being rented to someone else at fair rental value for the entire day. Free tax filing online   A day of personal use of a dwelling unit is also any day that the unit is used by any of the following persons. Free tax filing online You or any other person who has an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement. Free tax filing online A member of your family or a member of the family of any other person who has an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Free tax filing online Family includes only brothers and sisters, half-brothers and half-sisters, spouses, ancestors (parents, grandparents, etc. Free tax filing online ), and lineal descendants (children, grandchildren, etc. Free tax filing online ). Free tax filing online Anyone under an arrangement that lets you use some other dwelling unit. Free tax filing online Anyone at less than a fair rental price. Free tax filing online   However, any day you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. Free tax filing online Whether your property is used mainly for this purpose is determined in light of all the facts and circumstances, such as: The amount of time you devote to repair and maintenance work, How often during the tax year you perform repair and maintenance work on this property, and The presence and activities of companions. Free tax filing online   See Publication 527, Residential Rental Property, for more information about personal use of a dwelling unit. Free tax filing online Example—significant connection. Free tax filing online Ann Green, a U. Free tax filing online S. Free tax filing online citizen, is a sales representative for a company based in Guam. Free tax filing online Ann lives with her spouse and young children in their house in Guam, where she is also registered to vote. Free tax filing online Her business travel requires her to spend 120 days in the United States and another 120 days in foreign countries. Free tax filing online When traveling on business, Ann generally stays at hotels but sometimes stays with her brother, who lives in the United States. Free tax filing online Ann's stays are always of short duration and she asks her brother's permission to stay with him. Free tax filing online Her brother's house is not her permanent home, nor does she have any other accommodations in the United States that would be considered her permanent home. Free tax filing online Ann satisfies the presence test because she has no significant connection to the United States. Free tax filing online Example—presence test. Free tax filing online Eric and Wanda Brown live for part of the year in a condominium, which they own, in the CNMI. Free tax filing online They also own a house in Maine where they live for 120 days every year to be near their grown children and grandchildren. Free tax filing online The Browns are retired and their only income is from pension payments, dividends, interest, and social security benefits. Free tax filing online In 2013, they spent only 175 days in the CNMI because of a 70-day vacation to Europe and Asia. Free tax filing online Thus, in 2013, the Browns were not present in the CNMI for at least 183 days, were present in the United States for more than 90 days, and had a significant connection to the United States because of their permanent home. Free tax filing online However, the Browns still satisfied the presence test with respect to the CNMI because they had no earned income in the United States and were physically present for more days in the CNMI than in the United States. Free tax filing online Tax Home You will have met the tax home test if you did not have a tax home outside the relevant possession during any part of the tax year. Free tax filing online Your tax home is your regular or main place of business, employment, or post of duty regardless of where you maintain your family home. Free tax filing online If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. Free tax filing online If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Free tax filing online Exceptions There are some special rules regarding tax home that provide exceptions to the general rule stated above. Free tax filing online Students and Government Officials Disregard the following days when determining whether you have a tax home outside the relevant possession. Free tax filing online Days you were temporarily in the United States as a student (see Student under Days of Presence in the United States or Relevant Possession, earlier). Free tax filing online Days you were in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). Free tax filing online Seafarers You will not be considered to have a tax home outside the relevant possession solely because you are employed on a ship or other seafaring vessel that is predominantly used in local and international waters. Free tax filing online For this purpose, a vessel is considered to be predominantly used in local and international waters if, during the tax year, the total amount of time it is used in international waters and in the waters within 3 miles of the relevant possession exceeds the total amount of time it is used in the territorial waters of the United States, another possession, or any foreign country. Free tax filing online Example. Free tax filing online In 2013, Sean Silverman, a U. Free tax filing online S. Free tax filing online citizen, was employed by a fishery and spent 250 days at sea on a fishing vessel. Free tax filing online When not at sea, Sean lived with his spouse at a house they own in American Samoa. Free tax filing online The fishing vessel on which Sean works departs and arrives at various ports in American Samoa, other possessions, and foreign countries, but was in international or American Samoa's local waters for 225 days. Free tax filing online For purposes of determining bona fide residency of American Samoa, Sean will not be considered to have a tax home outside that possession solely because of his employment on board the fishing vessel. Free tax filing online Year of Move If you are moving to or from a possession during the year, you may still be able to meet the tax home test for that year. Free tax filing online See Special Rules in the Year of a Move , later in this chapter. Free tax filing online Closer Connection You will have met the closer connection test if, during any part of the tax year, you do not have a closer connection to the United States or a foreign country than to the relevant U. Free tax filing online S. Free tax filing online possession. Free tax filing online You will be considered to have a closer connection to a possession than to the United States or to a foreign country if you have maintained more significant contacts with the possession(s) than with the United States or foreign country. Free tax filing online In determining if you have maintained more significant contacts with the relevant possession, the facts and circumstances to be considered include, but are not limited to, the following. Free tax filing online The location of your permanent home. Free tax filing online The location of your family. Free tax filing online The location of personal belongings, such as automobiles, furniture, clothing, and jewelry owned by you and your family. Free tax filing online The location of social, political, cultural, professional, or religious organizations with which you have a current relationship. Free tax filing online The location where you conduct your routine personal banking activities. Free tax filing online The location where you conduct business activities (other than those that go into determining your tax home). Free tax filing online The location of the jurisdiction in which you hold a driver's license. Free tax filing online The location of the jurisdiction in which you vote. Free tax filing online The location of charitable organizations to which you contribute. Free tax filing online The country of residence you designate on forms and documents. Free tax filing online The types of official forms and documents you file, such as Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or Form W-9, Request for Taxpayer Identification Number and Certification. Free tax filing online Your connections to the relevant possession will be compared to the total of your connections with the United States and foreign countries. Free tax filing online Your answers to the questions on Form 8898, Part III, will help establish the jurisdiction to which you have a closer connection. Free tax filing online Example—closer connection to the United States. Free tax filing online Marcos Reyes, a U. Free tax filing online S. Free tax filing online citizen, moved to Puerto Rico in 2013 to start an investment consulting and venture capital business. Free tax filing online His spouse and two teenage children remained in California to allow the children to complete high school. Free tax filing online He traveled back to the United States regularly to see his spouse and children, to engage in business activities, and to take vacations. Free tax filing online Marcos had an apartment available for his full-time use in Puerto Rico, but remained a joint owner of the residence in California where his spouse and children lived. Free tax filing online Marcos and his family had automobiles and personal belongings such as furniture, clothing, and jewelry located at both residences. Free tax filing online Although Marcos was a member of the Puerto Rico Chamber of Commerce, he also belonged to and had current relationships with social, political, cultural, and religious organizations in California. Free tax filing online Marcos received mail in California, including bank and brokerage statements and credit card bills. Free tax filing online He conducted his personal banking activities in California. Free tax filing online He held a California driver's license and was also registered to vote there. Free tax filing online Based on all of the particular facts and circumstances pertaining to Marcos, he was not a bona fide resident of Puerto Rico in 2013 because he had a closer connection to the United States than to Puerto Rico. Free tax filing online Closer connection to another possession. Free tax filing online   Generally, possessions are not treated as foreign countries. Free tax filing online Therefore, a closer connection to a possession other than the relevant possession will not be treated as a closer connection to a foreign country. Free tax filing online Example—tax home and closer connection to possession. Free tax filing online Pearl Blackmon, a U. Free tax filing online S. Free tax filing online citizen, is a permanent employee of a hotel in Guam, but works only during the tourist season. Free tax filing online For the remainder of each year, Pearl lives with her spouse and children in the CNMI, where she has no outside employment. Free tax filing online Most of Pearl's personal belongings, including her automobile, are located in the CNMI. Free tax filing online She is registered to vote in, and has a driver's license issued by, the CNMI. Free tax filing online She does her personal banking in the CNMI and routinely lists her CNMI address as her permanent address on forms and documents. Free tax filing online Pearl satisfies the presence test with respect to both Guam and the CNMI. Free tax filing online She satisfies the tax home test with respect to Guam, because her regular place of business is in Guam. Free tax filing online Pearl satisfies the closer connection test with respect to both Guam and the CNMI, because she does not have a closer connection to the United States or to any foreign country. Free tax filing online Pearl is considered a bona fide resident of Guam, the location of her tax home. Free tax filing online Exception for Year of Move If you are moving to or from a possession during the year, you may still be able to meet the closer connection test for that year. Free tax filing online See Special Rules in the Year of a Move , next. Free tax filing online Special Rules in the Year of a Move If you are moving to or from a possession during the year, you may still be able to meet the tax home and closer connection tests for that year. Free tax filing online Year of Moving to a Possession You will satisfy the tax home and closer connection tests in the tax year of changing your residence to the relevant possession if you meet all of the following. Free tax filing online You have not been a bona fide resident of the relevant possession in any of the 3 tax years immediately preceding your move. Free tax filing online In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the last 183 days of the tax year. Free tax filing online You are a bona fide resident of the relevant possession for each of the 3 tax years immediately following your move. Free tax filing online Example. Free tax filing online Dwight Wood, a U. Free tax filing online S. Free tax filing online citizen, files returns on a calendar year basis. Free tax filing online He lived in the United States from January 2007 through May 2013. Free tax filing online In June 2013 he moved to the USVI, purchased a house, and accepted a permanent job with a local employer. Free tax filing online From July 1 through December 31, 2013 (more than 183 days), Dwight's principal place of business was in the USVI and, during that time, he did not have a closer connection to the United States or a foreign country than to the USVI. Free tax filing online If he is a bona fide resident of the USVI during all of 2014 through 2016, he will satisfy the tax home and closer connection tests for 2013. Free tax filing online If Dwight also satisfies the presence test in 2013, he will be considered a bona fide resident of the USVI for the entire 2013 tax year. Free tax filing online Year of Moving From a Possession In the year you cease to be a bona fide resident of American Samoa, the CNMI, Guam, or the USVI, you will satisfy the tax home and closer connection tests with respect to the relevant possession if you meet all of the following. Free tax filing online You have been a bona fide resident of the relevant possession for each of the 3 tax years immediately preceding your change of residence. Free tax filing online In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the first 183 days of the tax year. Free tax filing online You are not a bona fide resident of the relevant possession for any of the 3 tax years immediately following your move. Free tax filing online Example. Free tax filing online Jean Aspen, a U. Free tax filing online S. Free tax filing online citizen, files returns on a calendar year basis. Free tax filing online From January 2010 through December 2012, Jean was a bona fide resident of American Samoa. Free tax filing online Jean continued to live there until September 6, 2013, when she accepted new employment and moved to Hawaii. Free tax filing online Jean's principal place of business from January 1 through September 5, 2013 (more than 183 days), was in American Samoa, and during that period Jean did not have a closer connection to the United States or a foreign country than to American Samoa. Free tax filing online If Jean continues to live and work in Hawaii for the rest of 2013 and throughout years 2014 through 2016, she will satisfy the tax home and closer connection tests for 2013 with respect to American Samoa. Free tax filing online If Jean also satisfies the presence test in 2013, she will be considered a bona fide resident for the entire 2013 tax year. Free tax filing online Puerto Rico You will be considered a bona fide resident of Puerto Rico for the part of the tax year preceding the date on which you move if you: Are a U. Free tax filing online S. Free tax filing online citizen, Are a bona fide resident of Puerto Rico for at least 2 tax years immediately preceding the tax year of the move, Cease to be a bona fide resident of Puerto Rico during the tax year, Cease to have a tax home in Puerto Rico during the tax year, and Have a closer connection to Puerto Rico than to the United States or a foreign country throughout the part of the tax year preceding the date on which you cease to have a tax home in Puerto Rico. Free tax filing online Example. Free tax filing online Randy White, a U. Free tax filing online S. Free tax filing online citizen, files returns on a calendar year basis. Free tax filing online For all of 2011 and 2012, Randy was a bona fide resident of Puerto Rico. Free tax filing online From January through April 2013, Randy continued to reside and maintain his principal place of business in and closer connection to Puerto Rico. Free tax filing online On May 5, 2013, Randy moved and changed his tax home to Nevada. Free tax filing online Later that year he established a closer connection to the United States than to Puerto Rico. Free tax filing online Randy did not satisfy the presence test for 2013 with respect to Puerto Rico, nor the tax home or closer connection tests. Free tax filing online However, because Randy was a bona fide resident of Puerto Rico for at least 2 tax years before he moved to Nevada in 2013, he was a bona fide resident of Puerto Rico from January 1 through May 4, 2013. Free tax filing online Reporting a Change in Bona Fide Residence If you became or ceased to be a bona fide resident of a U. Free tax filing online S. Free tax filing online possession, you may need to file Form 8898. Free tax filing online This applies to the U. Free tax filing online S. Free tax filing online possessions of American Samoa, the CNMI, Guam, Puerto Rico, and the USVI. Free tax filing online Who Must File You must file Form 8898 for the tax year in which you meet both of the following conditions. Free tax filing online Your worldwide gross income (defined below) in that tax year is more than $75,000. Free tax filing online You meet one of the following. Free tax filing online You take a position for U. Free tax filing online S. Free tax filing online tax purposes that you became a bona fide resident of a U. Free tax filing online S. Free tax filing online possession after a tax year for which you filed a U. Free tax filing online S. Free tax filing online income tax return as a citizen or resident alien of the United States but not as a bona fide resident of the possession. Free tax filing online You are a citizen or resident alien of the United States who takes the position for U. Free tax filing online S. Free tax filing online tax purposes that you ceased to be a bona fide resident of a U. Free tax filing online S. Free tax filing online possession after a tax year for which you filed an income tax return (with the IRS, the possession tax authority, or both) as a bona fide resident of the possession. Free tax filing online You take the position for U. Free tax filing online S. Free tax filing online tax purposes that you became a bona fide resident of Puerto Rico or American Samoa after a tax year for which you were required to file an income tax return as a bona fide resident of the CNMI, Guam, or the USVI. Free tax filing online Worldwide gross income. Free tax filing online   Worldwide gross income means all income you received in the form of money, goods, property, and services, including any income from sources outside the United States (even if you can exclude part or all of it) and before any deductions, credits, or rebates. Free tax filing online Example. Free tax filing online You are a U. Free tax filing online S. Free tax filing online citizen who moved to the CNMI in December 2012, but did not become a bona fide resident of that possession until the 2013 tax year. Free tax filing online You must file Form 8898 for the 2013 tax year if your worldwide gross income for that year was more than $75,000. Free tax filing online Penalty for Not Filing Form 8898 If you are required to file Form 8898 for any tax year and you fail to file it, you may owe a penalty of $1,000. Free tax filing online You may also owe this penalty if you do not include all the information required by the form or the form includes incorrect information. Free tax filing online In either case, you will not owe this penalty if you can show that such failure is due to reasonable cause and not willful neglect. Free tax filing online This is in addition to any criminal penalty that may be imposed. 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