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H&r Block Key Code For Free State Filing

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H&r Block Key Code For Free State Filing

H&r block key code for free state filing 3. H&r block key code for free state filing   Lifetime Learning Credit Table of Contents Introduction Can You Claim the CreditWho Can Claim the Credit Who Cannot Claim the Credit What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses Figuring the CreditEffect of the Amount of Your Income on the Amount of Your Credit Claiming the Credit Introduction For 2013, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. H&r block key code for free state filing They are the American opportunity credit and the lifetime learning credit. H&r block key code for free state filing This chapter discusses the lifetime learning credit. H&r block key code for free state filing The American opportunity credit is discussed in chapter 2, The American Opportunity Credit . H&r block key code for free state filing This chapter explains: Who can claim the lifetime learning credit, What expenses qualify for the credit, Who is an eligible student, Who can claim a dependent's expenses, How to figure the credit, How to claim the credit, and When the credit must be repaid. H&r block key code for free state filing What is the tax benefit of the lifetime learning credit. H&r block key code for free state filing   For the tax year, you may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all eligible students. H&r block key code for free state filing There is no limit on the number of years the lifetime learning credit can be claimed for each student. H&r block key code for free state filing   A tax credit reduces the amount of income tax you may have to pay. H&r block key code for free state filing Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. H&r block key code for free state filing The lifetime learning credit is a nonrefundable credit. H&r block key code for free state filing This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you. H&r block key code for free state filing   Your allowable lifetime learning credit may be limited by the amount of your income and the amount of your tax. H&r block key code for free state filing Can you claim more than one education credit this year. H&r block key code for free state filing   For each student, you can elect for any year only one of the credits. H&r block key code for free state filing For example, if you elect to take the lifetime learning credit for a child on your 2013 tax return, you cannot, for that same child, also claim the American opportunity credit for 2013. H&r block key code for free state filing   If you are eligible to claim the lifetime learning credit and you are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. H&r block key code for free state filing   If you pay qualified education expenses for more than one student in the same year, you can choose to take certain credits on a per-student, per-year basis. H&r block key code for free state filing This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. H&r block key code for free state filing Differences between the American opportunity and lifetime learning credits. H&r block key code for free state filing   There are several differences between these two credits. H&r block key code for free state filing For example, you can claim the American opportunity credit for the same student for no more than 4 tax years, but any year in which the Hope Scholarship Credit was claimed counts toward the 4 years. H&r block key code for free state filing However, there is no limit on the number of years for which you can claim a lifetime learning credit based on the same student's expenses. H&r block key code for free state filing The differences between these credits are shown in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 near the end of this publication. H&r block key code for free state filing Overview of the lifetime learning credit. H&r block key code for free state filing   See Table 3-1, Overview of the Lifetime Learning Credit for the basics of the lifetime learning credit. H&r block key code for free state filing The details are discussed in this chapter. H&r block key code for free state filing Can You Claim the Credit The following rules will help you determine if you are eligible to claim the lifetime learning credit on your tax return. H&r block key code for free state filing Who Can Claim the Credit Generally, you can claim the lifetime learning credit if all three of the following requirements are met. H&r block key code for free state filing You pay qualified education expenses of higher education. H&r block key code for free state filing You pay the education expenses for an eligible student. H&r block key code for free state filing The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. H&r block key code for free state filing Table 3-1. H&r block key code for free state filing Overview of the Lifetime Learning Credit Maximum credit Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $127,000 if married filling jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable Nonrefundable—credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available for an unlimited number of years Type of program required Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Available for one or more courses Felony drug conviction Felony drug convictions do not make the student ineligible Qualified expenses Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Note. H&r block key code for free state filing Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. H&r block key code for free state filing “Qualified education expenses” are defined later under Qualified Education Expenses . H&r block key code for free state filing “Eligible students” are defined later under Who Is an Eligible Student . H&r block key code for free state filing A dependent for whom you claim an exemption is defined later under Who Can Claim a Dependent's Expenses . H&r block key code for free state filing You may find Figure 3-1, Can You Claim the Lifetime Learning Credit for 2013 , later, helpful in determining if you can claim a lifetime learning credit on your tax return. H&r block key code for free state filing Who Cannot Claim the Credit You cannot claim the lifetime learning credit for 2013 if any of the following apply. H&r block key code for free state filing Your filing status is married filing separately. H&r block key code for free state filing You are listed as a dependent on another person's tax return (such as your parents'). H&r block key code for free state filing See Who Can Claim a Dependent's Expenses , later. H&r block key code for free state filing Your modified adjusted gross income (MAGI) is $63,000 or more ($127,000 or more in the case of a joint return). H&r block key code for free state filing MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . H&r block key code for free state filing You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. H&r block key code for free state filing More information on nonresident aliens can be found in Publication 519. H&r block key code for free state filing You claim the American Opportunity Credit (see chapter 2) or a Tuition and Fees Deduction (see chapter 6) for the same student in 2013. H&r block key code for free state filing What Expenses Qualify The lifetime learning credit is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. H&r block key code for free state filing Generally, the credit is allowed for qualified education expenses paid in 2013 for an academic period beginning in 2013 or in the first 3 months of 2014. H&r block key code for free state filing For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 credit. H&r block key code for free state filing Academic period. H&r block key code for free state filing   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. H&r block key code for free state filing In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. H&r block key code for free state filing Paid with borrowed funds. H&r block key code for free state filing   You can claim a lifetime learning credit for qualified education expenses paid with the proceeds of a loan. H&r block key code for free state filing You use the expenses to figure the lifetime learning credit for the year in which the expenses are paid, not the year in which the loan is repaid. H&r block key code for free state filing Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account. H&r block key code for free state filing Student withdraws from class(es). H&r block key code for free state filing   You can claim a lifetime learning credit for qualified education expenses not refunded when a student withdraws. H&r block key code for free state filing Qualified Education Expenses For purposes of the lifetime learning credit, qualified education expenses are tuition and certain related expenses required for enrollment in a course at an eligible educational institution. H&r block key code for free state filing The course must be either part of a postsecondary degree program or taken by the student to acquire or improve job skills. H&r block key code for free state filing Eligible educational institution. H&r block key code for free state filing   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. H&r block key code for free state filing S. H&r block key code for free state filing Department of Education. H&r block key code for free state filing It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. H&r block key code for free state filing The educational institution should be able to tell you if it is an eligible educational institution. H&r block key code for free state filing   Certain educational institutions located outside the United States also participate in the U. H&r block key code for free state filing S. H&r block key code for free state filing Department of Education's Federal Student Aid (FSA) programs. H&r block key code for free state filing Related expenses. H&r block key code for free state filing   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution for enrollment or attendance. H&r block key code for free state filing Prepaid expenses. H&r block key code for free state filing   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. H&r block key code for free state filing See Academic period , earlier. H&r block key code for free state filing For example, you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). H&r block key code for free state filing You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). H&r block key code for free state filing In the following examples, assume that each student is an eligible student at an eligible educational institution. H&r block key code for free state filing Example 1. H&r block key code for free state filing   Jackson is a sophomore in University V's degree program in dentistry. H&r block key code for free state filing This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. H&r block key code for free state filing Because the equipment rental fee must be paid to University V for enrollment and attendance, Jackson's equipment rental fee is a qualified expense. H&r block key code for free state filing Example 2. H&r block key code for free state filing   Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. H&r block key code for free state filing The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. H&r block key code for free state filing Charles bought his books from a friend, so what he paid for them is not a qualified education expense. H&r block key code for free state filing Donna bought hers at College W's bookstore. H&r block key code for free state filing Although Donna paid College W directly for her first-year books and materials, her payment is not a qualified expense because the books and materials are not required to be purchased from College W for enrollment or attendance at the institution. H&r block key code for free state filing Example 3. H&r block key code for free state filing   When Marci enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. H&r block key code for free state filing This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and student government. H&r block key code for free state filing No portion of the fee covers personal expenses. H&r block key code for free state filing Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. H&r block key code for free state filing Therefore, it is a qualified expense. H&r block key code for free state filing No Double Benefit Allowed You cannot do any of the following: Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim a lifetime learning credit based on those same expenses. H&r block key code for free state filing Claim a lifetime learning credit in the same year that you are claiming a tuition and fees deduction for the same student. H&r block key code for free state filing Claim a lifetime learning credit and an American opportunity credit based on the same qualified education expenses. H&r block key code for free state filing Claim a lifetime learning credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). H&r block key code for free state filing See Coordination With American Opportunity and Lifetime Learning Credits in chapter 7, Coverdell Education Savings Account, and Coordination With American Opportunity and Lifetime Learning Credits in chapter 8, Qualified Tuition Program. H&r block key code for free state filing Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. H&r block key code for free state filing See Adjustments to Qualified Education Expenses, next. H&r block key code for free state filing This image is too large to be displayed in the current screen. H&r block key code for free state filing Please click the link to view the image. H&r block key code for free state filing Figure 3-1 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. H&r block key code for free state filing The result is the amount of adjusted qualified education expenses for each student. H&r block key code for free state filing Tax-free educational assistance. H&r block key code for free state filing   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. H&r block key code for free state filing See Academic period , earlier. H&r block key code for free state filing   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. H&r block key code for free state filing This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). H&r block key code for free state filing   If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed , later. H&r block key code for free state filing If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed , later. H&r block key code for free state filing   Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. H&r block key code for free state filing Generally, any scholarship or fellowship is treated as tax free. H&r block key code for free state filing However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. H&r block key code for free state filing The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. H&r block key code for free state filing The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. H&r block key code for free state filing You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. H&r block key code for free state filing For examples, see Coordination with Pell grants and other scholarships, later. H&r block key code for free state filing Refunds. H&r block key code for free state filing   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. H&r block key code for free state filing Some tax-free educational assistance received after 2013 may be treated as a refund. H&r block key code for free state filing See Tax-free educational assistance , earlier. H&r block key code for free state filing Refunds received in 2013. H&r block key code for free state filing   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. H&r block key code for free state filing Refunds received after 2013 but before your income tax return is filed. H&r block key code for free state filing   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. H&r block key code for free state filing Refunds received after 2013 and after your income tax return is filed. H&r block key code for free state filing   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. H&r block key code for free state filing See Credit recapture, next. H&r block key code for free state filing Credit recapture. H&r block key code for free state filing    If any tax-free educational assistance for the qualified education expenses paid in 2013 or any refund of your qualified education expenses paid in 2013 is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. H&r block key code for free state filing You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. H&r block key code for free state filing You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). H&r block key code for free state filing Include that amount as an additional tax for the year the refund or tax-free assistance was received. H&r block key code for free state filing Example. H&r block key code for free state filing   You pay $9,300 in tuition and fees in December 2013, and your child began college in January 2014. H&r block key code for free state filing You filed your 2013 tax return on February 14, 2014, and claimed a lifetime learning credit of $1,860. H&r block key code for free state filing You claimed no other tax credits. H&r block key code for free state filing After you filed your return, your child withdrew from two courses and you received a refund of $2,900. H&r block key code for free state filing You must refigure your 2013 lifetime learning credit using $6,400 of qualified education expenses instead of $9,300. H&r block key code for free state filing The refigured credit is $1,280 and your tax liability increased by $580. H&r block key code for free state filing See instructions for your 2014 income tax return to determine where to include this tax. H&r block key code for free state filing If you pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. H&r block key code for free state filing Amounts that do not reduce qualified education expenses. H&r block key code for free state filing   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. H&r block key code for free state filing   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. H&r block key code for free state filing The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. H&r block key code for free state filing The use of the money is not restricted. H&r block key code for free state filing For examples, see Adjustments to Qualified Education Expenses in chapter 2, American Opportunity Credit. H&r block key code for free state filing Coordination with Pell grants and other scholarships. H&r block key code for free state filing   In some cases, you may be able to reduce your tax liability by including scholarships in income. H&r block key code for free state filing If you are claiming an education credit for a claimed dependent who received a scholarship, you may be able to reduce your tax liability if the student includes the scholarship in income. H&r block key code for free state filing The scholarship must be one that may (by its terms) be applied to expenses (such as room and board) other than qualified education expenses. H&r block key code for free state filing Example 1—No scholarship. H&r block key code for free state filing Judy Green, who is unmarried, is taking courses at a public community college to be recertified to teach in public schools. H&r block key code for free state filing Her AGI and her MAGI, for purposes of the credit, are $27,000. H&r block key code for free state filing Judy takes the standard deduction of $5,950 and personal exemption of $3,800, reducing her AGI to taxable income of $17,250 and her tax before credits is $2,156. H&r block key code for free state filing She claims no credits other than the lifetime learning credit. H&r block key code for free state filing In July 2013 she paid $700 for the summer 2013 semester; in August 2013 she paid $1,900 for the fall 2013 semester; and in December 2013 she paid another $1,900 for the spring semester beginning in January 2014. H&r block key code for free state filing Judy and the college meet all requirements for the lifetime learning tax credit. H&r block key code for free state filing She can use all of the $4,500 tuition she paid in 2013 when figuring her 2013 lifetime learning credit. H&r block key code for free state filing She claims a $900 lifetime learning credit and her tax after credits is $1,256. H&r block key code for free state filing Example 2—Scholarship excluded from income. H&r block key code for free state filing The facts are the same as in Example 1—No scholarship, except that Judy was awarded a $1,500 scholarship. H&r block key code for free state filing Under the terms of her scholarship, it may be used to pay any educational expenses, including room and board. H&r block key code for free state filing If Judy excludes the scholarship from income, she will be deemed (for purposes of computing her education credit) as having used the scholarship to pay for tuition, required fees, and course materials. H&r block key code for free state filing Only $3,000 of the $4,500 tuition she paid in 2013 could be used when figuring her 2013 lifetime learning credit. H&r block key code for free state filing Her lifetime learning credit would be reduced to $600 and her tax after credits would be $1,556. H&r block key code for free state filing Example 3—Scholarship included in income. H&r block key code for free state filing The facts are the same as in Example 2—Scholarship excluded from income. H&r block key code for free state filing If, unlike Example 2, Judy includes the $1,500 scholarship in income, she will be deemed to have used the entire scholarship to pay for room and board. H&r block key code for free state filing Judy's AGI will increase to $28,500, her taxable income would be $18,750, and her tax before credits would be $2,381. H&r block key code for free state filing She would be able to use the $4,500 of adjusted qualified education expenses to figure her credit. H&r block key code for free state filing Judy could claim a $900 lifetime learning credit and her tax after credits would be $1,481. H&r block key code for free state filing Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. H&r block key code for free state filing This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. H&r block key code for free state filing Sports, games, hobbies, and noncredit courses. H&r block key code for free state filing   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. H&r block key code for free state filing However, if the course of instruction or other education is part of the student's degree program or is taken by the student to acquire or improve job skills, these expenses can qualify. H&r block key code for free state filing Comprehensive or bundled fees. H&r block key code for free state filing   Some eligible educational institutions combine all of their fees for an academic period into one amount. H&r block key code for free state filing If you do not receive or do not have access to an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. H&r block key code for free state filing The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T. H&r block key code for free state filing See Figuring the Credit , later, for more information about Form 1098-T. H&r block key code for free state filing Who Is an Eligible Student For purposes of the lifetime learning credit, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses , earlier). H&r block key code for free state filing Who Can Claim a Dependent's Expenses If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim a lifetime learning credit for your dependent's expenses for that year. H&r block key code for free state filing For you to claim a lifetime learning credit for your dependent's expenses, you must also claim an exemption for your dependent. H&r block key code for free state filing You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. H&r block key code for free state filing IF you. H&r block key code for free state filing . H&r block key code for free state filing . H&r block key code for free state filing THEN only. H&r block key code for free state filing . H&r block key code for free state filing . H&r block key code for free state filing claim an exemption on your tax return for a dependent who is an eligible student you can claim the lifetime learning credit based on that dependent's expenses. H&r block key code for free state filing The dependent cannot claim the credit. H&r block key code for free state filing do not claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) the dependent can claim the lifetime learning credit. H&r block key code for free state filing You cannot claim the credit based on this dependent's expenses. H&r block key code for free state filing Expenses paid by dependent. H&r block key code for free state filing   If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. H&r block key code for free state filing Include these expenses when figuring the amount of your lifetime learning credit. H&r block key code for free state filing    Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent. H&r block key code for free state filing Expenses paid by you. H&r block key code for free state filing   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the lifetime learning credit. H&r block key code for free state filing If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the lifetime learning credit. H&r block key code for free state filing Expenses paid by others. H&r block key code for free state filing   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. H&r block key code for free state filing In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. H&r block key code for free state filing If you claim an exemption on your tax return for the student, you are considered to have paid the expenses. H&r block key code for free state filing Example. H&r block key code for free state filing In 2013, Ms. H&r block key code for free state filing Allen makes a payment directly to an eligible educational institution for her grandson Todd's qualified education expenses. H&r block key code for free state filing For purposes of claiming a lifetime learning credit, Todd is treated as receiving the money from his grandmother and, in turn, paying his qualified education expenses himself. H&r block key code for free state filing Unless an exemption for Todd is claimed on someone else's 2013 tax return, only Todd can use the payment to claim a lifetime learning credit. H&r block key code for free state filing If anyone, such as Todd's parents, claims an exemption for Todd on his or her 2013 tax return, whoever claims the exemption may be able to use the expenses to claim a lifetime learning credit. H&r block key code for free state filing If anyone else claims an exemption for Todd, Todd cannot claim a lifetime learning credit. H&r block key code for free state filing Tuition reduction. H&r block key code for free state filing   When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. H&r block key code for free state filing If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. H&r block key code for free state filing For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. H&r block key code for free state filing Figuring the Credit The amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses you paid for all eligible students. H&r block key code for free state filing The maximum amount of lifetime learning credit you can claim for 2013 is $2,000 (20% × $10,000). H&r block key code for free state filing However, that amount may be reduced based on your MAGI. H&r block key code for free state filing See Effect of the Amount of Your Income on the Amount of Your Credit , later. H&r block key code for free state filing Example. H&r block key code for free state filing Bruce and Toni Harper are married and file a joint tax return. H&r block key code for free state filing For 2013, their MAGI is $75,000. H&r block key code for free state filing Toni is attending a local college (an eligible educational institution) to earn credits toward a degree in nursing. H&r block key code for free state filing She already has a bachelor's degree in history and wants to become a nurse. H&r block key code for free state filing In August 2013, Toni paid $5,000 of qualified education expenses for her fall 2013 semester. H&r block key code for free state filing Bruce and Toni can claim a $1,000 (20% × $5,000) lifetime learning credit on their 2013 joint tax return. H&r block key code for free state filing Form 1098-T. H&r block key code for free state filing   To help you figure your lifetime learning credit, the student should receive Form 1098-T. H&r block key code for free state filing Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. H&r block key code for free state filing An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. H&r block key code for free state filing However, the amounts in boxes 1 and 2 of Form 1098-T might be different from what you paid. H&r block key code for free state filing When figuring the credit, use only the amounts you paid or are deemed to have paid in 2013 for qualified education expenses. H&r block key code for free state filing   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. H&r block key code for free state filing    The eligible educational institution may ask for a completed Form W-9S, or similar statement to obtain the student's name, address, and taxpayer identification number. H&r block key code for free state filing Effect of the Amount of Your Income on the Amount of Your Credit The amount of your lifetime learning credit is phased out (gradually reduced) if your MAGI is between $53,000 and $63,000 ($107,000 and $127,000 if you file a joint return). H&r block key code for free state filing You cannot claim a lifetime learning credit if your MAGI is $63,000 or more ($127,000 or more if you file a joint return). H&r block key code for free state filing Modified adjusted gross income (MAGI). H&r block key code for free state filing   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. H&r block key code for free state filing MAGI when using Form 1040A. H&r block key code for free state filing   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. H&r block key code for free state filing MAGI when using Form 1040. H&r block key code for free state filing   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. H&r block key code for free state filing You can use Worksheet 3-1 to figure your MAGI. H&r block key code for free state filing Worksheet 3-1. H&r block key code for free state filing MAGI for the Lifetime Learning Credit 1. H&r block key code for free state filing Enter your adjusted gross income  (Form 1040, line 38)   1. H&r block key code for free state filing   2. H&r block key code for free state filing Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. H&r block key code for free state filing       3. H&r block key code for free state filing Enter your foreign housing deduction (Form 2555, line 50)   3. H&r block key code for free state filing       4. H&r block key code for free state filing Enter the amount of income from Puerto Rico you are excluding   4. H&r block key code for free state filing       5. H&r block key code for free state filing Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. H&r block key code for free state filing       6. H&r block key code for free state filing Add the amounts on lines 2, 3, 4, and 5   6. H&r block key code for free state filing   7. H&r block key code for free state filing Add the amounts on lines 1 and 6. H&r block key code for free state filing  This is your modified adjusted  gross income. H&r block key code for free state filing Enter this amount  on Form 8863, line 14   7. H&r block key code for free state filing   Phaseout. H&r block key code for free state filing   If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 10-18 of Form 8863. H&r block key code for free state filing The same method is shown in the following example. H&r block key code for free state filing Example. H&r block key code for free state filing You are filing a joint return with a MAGI of $112,000. H&r block key code for free state filing In 2013, you paid $6,600 of qualified education expenses. H&r block key code for free state filing You figure the tentative lifetime learning credit (20% of the first $10,000 of qualified education expenses you paid for all eligible students). H&r block key code for free state filing The result is a $1,320 (20% x $6,600) tentative credit. H&r block key code for free state filing Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($1,320) by a fraction. H&r block key code for free state filing The numerator of the fraction is $127,000 (the upper limit for those filing a joint return) minus your MAGI. H&r block key code for free state filing The denominator is $20,000, the range of incomes for the phaseout ($107,000 to $127,000). H&r block key code for free state filing The result is the amount of your phased out (reduced) lifetime learning credit ($990). H&r block key code for free state filing   $1,320 × $127,000 − $112,000  $20,000 = $990   Claiming the Credit You claim the lifetime learning credit by completing Form 8863 and submitting it with your Form 1040 or 1040A. H&r block key code for free state filing Enter the credit on Form 1040, line 49, or Form 1040A, line 31. H&r block key code for free state filing Note. H&r block key code for free state filing In Appendix A, Illustrated Example of Education Credits at the end of this publication, there is an example illustrating the use of Form 8863 when both the American opportunity credit and the lifetime learning credit are claimed on the same tax return. H&r block key code for free state filing Prev  Up  Next   Home   More Online Publications
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The H&r Block Key Code For Free State Filing

H&r block key code for free state filing 18. H&r block key code for free state filing   Alimony Table of Contents IntroductionSpouse or former spouse. H&r block key code for free state filing Divorce or separation instrument. H&r block key code for free state filing Useful Items - You may want to see: General RulesMortgage payments. H&r block key code for free state filing Taxes and insurance. H&r block key code for free state filing Other payments to a third party. H&r block key code for free state filing Instruments Executed After 1984Payments to a third party. H&r block key code for free state filing Exception. H&r block key code for free state filing Substitute payments. H&r block key code for free state filing Specifically designated as child support. H&r block key code for free state filing Contingency relating to your child. H&r block key code for free state filing Clearly associated with a contingency. H&r block key code for free state filing How To Deduct Alimony Paid How To Report Alimony Received Recapture Rule Introduction This chapter discusses the rules that apply if you pay or receive alimony. H&r block key code for free state filing It covers the following topics. H&r block key code for free state filing What payments are alimony. H&r block key code for free state filing What payments are not alimony, such as child support. H&r block key code for free state filing How to deduct alimony you paid. H&r block key code for free state filing How to report alimony you received as income. H&r block key code for free state filing Whether you must recapture the tax benefits of alimony. H&r block key code for free state filing Recapture means adding back in your income all or part of a deduction you took in a prior year. H&r block key code for free state filing Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. H&r block key code for free state filing It does not include voluntary payments that are not made under a divorce or separation instrument. H&r block key code for free state filing Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. H&r block key code for free state filing Although this chapter is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. H&r block key code for free state filing To be alimony, a payment must meet certain requirements. H&r block key code for free state filing Different requirements generally apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. H&r block key code for free state filing This chapter discusses the rules for payments under instruments executed after 1984. H&r block key code for free state filing If you need the rules for payments under pre-1985 instruments, get and keep a copy of the 2004 version of Publication 504. H&r block key code for free state filing That was the last year the information on pre-1985 instruments was included in Publication 504. H&r block key code for free state filing Use Table 18-1 in this chapter as a guide to determine whether certain payments are considered alimony. H&r block key code for free state filing Definitions. H&r block key code for free state filing   The following definitions apply throughout this chapter. H&r block key code for free state filing Spouse or former spouse. H&r block key code for free state filing   Unless otherwise stated, the term “spouse” includes former spouse. H&r block key code for free state filing Divorce or separation instrument. H&r block key code for free state filing   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. H&r block key code for free state filing This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). H&r block key code for free state filing Useful Items - You may want to see: Publication 504 Divorced or Separated Individuals General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. H&r block key code for free state filing Payments not alimony. H&r block key code for free state filing   Not all payments under a divorce or separation instrument are alimony. H&r block key code for free state filing Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained under Community Property in Publication 504, Payments to keep up the payer's property, or Use of the payer's property. H&r block key code for free state filing Payments to a third party. H&r block key code for free state filing   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. H&r block key code for free state filing These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. H&r block key code for free state filing ), taxes, tuition, etc. H&r block key code for free state filing The payments are treated as received by your spouse and then paid to the third party. H&r block key code for free state filing Life insurance premiums. H&r block key code for free state filing   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. H&r block key code for free state filing Payments for jointly-owned home. H&r block key code for free state filing   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse, some of your payments may be alimony. H&r block key code for free state filing Mortgage payments. H&r block key code for free state filing   If you must pay all the mortgage payments (principal and interest) on a jointly-owned home, and they otherwise qualify as alimony, you can deduct one-half of the total payments as alimony. H&r block key code for free state filing If you itemize deductions and the home is a qualified home, you can claim one-half of the interest in figuring your deductible interest. H&r block key code for free state filing Your spouse must report one-half of the payments as alimony received. H&r block key code for free state filing If your spouse itemizes deductions and the home is a qualified home, he or she can claim one-half of the interest on the mortgage in figuring deductible interest. H&r block key code for free state filing Taxes and insurance. H&r block key code for free state filing   If you must pay all the real estate taxes or insurance on a home held as tenants in common, you can deduct one-half of these payments as alimony. H&r block key code for free state filing Your spouse must report one-half of these payments as alimony received. H&r block key code for free state filing If you and your spouse itemize deductions, you can each claim one-half of the real estate taxes and none of the home insurance. H&r block key code for free state filing    If your home is held as tenants by the entirety or joint tenants, none of your payments for taxes or insurance are alimony. H&r block key code for free state filing But if you itemize deductions, you can claim all of the real estate taxes and none of the home insurance. H&r block key code for free state filing Other payments to a third party. H&r block key code for free state filing   If you made other third-party payments, see Publication 504 to see whether any part of the payments qualifies as alimony. H&r block key code for free state filing Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. H&r block key code for free state filing Exception for instruments executed before 1985. H&r block key code for free state filing   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. H&r block key code for free state filing A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. H&r block key code for free state filing A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. H&r block key code for free state filing   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, get the 2004 version of Publication 504 at www. H&r block key code for free state filing irs. H&r block key code for free state filing gov/pub504. H&r block key code for free state filing Example 1. H&r block key code for free state filing In November 1984, you and your former spouse executed a written separation agreement. H&r block key code for free state filing In February 1985, a decree of divorce was substituted for the written separation agreement. H&r block key code for free state filing The decree of divorce did not change the terms for the alimony you pay your former spouse. H&r block key code for free state filing The decree of divorce is treated as executed before 1985. H&r block key code for free state filing Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. H&r block key code for free state filing Example 2. H&r block key code for free state filing Assume the same facts as in Example 1 except that the decree of divorce changed the amount of the alimony. H&r block key code for free state filing In this example, the decree of divorce is not treated as executed before 1985. H&r block key code for free state filing The alimony payments are subject to the rules for payments under instruments executed after 1984. H&r block key code for free state filing Alimony requirements. H&r block key code for free state filing   A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. H&r block key code for free state filing The payment is in cash. H&r block key code for free state filing The instrument does not designate the payment as not alimony. H&r block key code for free state filing Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. H&r block key code for free state filing There is no liability to make any payment (in cash or property) after the death of the recipient spouse. H&r block key code for free state filing The payment is not treated as child support. H&r block key code for free state filing Each of these requirements is discussed below. H&r block key code for free state filing Cash payment requirement. H&r block key code for free state filing   Only cash payments, including checks and money orders, qualify as alimony. H&r block key code for free state filing The following do not qualify as alimony. H&r block key code for free state filing Transfers of services or property (including a debt instrument of a third party or an annuity contract). H&r block key code for free state filing Execution of a debt instrument by the payer. H&r block key code for free state filing The use of the payer's property. H&r block key code for free state filing Payments to a third party. H&r block key code for free state filing   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. H&r block key code for free state filing See Payments to a third party under General Rules, earlier. H&r block key code for free state filing   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. H&r block key code for free state filing The payments are in lieu of payments of alimony directly to your spouse. H&r block key code for free state filing The written request states that both spouses intend the payments to be treated as alimony. H&r block key code for free state filing You receive the written request from your spouse before you file your return for the year you made the payments. H&r block key code for free state filing Payments designated as not alimony. H&r block key code for free state filing   You and your spouse can designate that otherwise qualifying payments are not alimony. H&r block key code for free state filing You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. H&r block key code for free state filing For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). H&r block key code for free state filing If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. H&r block key code for free state filing   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. H&r block key code for free state filing The copy must be attached each year the designation applies. H&r block key code for free state filing Spouses cannot be members of the same household. H&r block key code for free state filing    Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. H&r block key code for free state filing A home you formerly shared is considered one household, even if you physically separate yourselves in the home. H&r block key code for free state filing   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. H&r block key code for free state filing Exception. H&r block key code for free state filing   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. H&r block key code for free state filing Table 18-1. H&r block key code for free state filing Alimony Requirements (Instruments Executed After 1984) Payments ARE alimony if all of the following are true: Payments are NOT alimony if any of the following are true: Payments are required by a divorce or separation instrument. H&r block key code for free state filing Payments are not required by a divorce or separation instrument. H&r block key code for free state filing Payer and recipient spouse do not file a joint return with each other. H&r block key code for free state filing Payer and recipient spouse file a joint return with each other. H&r block key code for free state filing Payment is in cash (including checks or money orders). H&r block key code for free state filing Payment is: Not in cash, A noncash property settlement, Spouse's part of community income, or To keep up the payer's property. H&r block key code for free state filing Payment is not designated in the instrument as not alimony. H&r block key code for free state filing Payment is designated in the instrument as not alimony. H&r block key code for free state filing Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. H&r block key code for free state filing Spouses legally separated under a decree of divorce or separate maintenance are members of the same household. H&r block key code for free state filing Payments are not required after death of the recipient spouse. H&r block key code for free state filing Payments are required after death of the recipient spouse. H&r block key code for free state filing Payment is not treated as child support. H&r block key code for free state filing Payment is treated as child support. H&r block key code for free state filing These payments are deductible by the payer and includible in income by the recipient. H&r block key code for free state filing These payments are neither deductible by the payer nor includible in income by the recipient. H&r block key code for free state filing Liability for payments after death of recipient spouse. H&r block key code for free state filing   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony, whether made before or after the death. H&r block key code for free state filing If all of the payments would continue, then none of the payments made before or after the death are alimony. H&r block key code for free state filing   The divorce or separation instrument does not have to expressly state that the payments cease upon the death of your spouse if, for example, the liability for continued payments would end under state law. H&r block key code for free state filing Example. H&r block key code for free state filing You must pay your former spouse $10,000 in cash each year for 10 years. H&r block key code for free state filing Your divorce decree states that the payments will end upon your former spouse's death. H&r block key code for free state filing You must also pay your former spouse or your former spouse's estate $20,000 in cash each year for 10 years. H&r block key code for free state filing The death of your spouse would not terminate these payments under state law. H&r block key code for free state filing The $10,000 annual payments may qualify as alimony. H&r block key code for free state filing The $20,000 annual payments that do not end upon your former spouse's death are not alimony. H&r block key code for free state filing Substitute payments. H&r block key code for free state filing   If you must make any payments in cash or property after your spouse's death as a substitute for continuing otherwise qualifying payments before the death, the otherwise qualifying payments are not alimony. H&r block key code for free state filing To the extent that your payments begin, accelerate, or increase because of the death of your spouse, otherwise qualifying payments you made may be treated as payments that were not alimony. H&r block key code for free state filing Whether or not such payments will be treated as not alimony depends on all the facts and circumstances. H&r block key code for free state filing Example 1. H&r block key code for free state filing Under your divorce decree, you must pay your former spouse $30,000 annually. H&r block key code for free state filing The payments will stop at the end of 6 years or upon your former spouse's death, if earlier. H&r block key code for free state filing Your former spouse has custody of your minor children. H&r block key code for free state filing The decree provides that if any child is still a minor at your spouse's death, you must pay $10,000 annually to a trust until the youngest child reaches the age of majority. H&r block key code for free state filing The trust income and corpus (principal) are to be used for your children's benefit. H&r block key code for free state filing These facts indicate that the payments to be made after your former spouse's death are a substitute for $10,000 of the $30,000 annual payments. H&r block key code for free state filing Of each of the $30,000 annual payments, $10,000 is not alimony. H&r block key code for free state filing Example 2. H&r block key code for free state filing Under your divorce decree, you must pay your former spouse $30,000 annually. H&r block key code for free state filing The payments will stop at the end of 15 years or upon your former spouse's death, if earlier. H&r block key code for free state filing The decree provides that if your former spouse dies before the end of the 15-year period, you must pay the estate the difference between $450,000 ($30,000 × 15) and the total amount paid up to that time. H&r block key code for free state filing For example, if your spouse dies at the end of the tenth year, you must pay the estate $150,000 ($450,000 − $300,000). H&r block key code for free state filing These facts indicate that the lump-sum payment to be made after your former spouse's death is a substitute for the full amount of the $30,000 annual payments. H&r block key code for free state filing None of the annual payments are alimony. H&r block key code for free state filing The result would be the same if the payment required at death were to be discounted by an appropriate interest factor to account for the prepayment. H&r block key code for free state filing Child support. H&r block key code for free state filing   A payment that is specifically designated as child support or treated as specifically designated as child support under your divorce or separation instrument is not alimony. H&r block key code for free state filing The amount of child support may vary over time. H&r block key code for free state filing Child support payments are not deductible by the payer and are not taxable to the recipient. H&r block key code for free state filing Specifically designated as child support. H&r block key code for free state filing   A payment will be treated as specifically designated as child support to the extent that the payment is reduced either: On the happening of a contingency relating to your child, or At a time that can be clearly associated with the contingency. H&r block key code for free state filing A payment may be treated as specifically designated as child support even if other separate payments are specifically designated as child support. H&r block key code for free state filing Contingency relating to your child. H&r block key code for free state filing   A contingency relates to your child if it depends on any event relating to that child. H&r block key code for free state filing It does not matter whether the event is certain or likely to occur. H&r block key code for free state filing Events relating to your child include the child's: Becoming employed, Dying, Leaving the household, Leaving school, Marrying, or Reaching a specified age or income level. H&r block key code for free state filing Clearly associated with a contingency. H&r block key code for free state filing   Payments that would otherwise qualify as alimony are presumed to be reduced at a time clearly associated with the happening of a contingency relating to your child only in the following situations. H&r block key code for free state filing The payments are to be reduced not more than 6 months before or after the date the child will reach 18, 21, or local age of majority. H&r block key code for free state filing The payments are to be reduced on two or more occasions that occur not more than 1 year before or after a different one of your children reaches a certain age from 18 to 24. H&r block key code for free state filing This certain age must be the same for each child, but need not be a whole number of years. H&r block key code for free state filing In all other situations, reductions in payments are not treated as clearly associated with the happening of a contingency relating to your child. H&r block key code for free state filing   Either you or the IRS can overcome the presumption in the two situations above. H&r block key code for free state filing This is done by showing that the time at which the payments are to be reduced was determined independently of any contingencies relating to your children. H&r block key code for free state filing For example, if you can show that the period of alimony payments is customary in the local jurisdiction, such as a period equal to one-half of the duration of the marriage, you can overcome the presumption and may be able to treat the amount as alimony. H&r block key code for free state filing How To Deduct Alimony Paid You can deduct alimony you paid, whether or not you itemize deductions on your return. H&r block key code for free state filing You must file Form 1040. H&r block key code for free state filing You cannot use Form 1040A or Form 1040EZ. H&r block key code for free state filing Enter the amount of alimony you paid on Form 1040, line 31a. H&r block key code for free state filing In the space provided on line 31b, enter your spouse's social security number (SSN) or individual taxpayer identification number (ITIN). H&r block key code for free state filing If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. H&r block key code for free state filing Show the SSN or ITIN and amount paid to each other recipient on an attached statement. H&r block key code for free state filing Enter your total payments on line 31a. H&r block key code for free state filing You must provide your spouse's SSN or ITIN. H&r block key code for free state filing If you do not, you may have to pay a $50 penalty and your deduction may be disallowed. H&r block key code for free state filing For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. H&r block key code for free state filing How To Report Alimony Received Report alimony you received as income on Form 1040, line 11. H&r block key code for free state filing You cannot use Form 1040A or Form 1040EZ. H&r block key code for free state filing You must give the person who paid the alimony your SSN or ITIN. H&r block key code for free state filing If you do not, you may have to pay a $50 penalty. H&r block key code for free state filing Recapture Rule If your alimony payments decrease or end during the first 3 calendar years, you may be subject to the recapture rule. H&r block key code for free state filing If you are subject to this rule, you have to include in income in the third year part of the alimony payments you previously deducted. H&r block key code for free state filing Your spouse can deduct in the third year part of the alimony payments he or she previously included in income. H&r block key code for free state filing The 3-year period starts with the first calendar year you make a payment qualifying as alimony under a decree of divorce or separate maintenance or a written separation agreement. H&r block key code for free state filing Do not include any time in which payments were being made under temporary support orders. H&r block key code for free state filing The second and third years are the next 2 calendar years, whether or not payments are made during those years. H&r block key code for free state filing The reasons for a reduction or end of alimony payments that can require a recapture include: A change in your divorce or separation instrument, A failure to make timely payments, A reduction in your ability to provide support, or A reduction in your spouse's support needs. H&r block key code for free state filing When to apply the recapture rule. H&r block key code for free state filing   You are subject to the recapture rule in the third year if the alimony you pay in the third year decreases by more than $15,000 from the second year or the alimony you pay in the second and third years decreases significantly from the alimony you pay in the first year. H&r block key code for free state filing   When you figure a decrease in alimony, do not include the following amounts. H&r block key code for free state filing Payments made under a temporary support order. H&r block key code for free state filing Payments required over a period of at least 3 calendar years that vary because they are a fixed part of your income from a business or property, or from compensation for employment or self-employment. H&r block key code for free state filing Payments that decrease because of the death of either spouse or the remarriage of the spouse receiving the payments before the end of the third year. H&r block key code for free state filing Figuring the recapture. H&r block key code for free state filing   You can use Worksheet 1 in Publication 504 to figure recaptured alimony. H&r block key code for free state filing Including the recapture in income. H&r block key code for free state filing   If you must include a recapture amount in income, show it on Form 1040, line 11 (“Alimony received”). H&r block key code for free state filing Cross out “received” and enter “recapture. H&r block key code for free state filing ” On the dotted line next to the amount, enter your spouse's last name and SSN or ITIN. H&r block key code for free state filing Deducting the recapture. H&r block key code for free state filing   If you can deduct a recapture amount, show it on Form 1040, line 31a (“Alimony paid”). H&r block key code for free state filing Cross out “paid” and enter “recapture. H&r block key code for free state filing ” In the space provided, enter your spouse's SSN or ITIN. H&r block key code for free state filing Prev  Up  Next   Home   More Online Publications