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How Do I Amend My 2009 Tax Return

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How Do I Amend My 2009 Tax Return

How do i amend my 2009 tax return Publication 925 - Main Content Table of Contents Passive Activity LimitsWho Must Use These Rules? Passive Activity Loss Passive Activity Credit Publicly Traded Partnership Excess Farm Loss Passive Activities Activities That Are Not Passive Activities Passive Activity Income and Deductions Grouping Your Activities Recharacterization of Passive Income Dispositions How To Report Your Passive Activity Loss Comprehensive ExampleGeneral Information At-Risk LimitsWho Is Affected? Activities Covered by the At-Risk Rules At-Risk Amounts Amounts Not At Risk Reductions of Amounts At Risk Recapture Rule How To Get Tax HelpLow Income Taxpayer Clinics Passive Activity Limits Who Must Use These Rules? The passive activity rules apply to: Individuals, Estates, Trusts (other than grantor trusts), Personal service corporations, and Closely held corporations. How do i amend my 2009 tax return Even though the rules do not apply to grantor trusts, partnerships, and S corporations directly, they do apply to the owners of these entities. How do i amend my 2009 tax return For information about personal service corporations and closely held corporations, including definitions and how the passive activity rules apply to these corporations, see Form 8810 and its instructions. How do i amend my 2009 tax return Before applying the passive activity limits, you must first determine the amount of the deductions disallowed under the basis, excess farm loss, or at-risk rules. How do i amend my 2009 tax return See Passive Activity Deductions, later. How do i amend my 2009 tax return Passive Activity Loss Generally, the passive activity loss for the tax year is not allowed. How do i amend my 2009 tax return However, there is a special allowance under which some or all of your passive activity loss may be allowed. How do i amend my 2009 tax return See Special $25,000 allowance , later. How do i amend my 2009 tax return Definition of passive activity loss. How do i amend my 2009 tax return    Generally, your passive activity loss for the tax year is the excess of your passive activity deductions over your passive activity gross income. How do i amend my 2009 tax return See Passive Activity Income and Deductions , later. How do i amend my 2009 tax return   For a closely held corporation, the passive activity loss is the excess of passive activity deductions over the sum of passive activity gross income and net active income. How do i amend my 2009 tax return For details on net active income, see the Instructions for Form 8810. How do i amend my 2009 tax return For the definition of passive activity gross income, see Passive Activity Income , later. How do i amend my 2009 tax return For the definition of passive activity deductions, see Passive Activity Deductions , later. How do i amend my 2009 tax return Identification of Disallowed Passive Activity Deductions If all or a part of your passive activity loss is disallowed for the tax year, you may need to allocate the disallowed passive activity loss among different passive activities and among different deductions within a passive activity. How do i amend my 2009 tax return Allocation of disallowed passive activity loss among activities. How do i amend my 2009 tax return   If all or any part of your passive activity loss is disallowed for the tax year, a ratable portion of the loss (if any) from each of your passive activities is disallowed. How do i amend my 2009 tax return The ratable portion of a loss from an activity is computed by multiplying the passive activity loss that is disallowed for the tax year by the fraction obtained by dividing: The loss from the activity for the tax year; by The sum of the losses for the tax year from all activities having losses for the tax year. How do i amend my 2009 tax return Use Worksheet 5 of Form 8582 to figure the ratable portion of the loss from each activity that is disallowed. How do i amend my 2009 tax return Loss from an activity. How do i amend my 2009 tax return   The term “loss from an activity” means: The amount by which the passive activity deductions (defined later) from the activity for the tax year exceed the passive activity gross income (defined later) from the activity for the tax year; reduced by Any part of such amount that is allowed under the Special $25,000 Allowance , later. How do i amend my 2009 tax return   If your passive activity gross income from significant participation passive activities (defined later) for the tax year is more than your passive activity deductions from those activities for the tax year, those activities shall be treated, solely for purposes of figuring your loss from the activity, as a single activity that does not have a loss for such taxable year. How do i amend my 2009 tax return See Significant Participation Passive Activities , later. How do i amend my 2009 tax return Example. How do i amend my 2009 tax return John Pine holds interests in three passive activities, A, B, and C. How do i amend my 2009 tax return The gross income and deductions from these activities for the taxable year are as follows:   A B C Total Gross income $7,000 $4,000 $12,000 $23,000 Deductions (16,000) (20,000) (8,000) (44,000)           Net income (loss) ($9,000) ($16,000) $4,000 ($21,000)   John Pine’s $21,000 passive activity loss for the taxable year is disallowed. How do i amend my 2009 tax return Therefore, a ratable portion of the losses from activities A and B is disallowed. How do i amend my 2009 tax return He figures the disallowed portion of each loss as follows: A: $21,000 x $9,000/$25,000 $7,560 B: $21,000 x $16,000/$25,000 13,440     Total $21,000 Allocation within loss activities. How do i amend my 2009 tax return   If all or any part of your loss from an activity is disallowed under Allocation of disallowed passive activity loss among activities for the tax year, a ratable portion of each of your passive activity deductions (defined later), other than an excluded deduction (defined below) from such activity is disallowed. How do i amend my 2009 tax return The ratable portion of a passive activity deduction is the amount of the disallowed portion of the loss from the activity for the tax year multiplied by the fraction obtained by dividing: The amount of such deduction; by The sum of all of your passive activity deductions (other than excluded deductions) from that activity from the tax year. How do i amend my 2009 tax return Excluded deductions. How do i amend my 2009 tax return    “Excluded deduction” means any passive activity deduction that is taken into account in computing your net income from an item of property for a taxable year in which an amount of the taxpayer's gross income from such item of property is treated as not from a passive activity. How do i amend my 2009 tax return See Recharacterization of Passive Income , later. How do i amend my 2009 tax return Separately identified deductions. How do i amend my 2009 tax return   In identifying the deductions from an activity that are disallowed, you do not need to account separately for a deduction unless such deduction may, if separately taken into account, result in an income tax liability for any tax year different from that which would result were such deduction not taken into account separately. How do i amend my 2009 tax return   Use Form 8582, Worksheet 7, for any activity if you have passive activity deductions for that activity that must be separately identified. How do i amend my 2009 tax return   Deductions that must be accounted for separately include (but are not limited to) the following deductions. How do i amend my 2009 tax return Deductions that arise in a rental real estate activity in tax years in which you actively participate in such activity. How do i amend my 2009 tax return See Active participation , later. How do i amend my 2009 tax return Deductions that arise in a rental real estate activity in tax years in which you do not actively participate in such activity. How do i amend my 2009 tax return See Active participation , later. How do i amend my 2009 tax return Losses from sales or exchanges of capital assets. How do i amend my 2009 tax return Section 1231 losses. How do i amend my 2009 tax return See Section 1231 Gains and Losses in Publication 544, Sales and Other Disposition of Assets, for more information. How do i amend my 2009 tax return Carryover of Disallowed Deductions In the case of an activity with respect to which any deductions or credits are disallowed for a taxable year (the loss activity), the disallowed deductions are allocated among your activities for the next tax year in a manner that reasonably reflects the extent to which each activity continues the loss activity. How do i amend my 2009 tax return The disallowed deductions or credits allocated to an activity under the preceding sentence are treated as deductions or credits from the activity for the next tax year. How do i amend my 2009 tax return For more information, see Regulations section 1. How do i amend my 2009 tax return 469-1(f)(4). How do i amend my 2009 tax return Passive Activity Credit Generally, the passive activity credit for the tax year is disallowed. How do i amend my 2009 tax return The passive activity credit is the amount by which the sum of all your credits subject to the passive activity rules exceed your regular tax liability allocable to all passive activities for the tax year. How do i amend my 2009 tax return Credits that are included in figuring the general business credit are subject to the passive activity rules. How do i amend my 2009 tax return See the Instructions for Form 8582-CR for more information. How do i amend my 2009 tax return Publicly Traded Partnership You must apply the rules in this part separately to your income or loss from a passive activity held through a publicly traded partnership (PTP). How do i amend my 2009 tax return You also must apply the limit on passive activity credits separately to your credits from a passive activity held through a PTP. How do i amend my 2009 tax return You can offset deductions from passive activities of a PTP only against income or gain from passive activities of the same PTP. How do i amend my 2009 tax return Likewise, you can offset credits from passive activities of a PTP only against the tax on the net passive income from the same PTP. How do i amend my 2009 tax return This separate treatment rule also applies to a regulated investment company holding an interest in a PTP for the items attributable to that interest. How do i amend my 2009 tax return For more information on how to apply the passive activity loss rules to PTPs, and on how to apply the limit on passive activity credits to PTPs, see Publicly Traded Partnerships (PTPs) in the Instructions for Forms 8582 and 8582-CR, respectively. How do i amend my 2009 tax return Excess Farm Loss If you receive an applicable subsidy for any tax year and you have an excess farm loss for the tax year, special rules apply. How do i amend my 2009 tax return These rules do not apply to C corporations. How do i amend my 2009 tax return For information, see the Instructions for Schedule F (Form 1040), Profit or Loss From Farming. How do i amend my 2009 tax return Passive Activities There are two kinds of passive activities. How do i amend my 2009 tax return Trade or business activities in which you do not materially participate during the year. How do i amend my 2009 tax return Rental activities, even if you do materially participate in them, unless you are a real estate professional. How do i amend my 2009 tax return Material participation in a trade or business is discussed later, under Activities That Are Not Passive Activities . How do i amend my 2009 tax return Treatment of former passive activities. How do i amend my 2009 tax return   A former passive activity is an activity that was a passive activity in any earlier tax year, but is not a passive activity in the current tax year. How do i amend my 2009 tax return You can deduct a prior year's unallowed loss from the activity up to the amount of your current year net income from the activity. How do i amend my 2009 tax return Treat any remaining prior year unallowed loss like you treat any other passive loss. How do i amend my 2009 tax return   In addition, any prior year unallowed passive activity credits from a former passive activity offset the allocable part of your current year tax liability. How do i amend my 2009 tax return The allocable part of your current year tax liability is that part of this year's tax liability that is allocable to the current year net income from the former passive activity. How do i amend my 2009 tax return You figure this after you reduce your net income from the activity by any prior year unallowed loss from that activity (but not below zero). How do i amend my 2009 tax return Trade or Business Activities A trade or business activity is an activity that: Involves the conduct of a trade or business (that is, deductions would be allowable under section 162 of the Internal Revenue Code if other limitations, such as the passive activity rules, did not apply), Is conducted in anticipation of starting a trade or business, or Involves research or experimental expenditures that are deductible under Internal Revenue Code section 174 (or that would be deductible if you chose to deduct rather than capitalize them). How do i amend my 2009 tax return A trade or business activity does not include a rental activity or the rental of property that is incidental to an activity of holding the property for investment. How do i amend my 2009 tax return You generally report trade or business activities on Schedule C, C-EZ, F, or in Part II or III of Schedule E. How do i amend my 2009 tax return Rental Activities A rental activity is a passive activity even if you materially participated in that activity, unless you materially participated as a real estate professional. How do i amend my 2009 tax return See Real Estate Professional under Activities That Are Not Passive Activities, later. How do i amend my 2009 tax return An activity is a rental activity if tangible property (real or personal) is used by customers or held for use by customers, and the gross income (or expected gross income) from the activity represents amounts paid (or to be paid) mainly for the use of the property. How do i amend my 2009 tax return It does not matter whether the use is under a lease, a service contract, or some other arrangement. How do i amend my 2009 tax return Exceptions. How do i amend my 2009 tax return   Your activity is not a rental activity if any of the following apply. How do i amend my 2009 tax return The average period of customer use of the property is 7 days or less. How do i amend my 2009 tax return You figure the average period of customer use by dividing the total number of days in all rental periods by the number of rentals during the tax year. How do i amend my 2009 tax return If the activity involves renting more than one class of property, multiply the average period of customer use of each class by a fraction. How do i amend my 2009 tax return The numerator of the fraction is the gross rental income from that class of property and the denominator is the activity's total gross rental income. How do i amend my 2009 tax return The activity's average period of customer use will equal the sum of the amounts for each class. How do i amend my 2009 tax return The average period of customer use of the property, as figured in (1) above, is 30 days or less and you provide significant personal services with the rentals. How do i amend my 2009 tax return Significant personal services include only services performed by individuals. How do i amend my 2009 tax return To determine if personal services are significant, all relevant facts and circumstances are taken into consideration, including the frequency of the services, the type and amount of labor required to perform the services, and the value of the services relative to the amount charged for use of the property. How do i amend my 2009 tax return Significant personal services do not include the following. How do i amend my 2009 tax return Services needed to permit the lawful use of the property, Services to repair or improve property that would extend its useful life for a period substantially longer than the average rental, and Services that are similar to those commonly provided with long-term rentals of real estate, such as cleaning and maintenance of common areas or routine repairs. How do i amend my 2009 tax return You provide extraordinary personal services in making the rental property available for customer use. How do i amend my 2009 tax return Services are extraordinary personal services if they are performed by individuals and the customers' use of the property is incidental to their receipt of the services. How do i amend my 2009 tax return The rental is incidental to a nonrental activity. How do i amend my 2009 tax return The rental of property is incidental to an activity of holding property for investment if the main purpose of holding the property is to realize a gain from its appreciation and the gross rental income from the property is less than 2% of the smaller of the property's unadjusted basis or fair market value. How do i amend my 2009 tax return The unadjusted basis of property is its cost not reduced by depreciation or any other basis adjustment. How do i amend my 2009 tax return The rental of property is incidental to a trade or business activity if all of the following apply. How do i amend my 2009 tax return You own an interest in the trade or business activity during the year. How do i amend my 2009 tax return The rental property was used mainly in that trade or business activity during the current year, or during at least 2 of the 5 preceding tax years. How do i amend my 2009 tax return Your gross rental income from the property is less than 2% of the smaller of its unadjusted basis or fair market value. How do i amend my 2009 tax return Lodging provided to an employee or the employee's spouse or dependents is incidental to the activity or activities in which the employee performs services if the lodging is furnished for the employer's convenience. How do i amend my 2009 tax return You customarily make the rental property available during defined business hours for nonexclusive use by various customers. How do i amend my 2009 tax return You provide the property for use in a nonrental activity in your capacity as an owner of an interest in the partnership, S corporation, or joint venture conducting that activity. How do i amend my 2009 tax return    If you meet any of the exceptions listed above, see the instructions for Form 8582 for information about how to report any income or loss from the activity. How do i amend my 2009 tax return Special $25,000 allowance. How do i amend my 2009 tax return   If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that is disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. How do i amend my 2009 tax return This special allowance is an exception to the general rule disallowing the passive activity loss. How do i amend my 2009 tax return Similarly, you can offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. How do i amend my 2009 tax return   If you are married, filing a separate return, and lived apart from your spouse for the entire tax year, your special allowance cannot be more than $12,500. How do i amend my 2009 tax return If you lived with your spouse at any time during the year and are filing a separate return, you cannot use the special allowance to reduce your nonpassive income or tax on nonpassive income. How do i amend my 2009 tax return   The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. How do i amend my 2009 tax return See Phaseout rule , later. How do i amend my 2009 tax return Example. How do i amend my 2009 tax return Kate, a single taxpayer, has $70,000 in wages, $15,000 income from a limited partnership, a $26,000 loss from rental real estate activities in which she actively participated, and is not subject to the modified adjusted gross income phaseout rule. How do i amend my 2009 tax return She can use $15,000 of her $26,000 loss to offset her $15,000 passive income from the partnership. How do i amend my 2009 tax return She actively participated in her rental real estate activities, so she can use the remaining $11,000 rental real estate loss to offset $11,000 of her nonpassive income (wages). How do i amend my 2009 tax return Commercial revitalization deduction (CRD). How do i amend my 2009 tax return   The special allowance must first be applied to losses from rental real estate activities figured without the CRD. How do i amend my 2009 tax return Any remaining part of the special allowance is available for the CRD from the rental real estate activities and is not subject to the active participation rules or the phaseout based on modified adjusted gross income. How do i amend my 2009 tax return You cannot claim a CRD for a building placed in service after December 31, 2009. How do i amend my 2009 tax return Active participation. How do i amend my 2009 tax return   Active participation is not the same as material participation (defined later). How do i amend my 2009 tax return Active participation is a less stringent standard than material participation. How do i amend my 2009 tax return For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. How do i amend my 2009 tax return Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. How do i amend my 2009 tax return   Only individuals can actively participate in rental real estate activities. How do i amend my 2009 tax return However, a decedent's estate is treated as actively participating for its tax years ending less than 2 years after the decedent's death, if the decedent would have satisfied the active participation requirement for the activity for the tax year the decedent died. How do i amend my 2009 tax return   A decedent's qualified revocable trust can also be treated as actively participating if both the trustee and the executor (if any) of the estate choose to treat the trust as part of the estate. How do i amend my 2009 tax return The choice applies to tax years ending after the decedent's death and before: 2 years after the decedent's death if no estate tax return is required, or 6 months after the estate tax liability is finally determined if an estate tax return is required. How do i amend my 2009 tax return   The choice is irrevocable and cannot be made later than the due date for the estate's first income tax return (including any extensions). How do i amend my 2009 tax return   Limited partners are not treated as actively participating in a partnership's rental real estate activities. How do i amend my 2009 tax return   You are not treated as actively participating in a rental real estate activity unless your interest in the activity (including your spouse's interest) was at least 10% (by value) of all interests in the activity throughout the year. How do i amend my 2009 tax return   Active participation is not required to take the low-income housing credit, the rehabilitation investment credit, or CRD from rental real estate activities. How do i amend my 2009 tax return Example. How do i amend my 2009 tax return Mike, a single taxpayer, had the following income and loss during the tax year: Salary $42,300 Dividends 300 Interest 1,400 Rental loss (4,000) The rental loss came from a house Mike owned. How do i amend my 2009 tax return He advertised and rented the house to the current tenant himself. How do i amend my 2009 tax return He also collected the rents and did the repairs or hired someone to do them. How do i amend my 2009 tax return Even though the rental loss is a loss from a passive activity, Mike can use the entire $4,000 loss to offset his other income because he actively participated. How do i amend my 2009 tax return Phaseout rule. How do i amend my 2009 tax return   The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that is more than $100,000 ($50,000 if you are married filing separately). How do i amend my 2009 tax return If your modified adjusted gross income is $150,000 or more ($75,000 or more if you are married filing separately), you generally cannot use the special allowance. How do i amend my 2009 tax return    Modified adjusted gross income for this purpose is your adjusted gross income figured without the following. How do i amend my 2009 tax return Taxable social security and tier 1 railroad retirement benefits. How do i amend my 2009 tax return Deductible contributions to individual retirement accounts (IRAs) and section 501(c)(18) pension plans. How do i amend my 2009 tax return The exclusion from income of interest from qualified U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return savings bonds used to pay qualified higher education expenses. How do i amend my 2009 tax return The exclusion from income of amounts received from an employer's adoption assistance program. How do i amend my 2009 tax return Passive activity income or loss included on Form 8582. How do i amend my 2009 tax return Any rental real estate loss allowed because you materially participated in the rental activity as a Real Estate Professional (as discussed later, under Activities That Are Not Passive Activities). How do i amend my 2009 tax return Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the instructions for Form 8582). How do i amend my 2009 tax return The deduction for the employer-equivalent portion of self-employment tax. How do i amend my 2009 tax return The deduction for domestic production activities. How do i amend my 2009 tax return The deduction allowed for interest on student loans. How do i amend my 2009 tax return The deduction for qualified tuition and related expenses. How do i amend my 2009 tax return Example. How do i amend my 2009 tax return During 2013, John was unmarried and was not a real estate professional. How do i amend my 2009 tax return For 2013, he had $120,000 in salary and a $31,000 loss from his rental real estate activities in which he actively participated. How do i amend my 2009 tax return His modified adjusted gross income is $120,000. How do i amend my 2009 tax return When he files his 2013 return, he can deduct only $15,000 of his passive activity loss. How do i amend my 2009 tax return He must carry over the remaining $16,000 passive activity loss to 2014. How do i amend my 2009 tax return He figures his deduction and carryover as follows: Adjusted gross income, modified as required $120,000       Minus amount not subject to phaseout 100,000 Amount subject to phaseout rule $20,000 Multiply by 50% × 50% Required reduction to special allowance $10,000 Maximum special allowance $25,000 Minus required reduction (see above) 10,000 Adjusted special allowance $15,000 Passive loss from rental real estate $31,000 Deduction allowable/Adjusted  special allowance (see above) 15,000       Amount that must be carried forward $16,000 Exceptions to the phaseout rules. How do i amend my 2009 tax return   A higher phaseout range applies to rehabilitation investment credits from rental real estate activities. How do i amend my 2009 tax return For those credits, the phaseout of the $25,000 special allowance starts when your modified adjusted gross income exceeds $200,000 ($100,000 if you are a married individual filing a separate return and living apart at all times during the year). How do i amend my 2009 tax return   There is no phaseout of the $25,000 special allowance for low-income housing credits or for the CRD. How do i amend my 2009 tax return Ordering rules. How do i amend my 2009 tax return   If you have more than one of the exceptions to the phaseout rules in the same tax year, you must apply the $25,000 phaseout against your passive activity losses and credits in the following order. How do i amend my 2009 tax return The portion of passive activity losses not attributable to the CRD. How do i amend my 2009 tax return The portion of passive activity losses attributable to the CRD. How do i amend my 2009 tax return The portion of passive activity credits attributable to credits other than the rehabilitation and low-income housing credits. How do i amend my 2009 tax return The portion of passive activity credits attributable to the rehabilitation credit. How do i amend my 2009 tax return The portion of passive activity credits attributable to the low-income housing credit. How do i amend my 2009 tax return Activities That Are Not Passive Activities The following are not passive activities. How do i amend my 2009 tax return Trade or business activities in which you materially participated for the tax year. How do i amend my 2009 tax return A working interest in an oil or gas well which you hold directly or through an entity that does not limit your liability (such as a general partner interest in a partnership). How do i amend my 2009 tax return It does not matter whether you materially participated in the activity for the tax year. How do i amend my 2009 tax return However, if your liability was limited for part of the year (for example, you converted your general partner interest to a limited partner interest during the year) and you had a net loss from the well for the year, some of your income and deductions from the working interest may be treated as passive activity gross income and passive activity deductions. How do i amend my 2009 tax return  See Temporary Regulations section 1. How do i amend my 2009 tax return 469-1T(e)(4)(ii). How do i amend my 2009 tax return The rental of a dwelling unit that you also used for personal purposes during the year for more than the greater of 14 days or 10% of the number of days during the year that the home was rented at a fair rental. How do i amend my 2009 tax return An activity of trading personal property for the account of those who own interests in the activity. How do i amend my 2009 tax return See Temporary Regulations section 1. How do i amend my 2009 tax return 469-1T(e)(6). How do i amend my 2009 tax return Rental real estate activities in which you materially participated as a real estate professional. How do i amend my 2009 tax return See Real Estate Professional , later. How do i amend my 2009 tax return You should not enter income and losses from these activities on Form 8582. How do i amend my 2009 tax return Instead, enter them on the forms or schedules you would normally use. How do i amend my 2009 tax return Material Participation A trade or business activity is not a passive activity if you materially participated in the activity. How do i amend my 2009 tax return Material participation tests. How do i amend my 2009 tax return    You materially participated in a trade or business activity for a tax year if you satisfy any of the following tests. How do i amend my 2009 tax return You participated in the activity for more than 500 hours. How do i amend my 2009 tax return Your participation was substantially all the participation in the activity of all individuals for the tax year, including the participation of individuals who did not own any interest in the activity. How do i amend my 2009 tax return You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual (including individuals who did not own any interest in the activity) for the year. How do i amend my 2009 tax return The activity is a significant participation activity, and you participated in all significant participation activities for more than 500 hours. How do i amend my 2009 tax return A significant participation activity is any trade or business activity in which you participated for more than 100 hours during the year and in which you did not materially participate under any of the material participation tests, other than this test. How do i amend my 2009 tax return See Significant Participation Passive Activities , under Recharacterization of Passive Income, later. How do i amend my 2009 tax return You materially participated in the activity for any 5 (whether or not consecutive) of the 10 immediately preceding tax years. How do i amend my 2009 tax return The activity is a personal service activity in which you materially participated for any 3 (whether or not consecutive) preceding tax years. How do i amend my 2009 tax return An activity is a personal service activity if it involves the performance of personal services in the fields of health (including veterinary services), law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or any other trade or business in which capital is not a material income-producing factor. How do i amend my 2009 tax return Based on all the facts and circumstances, you participated in the activity on a regular, continuous, and substantial basis during the year. How do i amend my 2009 tax return   You did not materially participate in the activity under test (7) if you participated in the activity for 100 hours or less during the year. How do i amend my 2009 tax return Your participation in managing the activity does not count in determining whether you materially participated under this test if: Any person other than you received compensation for managing the activity, or Any individual spent more hours during the tax year managing the activity than you did (regardless of whether the individual was compensated for the management services). How do i amend my 2009 tax return Participation. How do i amend my 2009 tax return   In general, any work you do in connection with an activity in which you own an interest is treated as participation in the activity. How do i amend my 2009 tax return Work not usually performed by owners. How do i amend my 2009 tax return   You do not treat the work you do in connection with an activity as participation in the activity if both of the following are true. How do i amend my 2009 tax return The work is not work that is customarily done by the owner of that type of activity. How do i amend my 2009 tax return One of your main reasons for doing the work is to avoid the disallowance of any loss or credit from the activity under the passive activity rules. How do i amend my 2009 tax return Participation as an investor. How do i amend my 2009 tax return   You do not treat the work you do in your capacity as an investor in an activity as participation unless you are directly involved in the day-to-day management or operations of the activity. How do i amend my 2009 tax return Work you do as an investor includes: Studying and reviewing financial statements or reports on operations of the activity, Preparing or compiling summaries or analyses of the finances or operations of the activity for your own use, and Monitoring the finances or operations of the activity in a nonmanagerial capacity. How do i amend my 2009 tax return Spouse's participation. How do i amend my 2009 tax return   Your participation in an activity includes your spouse's participation. How do i amend my 2009 tax return This applies even if your spouse did not own any interest in the activity and you and your spouse do not file a joint return for the year. How do i amend my 2009 tax return Proof of participation. How do i amend my 2009 tax return You can use any reasonable method to prove your participation in an activity for the year. How do i amend my 2009 tax return You do not have to keep contemporaneous daily time reports, logs, or similar documents if you can establish your participation in some other way. How do i amend my 2009 tax return For example, you can show the services you performed and the approximate number of hours spent by using an appointment book, calendar, or narrative summary. How do i amend my 2009 tax return Limited partners. How do i amend my 2009 tax return   If you owned an activity as a limited partner, you generally are not treated as materially participating in the activity. How do i amend my 2009 tax return However, you are treated as materially participating in the activity if you met test (1), (5), or (6) under Material participation tests , discussed earlier, for the tax year. How do i amend my 2009 tax return   You are not treated as a limited partner, however, if you also were a general partner in the partnership at all times during the partnership's tax year ending with or within your tax year (or, if shorter, during that part of the partnership's tax year in which you directly or indirectly owned your limited partner interest). How do i amend my 2009 tax return Retired or disabled farmer and surviving spouse of a farmer. How do i amend my 2009 tax return   If you are a retired or disabled farmer, you are treated as materially participating in a farming activity if you materially participated for 5 or more of the 8 years before your retirement or disability. How do i amend my 2009 tax return Similarly, if you are a surviving spouse of a farmer, you are treated as materially participating in a farming activity if the real property used in the activity meets the estate tax rules for special valuation of farm property passed from a qualifying decedent, and you actively manage the farm. How do i amend my 2009 tax return Corporations. How do i amend my 2009 tax return   A closely held corporation or a personal service corporation is treated as materially participating in an activity only if one or more shareholders holding more than 50% by value of the outstanding stock of the corporation materially participate in the activity. How do i amend my 2009 tax return   A closely held corporation can also satisfy the material participation standard by meeting the first two requirements for the qualifying business exception from the at-risk limits. How do i amend my 2009 tax return See Special exception for qualified corporations under Activities Covered by the At-Risk Rules, later. How do i amend my 2009 tax return Real Estate Professional Generally, rental activities are passive activities even if you materially participated in them. How do i amend my 2009 tax return However, if you qualified as a real estate professional, rental real estate activities in which you materially participated are not passive activities. How do i amend my 2009 tax return For this purpose, each interest you have in a rental real estate activity is a separate activity, unless you choose to treat all interests in rental real estate activities as one activity. How do i amend my 2009 tax return See the Instructions for Schedule E (Form 1040), Supplemental Income and Loss, for information about making this choice. How do i amend my 2009 tax return If you qualified as a real estate professional for 2013, report income or losses from rental real estate activities in which you materially participated as nonpassive income or losses, and complete line 43 of Schedule E (Form 1040). How do i amend my 2009 tax return If you also have an unallowed loss from these activities from an earlier year when you did not qualify, see Treatment of former passive activities under Passive Activities, earlier. How do i amend my 2009 tax return Qualifications. How do i amend my 2009 tax return   You qualified as a real estate professional for the year if you met both of the following requirements. How do i amend my 2009 tax return More than half of the personal services you performed in all trades or businesses during the tax year were performed in real property trades or businesses in which you materially participated. How do i amend my 2009 tax return You performed more than 750 hours of services during the tax year in real property trades or businesses in which you materially participated. How do i amend my 2009 tax return   Do not count personal services you performed as an employee in real property trades or businesses unless you were a 5% owner of your employer. How do i amend my 2009 tax return You were a 5% owner if you owned (or are considered to have owned) more than 5% of your employer's outstanding stock, outstanding voting stock, or capital or profits interest. How do i amend my 2009 tax return   If you file a joint return, do not count your spouse's personal services to determine whether you met the preceding requirements. How do i amend my 2009 tax return However, you can count your spouse's participation in an activity in determining if you materially participated. How do i amend my 2009 tax return Real property trades or businesses. How do i amend my 2009 tax return   A real property trade or business is a trade or business that does any of the following with real property. How do i amend my 2009 tax return Develops or redevelops it. How do i amend my 2009 tax return Constructs or reconstructs it. How do i amend my 2009 tax return Acquires it. How do i amend my 2009 tax return Converts it. How do i amend my 2009 tax return Rents or leases it. How do i amend my 2009 tax return Operates or manages it. How do i amend my 2009 tax return Brokers it. How do i amend my 2009 tax return Closely held corporations. How do i amend my 2009 tax return   A closely held corporation can qualify as a real estate professional if more than 50% of the gross receipts for its tax year came from real property trades or businesses in which it materially participated. How do i amend my 2009 tax return Passive Activity Income and Deductions In figuring your net income or loss from a passive activity, take into account only passive activity income and passive activity deductions. How do i amend my 2009 tax return Self-charged interest. How do i amend my 2009 tax return   Certain self-charged interest income or deductions may be treated as passive activity gross income or passive activity deductions if the loan proceeds are used in a passive activity. How do i amend my 2009 tax return   Generally, self-charged interest income and deductions result from loans between you and a partnership or S corporation in which you had a direct or indirect ownership interest. How do i amend my 2009 tax return This includes both loans you made to the partnership or S corporation and loans the partnership or S corporation made to you. How do i amend my 2009 tax return   It also includes loans from one partnership or S corporation to another partnership or S corporation if each owner in the borrowing entity has the same proportional ownership interest in the lending entity. How do i amend my 2009 tax return    Exception. How do i amend my 2009 tax return The self-charged interest rules do not apply to your interest in a partnership or S corporation if the entity made an election under Regulations section 1. How do i amend my 2009 tax return 469-7(g) to avoid the application of these rules. How do i amend my 2009 tax return For more details on the self-charged interest rules, see Regulations section 1. How do i amend my 2009 tax return 469-7. How do i amend my 2009 tax return Passive Activity Income Passive activity income includes all income from passive activities and generally includes gain from disposition of an interest in a passive activity or property used in a passive activity. How do i amend my 2009 tax return Passive activity income does not include the following items. How do i amend my 2009 tax return Income from an activity that is not a passive activity. How do i amend my 2009 tax return These activities are discussed under Activities That Are Not Passive Activities , earlier. How do i amend my 2009 tax return Portfolio income. How do i amend my 2009 tax return This includes interest, dividends, annuities, and royalties not derived in the ordinary course of a trade or business. How do i amend my 2009 tax return It includes gain or loss from the disposition of property that produces these types of income or that is held for investment. How do i amend my 2009 tax return The exclusion for portfolio income does not apply to self-charged interest treated as passive activity income. How do i amend my 2009 tax return For more information on self-charged interest, see Self-charged interest , earlier. How do i amend my 2009 tax return Personal service income. How do i amend my 2009 tax return This includes salaries, wages, commissions, self-employment income from trade or business activities in which you materially participated, deferred compensation, taxable social security and other retirement benefits, and payments from partnerships to partners for personal services. How do i amend my 2009 tax return Income from positive section 481 adjustments allocated to activities other than passive activities. How do i amend my 2009 tax return (Section 481 adjustments are adjustments that must be made due to changes in your accounting method. How do i amend my 2009 tax return ) Income or gain from investments of working capital. How do i amend my 2009 tax return Income from an oil or gas property if you treated any loss from a working interest in the property for any tax year beginning after 1986 as a nonpassive loss, as discussed in item (2) under Activities That Are Not Passive Activities , earlier. How do i amend my 2009 tax return This also applies to income from other oil and gas property the basis of which is determined wholly or partly by the basis of the property in the preceding sentence. How do i amend my 2009 tax return Any income from intangible property, such as a patent, copyright, or literary, musical, or artistic composition, if your personal efforts significantly contributed to the creation of the property. How do i amend my 2009 tax return Any other income that must be treated as nonpassive income. How do i amend my 2009 tax return See Recharacterization of Passive Income , later. How do i amend my 2009 tax return Overall gain from any interest in a publicly traded partnership. How do i amend my 2009 tax return See Publicly Traded Partnerships (PTPs) in the instructions for Form 8582. How do i amend my 2009 tax return State, local, and foreign income tax refunds. How do i amend my 2009 tax return Income from a covenant not to compete. How do i amend my 2009 tax return Reimbursement of a casualty or theft loss included in gross income to recover all or part of a prior year loss deduction, if the loss deduction was not a passive activity deduction. How do i amend my 2009 tax return Alaska Permanent Fund dividends. How do i amend my 2009 tax return Cancellation of debt income, if at the time the debt is discharged the debt is not allocated to passive activities under the interest expense allocation rules. How do i amend my 2009 tax return See chapter 4 of Publication 535, Business Expenses, for information about the rules for allocating interest. How do i amend my 2009 tax return Disposition of property interests. How do i amend my 2009 tax return   Gain on the disposition of an interest in property generally is passive activity income if, at the time of the disposition, the property was used in an activity that was a passive activity in the year of disposition. How do i amend my 2009 tax return The gain generally is not passive activity income if, at the time of disposition, the property was used in an activity that was not a passive activity in the year of disposition. How do i amend my 2009 tax return An exception to this general rule may apply if you previously used the property in a different activity. How do i amend my 2009 tax return Exception for more than one use in the preceding 12 months. How do i amend my 2009 tax return   If you used the property in more than one activity during the 12-month period before its disposition, you must allocate the gain between the activities on a basis that reasonably reflects the property's use during that period. How do i amend my 2009 tax return Any gain allocated to a passive activity is passive activity income. How do i amend my 2009 tax return   For this purpose, an allocation of the gain solely to the activity in which the property was mainly used during that period reasonably reflects the property's use if the fair market value of your interest in the property is not more than the lesser of: $10,000, or 10% of the total of the fair market value of your interest in the property and the fair market value of all other property used in that activity immediately before the disposition. How do i amend my 2009 tax return Exception for substantially appreciated property. How do i amend my 2009 tax return   The gain is passive activity income if the fair market value of the property at disposition was more than 120% of its adjusted basis and either of the following conditions applies. How do i amend my 2009 tax return You used the property in a passive activity for 20% of the time you held your interest in the property. How do i amend my 2009 tax return You used the property in a passive activity for the entire 24-month period before its disposition. How do i amend my 2009 tax return If neither condition applies, the gain is not passive activity income. How do i amend my 2009 tax return However, it is treated as portfolio income only if you held the property for investment for more than half of the time you held it in nonpassive activities. How do i amend my 2009 tax return   For this purpose, treat property you held through a corporation (other than an S corporation) or other entity whose owners receive only portfolio income as property held in a nonpassive activity and as property held for investment. How do i amend my 2009 tax return Also, treat the date you agree to transfer your interest for a fixed or determinable amount as the disposition date. How do i amend my 2009 tax return   If you used the property in more than one activity during the 12-month period before its disposition, this exception applies only to the part of the gain allocated to a passive activity under the rules described in the preceding discussion. How do i amend my 2009 tax return Disposition of property converted to inventory. How do i amend my 2009 tax return   If you disposed of property that you had converted to inventory from its use in another activity (for example, you sold condominium units you previously held for use in a rental activity), a special rule may apply. How do i amend my 2009 tax return Under this rule, you disregard the property's use as inventory and treat it as if it were still used in that other activity at the time of disposition. How do i amend my 2009 tax return This rule applies only if you meet all of the following conditions. How do i amend my 2009 tax return At the time of disposition, you held your interest in the property in a dealing activity (an activity that involves holding the property or similar property mainly for sale to customers in the ordinary course of a trade or business). How do i amend my 2009 tax return Your other activities included a nondealing activity (an activity that does not involve holding similar property for sale to customers in the ordinary course of a trade or business) in which you used the property for more than 80% of the period you held it. How do i amend my 2009 tax return You did not acquire or hold your interest in the property for the main purpose of selling it to customers in the ordinary course of a trade or business. How do i amend my 2009 tax return Passive Activity Deductions Generally, a deduction is a passive activity deduction for a taxable year if and only if such deduction either: Arises in connection with the conduct of an activity that is a passive activity for the tax year; or Is treated as a deduction from an activity for the tax year because it was disallowed by the passive activity rules in the preceding year and carried forward to the tax year. How do i amend my 2009 tax return For purposes of item (1), above, an item of deduction arises in the taxable year in which the item would be allowable as a deduction under the taxpayer's method of accounting if taxable income for all taxable years were determined without regard to the passive activity rules and without regard to the basis, excess farm loss, and at-risk limits. How do i amend my 2009 tax return See Coordination with other limitations on deductions that apply before the passive activity rules , later. How do i amend my 2009 tax return Passive activity deductions generally include losses from dispositions of property used in a passive activity at the time of the disposition and losses from a disposition of less than your entire interest in a passive activity. How do i amend my 2009 tax return Exceptions. How do i amend my 2009 tax return   Passive activity deductions do not include the following items. How do i amend my 2009 tax return Deductions for expenses (other than interest expense) that are clearly and directly allocable to portfolio income. How do i amend my 2009 tax return Qualified home mortgage interest, capitalized interest expenses, and other interest expenses (other than self-charged interest) properly allocable to passive activities. How do i amend my 2009 tax return For more information on self-charged interest, see Self-charged interest under Passive Activity Income and Deductions, earlier. How do i amend my 2009 tax return Losses from dispositions of property that produce portfolio income or property held for investment. How do i amend my 2009 tax return State, local, and foreign income taxes. How do i amend my 2009 tax return Miscellaneous itemized deductions that may be disallowed because of the 2%-of-adjusted-gross-income limit. How do i amend my 2009 tax return Charitable contribution deductions. How do i amend my 2009 tax return Net operating loss deductions. How do i amend my 2009 tax return Percentage depletion carryovers for oil and gas wells. How do i amend my 2009 tax return Capital loss carrybacks and carryovers. How do i amend my 2009 tax return Items of deduction from a passive activity that are disallowed under the limits on deductions that apply before the passive activity rules. How do i amend my 2009 tax return See Coordination with other limitations on deductions that apply before the passive activity rules , later. How do i amend my 2009 tax return Deductions and losses that would have been allowed for tax years beginning before 1987 but for basis or at-risk limits. How do i amend my 2009 tax return Net negative section 481 adjustments allocated to activities other than passive activities. How do i amend my 2009 tax return (Section 481 adjustments are adjustments required due to changes in accounting methods. How do i amend my 2009 tax return ) Casualty and theft losses, unless losses similar in cause and severity recur regularly in the activity. How do i amend my 2009 tax return The deduction for the employer-equivalent portion of self-employment tax. How do i amend my 2009 tax return Coordination with other limitations on deductions that apply before the passive activity rules. How do i amend my 2009 tax return   An item of deduction from a passive activity that is disallowed for a tax year under the basis or at-risk limitations is not a passive activity deduction for the tax year. How do i amend my 2009 tax return The following sections provide rules for figuring the extent to which items of deduction from a passive activity are disallowed for a tax year under the basis or at-risk limitations. How do i amend my 2009 tax return Proration of deductions disallowed under basis limitations. How do i amend my 2009 tax return   If any amount of your distributive share of a partnership's loss for the tax year is disallowed under the basis limitation, a ratable portion of your distributive share of each item of deduction or loss of the partnership is disallowed for the tax year. How do i amend my 2009 tax return For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of your distributive share of partnership loss that is disallowed for the taxable year; by The sum of your distributive shares of all items of deduction and loss of the partnership for the tax year. How do i amend my 2009 tax return   If any amount of your pro rata share of an S corporation's loss for the tax year is disallowed under the basis limitation, a ratable portion of your pro rata share of each item of deduction or loss of the S corporation is disallowed for the tax year. How do i amend my 2009 tax return For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of your share of S corporation loss that is disallowed for the tax year; by The sum of your pro rata shares of all items of deduction and loss of the corporation for the tax year. How do i amend my 2009 tax return Proration of deductions disallowed under at-risk limitation. How do i amend my 2009 tax return   If any amount of your loss from an activity (as defined in Activities Covered by the At-Risk Rules , later) is disallowed under the at-risk rules for the tax year, a ratable portion of each item of deduction or loss from the activity is disallowed for the tax year. How do i amend my 2009 tax return For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of the loss from the activity that is disallowed for the tax year; by The sum of all deductions from the activity for the taxable year. How do i amend my 2009 tax return Coordination of basis and at-risk limitations. How do i amend my 2009 tax return   The portion of any item of deduction or loss that is disallowed for the tax year under the basis limitations is not taken into account for the taxable year in determining the loss from an activity (as defined in Activities Covered by the At-Risk Rules , later) for purposes of applying the at-risk rules. How do i amend my 2009 tax return Separately identified items of deduction and loss. How do i amend my 2009 tax return   In identifying the items of deduction and loss from an activity that are not disallowed under the basis and at-risk limitations (and that therefore may be treated as passive activity deductions), you need not account separately for any item of deduction or loss unless such item may, if separately taken into account, result in an income tax liability different from that which would result were such item of deduction or loss taken into account separately. How do i amend my 2009 tax return   Items of deduction or loss that must be accounted for separately include (but are not limited to) items of deduction or loss that: Are attributable to separate activities. How do i amend my 2009 tax return See Grouping Your Activities , later. How do i amend my 2009 tax return Arise in a rental real estate activity in tax years in which you actively participate in such activity; Arise in a rental real estate activity in taxable years in which you do not actively participate in such activity; Arose in a taxable year beginning before 1987 and were not allowed for such taxable year under the basis or at-risk limitations; Are taken into account under section 613A(d) (relating to limitations on certain depletion deductions); Are taken into account under section 1211 (relating to the limitation on capital losses); Are taken into account under section 1231 (relating to property used in a trade or business and involuntary conversions). How do i amend my 2009 tax return See Section 1231 Gains and Losses in Publication 544 for more information. How do i amend my 2009 tax return Are attributable to pre-enactment interests in activities. How do i amend my 2009 tax return See Regulations section 1. How do i amend my 2009 tax return 469-11T(c). How do i amend my 2009 tax return Grouping Your Activities You can treat one or more trade or business activities, or rental activities, as a single activity if those activities form an appropriate economic unit for measuring gain or loss under the passive activity rules. How do i amend my 2009 tax return Grouping is important for a number of reasons. How do i amend my 2009 tax return If you group two activities into one larger activity, you need only show material participation in the activity as a whole. How do i amend my 2009 tax return But if the two activities are separate, you must show material participation in each one. How do i amend my 2009 tax return On the other hand, if you group two activities into one larger activity and you dispose of one of the two, then you have disposed of only part of your entire interest in the activity. How do i amend my 2009 tax return But if the two activities are separate and you dispose of one of them, then you have disposed of your entire interest in that activity. How do i amend my 2009 tax return Grouping can also be important in determining whether you meet the 10% ownership requirement for actively participating in a rental real estate activity. How do i amend my 2009 tax return Appropriate Economic Units Generally, to determine if activities form an appropriate economic unit, you must consider all the relevant facts and circumstances. How do i amend my 2009 tax return You can use any reasonable method of applying the relevant facts and circumstances in grouping activities. How do i amend my 2009 tax return The following factors have the greatest weight in determining whether activities form an appropriate economic unit. How do i amend my 2009 tax return All of the factors do not have to apply to treat more than one activity as a single activity. How do i amend my 2009 tax return The factors that you should consider are: The similarities and differences in the types of trades or businesses, The extent of common control, The extent of common ownership, The geographical location, and The interdependencies between or among activities, which may include the extent to which the activities: Buy or sell goods between or among themselves, Involve products or services that are generally provided together, Have the same customers, Have the same employees, or Use a single set of books and records to account for the activities. How do i amend my 2009 tax return Example 1. How do i amend my 2009 tax return John Jackson owns a bakery and a movie theater at a shopping mall in Baltimore and a bakery and movie theater in Philadelphia. How do i amend my 2009 tax return Based on all the relevant facts and circumstances, there may be more than one reasonable method for grouping John's activities. How do i amend my 2009 tax return For example, John may be able to group the movie theaters and the bakeries into: One activity, A movie theater activity and a bakery activity, A Baltimore activity and a Philadelphia activity, or Four separate activities. How do i amend my 2009 tax return Example 2. How do i amend my 2009 tax return Betty is a partner in ABC partnership, which sells nonfood items to grocery stores. How do i amend my 2009 tax return Betty is also a partner in DEF (a trucking business). How do i amend my 2009 tax return ABC and DEF are under common control. How do i amend my 2009 tax return The main part of DEF's business is transporting goods for ABC. How do i amend my 2009 tax return DEF is the only trucking business in which Betty is involved. How do i amend my 2009 tax return Based on the rules of this section, Betty treats ABC's wholesale activity and DEF's trucking activity as a single activity. How do i amend my 2009 tax return Consistency and disclosure requirement. How do i amend my 2009 tax return   Generally, when you group activities into appropriate economic units, you may not regroup those activities in a later tax year. How do i amend my 2009 tax return You must meet any disclosure requirements of the IRS when you first group your activities and when you add or dispose of any activities in your groupings. How do i amend my 2009 tax return   However, if the original grouping is clearly inappropriate or there is a material change in the facts and circumstances that makes the original grouping clearly inappropriate, you must regroup the activities and comply with any disclosure requirements of the IRS. How do i amend my 2009 tax return   See Disclosure Requirement , later. How do i amend my 2009 tax return Regrouping by the IRS. How do i amend my 2009 tax return   If any of the activities resulting from your grouping is not an appropriate economic unit and one of the primary purposes of your grouping (or failure to regroup) is to avoid the passive activity rules, the IRS may regroup your activities. How do i amend my 2009 tax return Rental activities. How do i amend my 2009 tax return   In general, you cannot group a rental activity with a trade or business activity. How do i amend my 2009 tax return However, you can group them together if the activities form an appropriate economic unit and: The rental activity is insubstantial in relation to the trade or business activity, The trade or business activity is insubstantial in relation to the rental activity, or Each owner of the trade or business activity has the same ownership interest in the rental activity, in which case the part of the rental activity that involves the rental of items of property for use in the trade or business activity may be grouped with the trade or business activity. How do i amend my 2009 tax return Example. How do i amend my 2009 tax return Herbert and Wilma are married and file a joint return. How do i amend my 2009 tax return Healthy Food, an S corporation, is a grocery store business. How do i amend my 2009 tax return Herbert is Healthy Food's only shareholder. How do i amend my 2009 tax return Plum Tower, an S corporation, owns and rents out the building. How do i amend my 2009 tax return Wilma is Plum Tower's only shareholder. How do i amend my 2009 tax return Plum Tower rents part of its building to Healthy Food. How do i amend my 2009 tax return Plum Tower's grocery store rental business and Healthy Food's grocery business are not insubstantial in relation to each other. How do i amend my 2009 tax return Herbert and Wilma file a joint return, so they are treated as one taxpayer for purposes of the passive activity rules. How do i amend my 2009 tax return The same owner (Herbert and Wilma) owns both Healthy Food and Plum Tower with the same ownership interest (100% in each). How do i amend my 2009 tax return If the grouping forms an appropriate economic unit, as discussed earlier, Herbert and Wilma can group Plum Tower's grocery store rental and Healthy Food's grocery business into a single trade or business activity. How do i amend my 2009 tax return Grouping of real and personal property rentals. How do i amend my 2009 tax return   In general, you cannot treat an activity involving the rental of real property and an activity involving the rental of personal property as a single activity. How do i amend my 2009 tax return However, you can treat them as a single activity if you provide the personal property in connection with the real property or the real property in connection with the personal property. How do i amend my 2009 tax return Certain activities may not be grouped. How do i amend my 2009 tax return   In general, if you own an interest as a limited partner or a limited entrepreneur in one of the following activities, you may not group that activity with any other activity in another type of business. How do i amend my 2009 tax return Holding, producing, or distributing motion picture films or video tapes. How do i amend my 2009 tax return Farming. How do i amend my 2009 tax return Leasing any section 1245 property (as defined in section 1245(a)(3) of the Internal Revenue Code). How do i amend my 2009 tax return For a list of section 1245 property, see Section 1245 property under Activities Covered by the At-Risk Rules , later. How do i amend my 2009 tax return Exploring for, or exploiting, oil and gas resources. How do i amend my 2009 tax return Exploring for, or exploiting, geothermal deposits. How do i amend my 2009 tax return   If you own an interest as a limited partner or a limited entrepreneur in an activity described in the list above, you may group that activity with another activity in the same type of business if the grouping forms an appropriate economic unit as discussed earlier. How do i amend my 2009 tax return Limited entrepreneur. How do i amend my 2009 tax return   A limited entrepreneur is a person who: Has an interest in an enterprise other than as a limited partner, and Does not actively participate in the management of the enterprise. How do i amend my 2009 tax return Activities conducted through another entity. How do i amend my 2009 tax return   A personal service corporation, closely held corporation, partnership, or S corporation must group its activities using the rules discussed in this section. How do i amend my 2009 tax return Once the entity groups its activities, you, as the partner or shareholder of the entity, may group those activities (following the rules of this section): With each other, With activities conducted directly by you, or With activities conducted through other entities. How do i amend my 2009 tax return    You may not treat activities grouped together by the entity as separate activities. How do i amend my 2009 tax return Personal service and closely held corporations. How do i amend my 2009 tax return   You may group an activity conducted through a personal service or closely held corporation with your other activities only to determine whether you materially or significantly participated in those other activities. How do i amend my 2009 tax return See Material Participation , earlier, and Significant Participation Passive Activities , later. How do i amend my 2009 tax return Publicly traded partnership (PTP). How do i amend my 2009 tax return   You may not group activities conducted through a PTP with any other activity, including an activity conducted through another PTP. How do i amend my 2009 tax return Partial dispositions. How do i amend my 2009 tax return   If you dispose of substantially all of an activity during your tax year, you may treat the part disposed of as a separate activity. How do i amend my 2009 tax return However, you can do this only if you can show with reasonable certainty: The amount of deductions and credits disallowed in prior years under the passive activity rules that is allocable to the part of the activity disposed of, and The amount of gross income and any other deductions and credits for the current tax year that is allocable to the part of the activity disposed of. How do i amend my 2009 tax return Disclosure Requirement For tax years beginning after January 24, 2010, the following disclosure requirements for groupings apply. How do i amend my 2009 tax return You are required to report certain changes to your groupings that occur during the tax year to the IRS. How do i amend my 2009 tax return If you fail to report these changes, each trade or business activity or rental activity will be treated as a separate activity. How do i amend my 2009 tax return You will be considered to have made a timely disclosure if you filed all affected income tax returns consistent with the claimed grouping and make the required disclosure on the income tax return for the year in which you first discovered the failure to disclose. How do i amend my 2009 tax return If the IRS discovered the failure to disclose, you must have reasonable cause for not making the required disclosure. How do i amend my 2009 tax return New grouping. How do i amend my 2009 tax return   You must file a written statement with your original income tax return for the first tax year in which two or more activities are originally grouped into a single activity. How do i amend my 2009 tax return The statement must provide the names, addresses, and employer identification numbers (EINs), if applicable, for the activities being grouped as a single activity. How do i amend my 2009 tax return In addition, the statement must contain a declaration that the grouped activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. How do i amend my 2009 tax return Addition to an existing grouping. How do i amend my 2009 tax return   You must file a written statement with your original income tax return for the tax year in which you add a new activity to an existing group. How do i amend my 2009 tax return The statement must provide the name, address, and EIN, if applicable, for the activity that is being added and for the activities in the existing group. How do i amend my 2009 tax return In addition, the statement must contain a declaration that the activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. How do i amend my 2009 tax return Regrouping. How do i amend my 2009 tax return   You must file a written statement with your original income tax return for the tax year in which you regroup the activities. How do i amend my 2009 tax return The statement must provide the names, addresses, and EINs, if applicable, for the activities that are being regrouped. How do i amend my 2009 tax return If two or more activities are being regrouped into a single activity, the statement must contain a declaration that the regrouped activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. How do i amend my 2009 tax return In addition, the statement must contain an explanation of the material change in the facts and circumstances that made the original grouping clearly inappropriate. How do i amend my 2009 tax return Groupings by partnerships and S corporations. How do i amend my 2009 tax return   Partnerships and S corporations are not subject to the rules for new grouping, addition to an existing grouping, or regrouping. How do i amend my 2009 tax return Instead, they must comply with the disclosure instructions for grouping activities provided in their Form 1065, U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Return of Partnership Income, or Form 1120S, U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Income Tax Return for an S Corporation, whichever is applicable. How do i amend my 2009 tax return   The partner or shareholder is not required to make a separate disclosure of the groupings disclosed by the entity unless the partner or shareholder: Groups together any of the activities that the entity does not group together, Groups the entity's activities with activities conducted directly by the partner or shareholder, or Groups an entity's activities with activities conducted through another entity. How do i amend my 2009 tax return   A partner or shareholder may not treat activities grouped together by the entity as separate activities. How do i amend my 2009 tax return Recharacterization of Passive Income Net income from the following passive activities may have to be recharacterized and excluded from passive activity income. How do i amend my 2009 tax return Significant participation passive activities, Rental of property when less than 30% of the unadjusted basis of the property is subject to depreciation, Equity-financed lending activities, Rental of property incidental to development activities, Rental of property to nonpassive activities, and Licensing of intangible property by  pass-through entities. How do i amend my 2009 tax return If you are engaged in or have an interest in one of these activities during the tax year (either directly or through a partnership or an S corporation), combine the income and losses from the activity to determine if you have a net loss or net income from that activity. How do i amend my 2009 tax return If the result is a net loss, treat the income and losses the same as any other income or losses from that type of passive activity (trade or business activity or rental activity). How do i amend my 2009 tax return If the result is net income, do not enter any of the income or losses from the activity or property on Form 8582 or its worksheets. How do i amend my 2009 tax return Instead, enter income or losses on the form and schedules you normally use. How do i amend my 2009 tax return However, see Significant Participation Passive Activities , later, if the activity is a significant participation passive activity and you also have a net loss from a different significant participation passive activity. How do i amend my 2009 tax return Limit on recharacterized passive income. How do i amend my 2009 tax return   The total amount that you treat as nonpassive income under the rules described later in this discussion for significant participation passive activities, rental of nondepreciable property, and equity-financed lending activities cannot exceed the greatest amount that you treat as nonpassive income under any one of these rules. How do i amend my 2009 tax return Investment income and investment expense. How do i amend my 2009 tax return   To figure your investment interest expense limitation on Form 4952, treat as investment income any net passive income recharacterized as nonpassive income from rental of nondepreciable property, equity-financed lending activity, or licensing of intangible property by a pass-through entity. How do i amend my 2009 tax return Significant Participation Passive Activities A significant participation passive activity is any trade or business activity in which you participated for more than 100 hours during the tax year but did not materially participate. How do i amend my 2009 tax return If your gross income from all significant participation passive activities is more than your deductions from those activities, a part of your net income from each significant participation passive activity is treated as nonpassive income. How do i amend my 2009 tax return Corporations. How do i amend my 2009 tax return   An activity of a personal service corporation or closely held corporation is a significant participation passive activity if both of the following statements are true. How do i amend my 2009 tax return The corporation is not treated as materially participating in the activity for the year. How do i amend my 2009 tax return One or more individuals, each of whom is treated as significantly participating in the activity, directly or indirectly hold (in total) more than 50% (by value) of the corporation's outstanding stock. How do i amend my 2009 tax return Worksheet A. How do i amend my 2009 tax return   Complete Worksheet A. How do i amend my 2009 tax return Significant Participation Passive Activities , below, if you have income or losses from any significant participation activity. How do i amend my 2009 tax return Begin by entering the name of each activity in the left column. How do i amend my 2009 tax return Column (a). How do i amend my 2009 tax return   Enter the number of hours you participated in each activity and total the column. How do i amend my 2009 tax return   If the total is more than 500, do not complete Worksheet A or B. How do i amend my 2009 tax return None of the activities are passive activities because you satisfy test 4 for material participation. How do i amend my 2009 tax return (See Material participation tests , earlier. How do i amend my 2009 tax return ) Report all the income and losses from these activities on the forms and schedules you normally use. How do i amend my 2009 tax return Do not include the income and losses on Form 8582. How do i amend my 2009 tax return Column (b). How do i amend my 2009 tax return   Enter the net loss, if any, from the activity. How do i amend my 2009 tax return Net loss from an activity means either: The activity's current year net loss (if any) plus prior year unallowed losses (if any), or The excess of prior year unallowed losses over the current year net income (if any). How do i amend my 2009 tax return Enter -0- here if the prior year unallowed loss is the same as the current year net income. How do i amend my 2009 tax return Column (c). How do i amend my 2009 tax return   Enter net income (if any) from the activity. How do i amend my 2009 tax return Net income means the excess of the current year's net income from the activity over any prior year unallowed losses from the activity. How do i amend my 2009 tax return Column (d). How do i amend my 2009 tax return   Combine amounts in the Totals row for columns (b) and (c) and enter the total net income or net loss in the Totals row of column (d). How do i amend my 2009 tax return If column (d) is a net loss, skip Worksheet B, Significant Participation Activities With Net Income. How do i amend my 2009 tax return Include the income and losses in Worksheet 3 of Form 8582 (or Worksheet 2 in the Form 88
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The How Do I Amend My 2009 Tax Return

How do i amend my 2009 tax return Publication 596 - Main Content Table of Contents Chapter 1—Rules for EveryoneRule 1—Adjusted Gross Income (AGI) Limits Rule 2—You Must Have a Valid Social Security Number (SSN) Rule 3—Your Filing Status Cannot Be Married Filing Separately Rule 4—You Must Be a U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Citizen or Resident Alien All Year Rule 5—You Cannot File Form 2555 or Form 2555-EZ Rule 6—Your Investment Income Must Be $3,300 or Less Rule 7—You Must Have Earned Income Chapter 2—Rules If You Have a Qualifying ChildRule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer Chapter 3—Rules If You Do Not Have a Qualifying ChildRule 11—You Must Be at Least Age 25 but Under Age 65 Rule 12—You Cannot Be the Dependent of Another Person Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer Rule 14—You Must Have Lived in the United States More Than Half of the Year Chapter 4—Figuring and Claiming the EICRule 15—Earned Income Limits IRS Will Figure the EIC for You How To Figure the EIC Yourself Schedule EIC Chapter 5—Disallowance of the EICForm 8862 Are You Prohibited From Claiming the EIC for a Period of Years? Chapter 6—Detailed ExamplesExample 1—Sharon Rose Example 2—Cynthia and Jerry Grey Chapter 1—Rules for Everyone This chapter discusses Rules 1 through 7. How do i amend my 2009 tax return You must meet all seven rules to qualify for the earned income credit. How do i amend my 2009 tax return If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the publication. How do i amend my 2009 tax return If you meet all seven rules in this chapter, then read either chapter 2 or chapter 3 (whichever applies) for more rules you must meet. How do i amend my 2009 tax return Rule 1—Adjusted Gross Income (AGI) Limits Your adjusted gross income (AGI) must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. How do i amend my 2009 tax return Adjusted gross income (AGI). How do i amend my 2009 tax return   AGI is the amount on line 4 of Form 1040EZ, line 22 of Form 1040A, or line 38 of Form 1040. How do i amend my 2009 tax return   If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. How do i amend my 2009 tax return You do not need to read the rest of this publication. How do i amend my 2009 tax return Example—AGI is more than limit. How do i amend my 2009 tax return Your AGI is $38,550, you are single, and you have one qualifying child. How do i amend my 2009 tax return You cannot claim the EIC because your AGI is not less than $37,870. How do i amend my 2009 tax return However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. How do i amend my 2009 tax return Community property. How do i amend my 2009 tax return   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. How do i amend my 2009 tax return This is different from the community property rules that apply under Rule 7. How do i amend my 2009 tax return Rule 2—You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). How do i amend my 2009 tax return Any qualifying child listed on Schedule EIC also must have a valid SSN. How do i amend my 2009 tax return (See Rule 8 if you have a qualifying child. How do i amend my 2009 tax return ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. How do i amend my 2009 tax return An example of a federally funded benefit is Medicaid. How do i amend my 2009 tax return If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return citizen or permanent resident, ask the SSA for a new social security card without the legend. How do i amend my 2009 tax return If you get the new card after you have already filed your return, you can file an amended return on Form 1040X, Amended U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Individual Income Tax Return, to claim the EIC. How do i amend my 2009 tax return U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return citizen. How do i amend my 2009 tax return   If you were a U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return citizen when you received your SSN, you have a valid SSN. How do i amend my 2009 tax return Valid for work only with INS authorization or DHS authorization. How do i amend my 2009 tax return   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. How do i amend my 2009 tax return SSN missing or incorrect. How do i amend my 2009 tax return   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. How do i amend my 2009 tax return Other taxpayer identification number. How do i amend my 2009 tax return   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). How do i amend my 2009 tax return ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. How do i amend my 2009 tax return No SSN. How do i amend my 2009 tax return   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). How do i amend my 2009 tax return You cannot claim the EIC. How do i amend my 2009 tax return Getting an SSN. How do i amend my 2009 tax return   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5 with the SSA. How do i amend my 2009 tax return You can get Form SS-5 online at www. How do i amend my 2009 tax return socialsecurity. How do i amend my 2009 tax return gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. How do i amend my 2009 tax return Filing deadline approaching and still no SSN. How do i amend my 2009 tax return   If the filing deadline is approaching and you still do not have an SSN, you have two choices. How do i amend my 2009 tax return Request an automatic 6-month extension of time to file your return. How do i amend my 2009 tax return You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Individual Income Tax Return. How do i amend my 2009 tax return For more information, see the instructions for Form 4868. How do i amend my 2009 tax return File the return on time without claiming the EIC. How do i amend my 2009 tax return After receiving the SSN, file an amended return, Form 1040X, claiming the EIC. How do i amend my 2009 tax return Attach a filled-in Schedule EIC, Earned Income Credit, if you have a qualifying child. How do i amend my 2009 tax return Rule 3—Your Filing Status Cannot Be “Married Filing Separately” If you are married, you usually must file a joint return to claim the EIC. How do i amend my 2009 tax return Your filing status cannot be “Married filing separately. How do i amend my 2009 tax return ” Spouse did not live with you. How do i amend my 2009 tax return   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. How do i amend my 2009 tax return In that case, you may be able to claim the EIC. How do i amend my 2009 tax return For detailed information about filing as head of household, see Publication 501, Exemptions, Standard Deduction, and Filing Information. How do i amend my 2009 tax return Rule 4—You Must Be a U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. How do i amend my 2009 tax return You can use that filing status only if one spouse is a U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return citizen or resident alien and you choose to treat the nonresident spouse as a U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return resident. How do i amend my 2009 tax return If you make this choice, you and your spouse are taxed on your worldwide income. How do i amend my 2009 tax return If you need more information on making this choice, get Publication 519, U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Tax Guide for Aliens. How do i amend my 2009 tax return If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). How do i amend my 2009 tax return Rule 5—You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. How do i amend my 2009 tax return You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. How do i amend my 2009 tax return U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return possessions are not foreign countries. How do i amend my 2009 tax return See Publication 54, Tax Guide for U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return Citizens and Resident Aliens Abroad, for more detailed information. How do i amend my 2009 tax return Rule 6—Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. How do i amend my 2009 tax return If your investment income is more than $3,300, you cannot claim the credit. How do i amend my 2009 tax return Form 1040EZ. How do i amend my 2009 tax return   If you file Form 1040EZ, your investment income is the total of the amount on line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. How do i amend my 2009 tax return Form 1040A. How do i amend my 2009 tax return   If you file Form 1040A, your investment income is the total of the amounts on lines 8a (taxable interest), 8b (tax-exempt interest), 9a (ordinary dividends), and 10 (capital gain distributions) on that form. How do i amend my 2009 tax return Form 1040. How do i amend my 2009 tax return   If you file Form 1040, use Worksheet 1 in this chapter to figure your investment income. How do i amend my 2009 tax return    Worksheet 1. How do i amend my 2009 tax return Investment Income If You Are Filing Form 1040 Use this worksheet to figure investment income for the earned income credit when you file Form 1040. How do i amend my 2009 tax return Interest and Dividends         1. How do i amend my 2009 tax return Enter any amount from Form 1040, line 8a 1. How do i amend my 2009 tax return   2. How do i amend my 2009 tax return Enter any amount from Form 1040, line 8b, plus any amount on Form 8814, line 1b 2. How do i amend my 2009 tax return   3. How do i amend my 2009 tax return Enter any amount from Form 1040, line 9a 3. How do i amend my 2009 tax return   4. How do i amend my 2009 tax return Enter the amount from Form 1040, line 21, that is from Form 8814 if you are filing that form to report your child's interest and dividend income on your return. How do i amend my 2009 tax return (If your child received an Alaska Permanent Fund dividend, use Worksheet 2 in this chapter to figure the amount to enter on this line. How do i amend my 2009 tax return ) 4. How do i amend my 2009 tax return   Capital Gain Net Income         5. How do i amend my 2009 tax return Enter the amount from Form 1040, line 13. How do i amend my 2009 tax return If the amount on that line is a loss, enter -0- 5. How do i amend my 2009 tax return       6. How do i amend my 2009 tax return Enter any gain from Form 4797, Sales of Business Property, line 7. How do i amend my 2009 tax return If the amount on that line is a loss, enter -0-. How do i amend my 2009 tax return (But, if you completed lines 8 and 9 of Form 4797, enter the amount from line 9 instead. How do i amend my 2009 tax return ) 6. How do i amend my 2009 tax return       7. How do i amend my 2009 tax return Substract line 6 of this worksheet from line 5 of this worksheet. How do i amend my 2009 tax return (If the result is less than zero, enter -0-. How do i amend my 2009 tax return ) 7. How do i amend my 2009 tax return   Royalties and Rental Income From Personal Property         8. How do i amend my 2009 tax return Enter any royalty income from Schedule E, line 23b, plus any income from the rental of personal property shown on Form 1040, line 21 8. How do i amend my 2009 tax return       9. How do i amend my 2009 tax return Enter any expenses from Schedule E, line 20, related to royalty income, plus any expenses from the rental of personal property deducted on Form 1040, line 36 9. How do i amend my 2009 tax return       10. How do i amend my 2009 tax return Subtract the amount on line 9 of this worksheet from the amount on line 8. How do i amend my 2009 tax return (If the result is less than zero, enter -0-. How do i amend my 2009 tax return ) 10. How do i amend my 2009 tax return   Passive Activities         11. How do i amend my 2009 tax return Enter the total of any net income from passive activities (such as income included on Schedule E, line 26, 29a (col. How do i amend my 2009 tax return (g)), 34a (col. How do i amend my 2009 tax return (d)), or 40). How do i amend my 2009 tax return (See instructions below for lines 11 and 12. How do i amend my 2009 tax return ) 11. How do i amend my 2009 tax return       12. How do i amend my 2009 tax return Enter the total of any losses from passive activities (such as losses included on Schedule E, line 26, 29b (col. How do i amend my 2009 tax return (f)), 34b (col. How do i amend my 2009 tax return (c)), or 40). How do i amend my 2009 tax return (See instructions below for lines 11 and 12. How do i amend my 2009 tax return ) 12. How do i amend my 2009 tax return       13. How do i amend my 2009 tax return Combine the amounts on lines 11 and 12 of this worksheet. How do i amend my 2009 tax return (If the result is less than zero, enter -0-. How do i amend my 2009 tax return ) 13. How do i amend my 2009 tax return   14. How do i amend my 2009 tax return Add the amounts on lines 1, 2, 3, 4, 7, 10, and 13. How do i amend my 2009 tax return Enter the total. How do i amend my 2009 tax return This is your investment income 14. How do i amend my 2009 tax return   15. How do i amend my 2009 tax return Is the amount on line 14 more than $3,300? ❑ Yes. How do i amend my 2009 tax return You cannot take the credit. How do i amend my 2009 tax return  ❑ No. How do i amend my 2009 tax return Go to Step 3 of the Form 1040 instructions for lines 64a and 64b to find out if you can take the credit (unless you are using this publication to find out if you can take the credit; in that case, go to Rule 7, next). How do i amend my 2009 tax return       Instructions for lines 11 and 12. How do i amend my 2009 tax return In figuring the amount to enter on lines 11 and 12, do not take into account any royalty income (or loss) included on line 26 of Schedule E or any amount included in your earned income. How do i amend my 2009 tax return To find out if the income on line 26 or line 40 of Schedule E is from a passive activity, see the Schedule E instructions. How do i amend my 2009 tax return If any of the rental real estate income (or loss) included on Schedule E, line 26, is not from a passive activity, print “NPA” and the amount of that income (or loss) on the dotted line next to line 26. How do i amend my 2009 tax return Worksheet 2. How do i amend my 2009 tax return Worksheet for Line 4 of Worksheet 1 Complete this worksheet only if Form 8814 includes an Alaska Permanent Fund dividend. How do i amend my 2009 tax return Note. How do i amend my 2009 tax return Fill out a separate Worksheet 2 for each Form 8814. How do i amend my 2009 tax return     1. How do i amend my 2009 tax return Enter the amount from Form 8814, line 2a 1. How do i amend my 2009 tax return   2. How do i amend my 2009 tax return Enter the amount from Form 8814, line 2b 2. How do i amend my 2009 tax return   3. How do i amend my 2009 tax return Subtract line 2 from line 1 3. How do i amend my 2009 tax return   4. How do i amend my 2009 tax return Enter the amount from Form 8814, line 1a 4. How do i amend my 2009 tax return   5. How do i amend my 2009 tax return Add lines 3 and 4 5. How do i amend my 2009 tax return   6. How do i amend my 2009 tax return Enter the amount of the child's Alaska Permanent Fund dividend 6. How do i amend my 2009 tax return   7. How do i amend my 2009 tax return Divide line 6 by line 5. How do i amend my 2009 tax return Enter the result as a decimal (rounded to at least three places) 7. How do i amend my 2009 tax return   8. How do i amend my 2009 tax return Enter the amount from Form 8814, line 12 8. How do i amend my 2009 tax return   9. How do i amend my 2009 tax return Multiply line 7 by line 8 9. How do i amend my 2009 tax return   10. How do i amend my 2009 tax return Subtract line 9 from line 8. How do i amend my 2009 tax return Enter the result on line 4 of Worksheet 1 10. How do i amend my 2009 tax return     (If filing more than one Form 8814, enter on line 4 of Worksheet 1 the total of the amounts on line 10 of all Worksheets 2. How do i amend my 2009 tax return )     Example—completing Worksheet 2. How do i amend my 2009 tax return Your 10-year-old child has taxable interest income of $400, an Alaska Permanent Fund dividend of $1,000, and ordinary dividends of $1,100, of which $500 are qualified dividends. How do i amend my 2009 tax return You choose to report this income on your return. How do i amend my 2009 tax return You enter $400 on line 1a of Form 8814, $2,100 ($1,000 + $1,100) on line 2a, and $500 on line 2b. How do i amend my 2009 tax return After completing lines 4 through 11, you enter $400 on line 12 of Form 8814 and line 21 of Form 1040. How do i amend my 2009 tax return On Worksheet 2, you enter $2,100 on line 1, $500 on line 2, $1,600 on line 3, $400 on line 4, $2,000 on line 5, $1,000 on line 6, 0. How do i amend my 2009 tax return 500 on line 7, $400 on line 8, $200 on line 9, and $200 on line 10. How do i amend my 2009 tax return You then enter $200 on line 4 of Worksheet 1. How do i amend my 2009 tax return Rule 7—You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. How do i amend my 2009 tax return If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. How do i amend my 2009 tax return If you are an employee, earned income includes all the taxable income you get from your employer. How do i amend my 2009 tax return Rule 15 has information that will help you figure the amount of your earned income. How do i amend my 2009 tax return If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the Form 1040 instructions. How do i amend my 2009 tax return Earned Income Earned income includes all of the following types of income. How do i amend my 2009 tax return Wages, salaries, tips, and other taxable employee pay. How do i amend my 2009 tax return Employee pay is earned income only if it is taxable. How do i amend my 2009 tax return Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. How do i amend my 2009 tax return But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained later in this chapter. How do i amend my 2009 tax return Net earnings from self-employment. How do i amend my 2009 tax return Gross income received as a statutory employee. How do i amend my 2009 tax return Wages, salaries, and tips. How do i amend my 2009 tax return    Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. How do i amend my 2009 tax return You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). How do i amend my 2009 tax return Nontaxable combat pay election. How do i amend my 2009 tax return   You can elect to include your nontaxable combat pay in earned income for the earned income credit. How do i amend my 2009 tax return The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. How do i amend my 2009 tax return Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. How do i amend my 2009 tax return For details, see Nontaxable combat pay in chapter 4. How do i amend my 2009 tax return Net earnings from self-employment. How do i amend my 2009 tax return   You may have net earnings from self-employment if: You own your own business, or You are a minister or member of a religious order. How do i amend my 2009 tax return Minister's housing. How do i amend my 2009 tax return   The rental value of a home or a housing allowance provided to a minister as part of the minister's pay generally is not subject to income tax but is included in net earnings from self-employment. How do i amend my 2009 tax return For that reason, it is included in earned income for the EIC (except in the cases described in Approved Form 4361 or Form 4029 , below). How do i amend my 2009 tax return Statutory employee. How do i amend my 2009 tax return   You are a statutory employee if you receive a Form W-2 on which the “Statutory employee” box (box 13) is checked. How do i amend my 2009 tax return You report your income and expenses as a statutory employee on Schedule C or C-EZ (Form 1040). How do i amend my 2009 tax return Strike benefits. How do i amend my 2009 tax return   Strike benefits paid by a union to its members are earned income. How do i amend my 2009 tax return Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. How do i amend my 2009 tax return Each approved form exempts certain income from social security taxes. How do i amend my 2009 tax return Each form is discussed here in terms of what is or is not earned income for the EIC. How do i amend my 2009 tax return Form 4361. How do i amend my 2009 tax return   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. How do i amend my 2009 tax return This includes wages, salaries, tips, and other taxable employee compensation. How do i amend my 2009 tax return A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. How do i amend my 2009 tax return Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. How do i amend my 2009 tax return Examples include fees for performing marriages and honoraria for delivering speeches. How do i amend my 2009 tax return Form 4029. How do i amend my 2009 tax return   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. How do i amend my 2009 tax return However, amounts you received as a self-employed individual do not count as earned income. How do i amend my 2009 tax return Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. How do i amend my 2009 tax return Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. How do i amend my 2009 tax return Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. How do i amend my 2009 tax return You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. How do i amend my 2009 tax return Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. How do i amend my 2009 tax return Report taxable pension payments on Form 1040, lines 16a and 16b, or Form 1040A, lines 12a and 12b. How do i amend my 2009 tax return Disability insurance payments. How do i amend my 2009 tax return   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. How do i amend my 2009 tax return It does not matter whether you have reached minimum retirement age. How do i amend my 2009 tax return If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. How do i amend my 2009 tax return ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. How do i amend my 2009 tax return Do not include any of these items in your earned income. How do i amend my 2009 tax return Earnings while an inmate. How do i amend my 2009 tax return   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. How do i amend my 2009 tax return This includes amounts for work performed while in a work release program or while in a halfway house. How do i amend my 2009 tax return Workfare payments. How do i amend my 2009 tax return   Nontaxable workfare payments are not earned income for the EIC. How do i amend my 2009 tax return These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector employment is not available, or (2) community service program activities. How do i amend my 2009 tax return Community property. How do i amend my 2009 tax return   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. How do i amend my 2009 tax return That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. How do i amend my 2009 tax return Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. How do i amend my 2009 tax return Nevada, Washington, and California domestic partners. How do i amend my 2009 tax return   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. How do i amend my 2009 tax return Your earned income for the EIC does not include any amount earned by your partner. How do i amend my 2009 tax return Your earned income includes the entire amount you earned. How do i amend my 2009 tax return For details, see Publication 555. How do i amend my 2009 tax return Conservation Reserve Program (CRP) payments. How do i amend my 2009 tax return   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. How do i amend my 2009 tax return Nontaxable military pay. How do i amend my 2009 tax return   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. How do i amend my 2009 tax return Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). How do i amend my 2009 tax return See Publication 3, Armed Forces' Tax Guide, for more information. How do i amend my 2009 tax return    Combat pay. How do i amend my 2009 tax return You can elect to include your nontaxable combat pay in earned income for the EIC. How do i amend my 2009 tax return See Nontaxable combat pay in chapter 4. How do i amend my 2009 tax return Chapter 2—Rules If You Have a Qualifying Child If you have met all the rules in chapter 1, use this chapter to see if you have a qualifying child. How do i amend my 2009 tax return This chapter discusses Rules 8 through 10. How do i amend my 2009 tax return You must meet all three of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit with a qualifying child. How do i amend my 2009 tax return You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. How do i amend my 2009 tax return (You cannot file Form 1040EZ. How do i amend my 2009 tax return ) You also must complete Schedule EIC and attach it to your return. How do i amend my 2009 tax return If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. How do i amend my 2009 tax return No qualifying child. How do i amend my 2009 tax return   If you do not meet Rule 8, you do not have a qualifying child. How do i amend my 2009 tax return Read chapter 3 to find out if you can get the earned income credit without a qualifying child. How do i amend my 2009 tax return Rule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. How do i amend my 2009 tax return The fours tests are: Relationship, Age, Residency, and Joint return. How do i amend my 2009 tax return The four tests are illustrated in Figure 1. How do i amend my 2009 tax return The paragraphs that follow contain more information about each test. How do i amend my 2009 tax return Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). How do i amend my 2009 tax return The following definitions clarify the relationship test. How do i amend my 2009 tax return Adopted child. How do i amend my 2009 tax return   An adopted child is always treated as your own child. How do i amend my 2009 tax return The term “adopted child” includes a child who was lawfully placed with you for legal adoption. How do i amend my 2009 tax return Foster child. How do i amend my 2009 tax return   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. How do i amend my 2009 tax return (An authorized placement agency includes a state or local government agency. How do i amend my 2009 tax return It also includes a tax-exempt organization licensed by a state. How do i amend my 2009 tax return In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. How do i amend my 2009 tax return ) Example. How do i amend my 2009 tax return Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. How do i amend my 2009 tax return Debbie is your foster child. How do i amend my 2009 tax return Figure 1. How do i amend my 2009 tax return Tests for Qualifying Child Please click here for the text description of the image. How do i amend my 2009 tax return Conditions for Qualifying Child Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly, or Permanently and totally disabled at any time during 2013, regardless of age. How do i amend my 2009 tax return The following examples and definitions clarify the age test. How do i amend my 2009 tax return Example 1—child not under age 19. How do i amend my 2009 tax return Your son turned 19 on December 10. How do i amend my 2009 tax return Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. How do i amend my 2009 tax return Example 2—child not younger than you or your spouse. How do i amend my 2009 tax return Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. How do i amend my 2009 tax return He is not disabled. How do i amend my 2009 tax return Both you and your spouse are 21 years old, and you file a joint return. How do i amend my 2009 tax return Your brother is not your qualifying child because he is not younger than you or your spouse. How do i amend my 2009 tax return Example 3—child younger than your spouse but not younger than you. How do i amend my 2009 tax return The facts are the same as in Example 2 except that your spouse is 25 years old. How do i amend my 2009 tax return Because your brother is younger than your spouse, he is your qualifying child, even though he is not younger than you. How do i amend my 2009 tax return Student defined. How do i amend my 2009 tax return   To qualify as a student, your child 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 regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. How do i amend my 2009 tax return   The 5 calendar months need not be consecutive. How do i amend my 2009 tax return   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. How do i amend my 2009 tax return School defined. How do i amend my 2009 tax return   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. How do i amend my 2009 tax return However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. How do i amend my 2009 tax return Vocational high school students. How do i amend my 2009 tax return   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. How do i amend my 2009 tax return Permanently and totally disabled. How do i amend my 2009 tax return   Your child is permanently and totally disabled if both of the following apply. How do i amend my 2009 tax return He or she cannot engage in any substantial gainful activity because of a physical or mental condition. How do i amend my 2009 tax return A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. How do i amend my 2009 tax return Residency Test Your child must have lived with you in the United States for more than half of 2013. How do i amend my 2009 tax return The following definitions clarify the residency test. How do i amend my 2009 tax return United States. How do i amend my 2009 tax return   This means the 50 states and the District of Columbia. How do i amend my 2009 tax return It does not include Puerto Rico or U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return possessions such as Guam. How do i amend my 2009 tax return Homeless shelter. How do i amend my 2009 tax return   Your home can be any location where you regularly live. How do i amend my 2009 tax return You do not need a traditional home. How do i amend my 2009 tax return For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. How do i amend my 2009 tax return Military personnel stationed outside the United States. How do i amend my 2009 tax return   U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. How do i amend my 2009 tax return Extended active duty. How do i amend my 2009 tax return   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. How do i amend my 2009 tax return Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. How do i amend my 2009 tax return Birth or death of child. How do i amend my 2009 tax return    child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. How do i amend my 2009 tax return Temporary absences. How do i amend my 2009 tax return   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. How do i amend my 2009 tax return Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. How do i amend my 2009 tax return Kidnapped child. How do i amend my 2009 tax return   A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. How do i amend my 2009 tax return The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. How do i amend my 2009 tax return This treatment applies for all years until the child is returned. How do i amend my 2009 tax return However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. How do i amend my 2009 tax return   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. How do i amend my 2009 tax return Joint Return Test To meet this test, the child cannot file a joint return for the year. How do i amend my 2009 tax return Exception. How do i amend my 2009 tax return   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. How do i amend my 2009 tax return Example 1—child files joint return. How do i amend my 2009 tax return You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. How do i amend my 2009 tax return He earned $25,000 for the year. How do i amend my 2009 tax return The couple files a joint return. How do i amend my 2009 tax return Because your daughter and her husband file a joint return, she is not your qualifying child. How do i amend my 2009 tax return Example 2—child files joint return to get refund of tax withheld. How do i amend my 2009 tax return Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. How do i amend my 2009 tax return They do not have a child. How do i amend my 2009 tax return Neither is required to file a tax return. How do i amend my 2009 tax return Taxes were taken out of their pay, so they file a joint return only to get a refund of the withheld taxes. How do i amend my 2009 tax return The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. How do i amend my 2009 tax return Example 3—child files joint return to claim American opportunity credit. How do i amend my 2009 tax return The facts are the same as in Example 2 except no taxes were taken out of your son's pay. How do i amend my 2009 tax return He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. How do i amend my 2009 tax return Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to claim a refund of income tax withheld or estimated tax paid. How do i amend my 2009 tax return The exception to the joint return test does not apply, so your son is not your qualifying child. How do i amend my 2009 tax return Married child. How do i amend my 2009 tax return   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) described later. How do i amend my 2009 tax return    Social security number. How do i amend my 2009 tax return Your qualifying child must have a valid social security number (SSN), unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. How do i amend my 2009 tax return You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. How do i amend my 2009 tax return   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. How do i amend my 2009 tax return For more information about SSNs, see Rule 2. How do i amend my 2009 tax return Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. How do i amend my 2009 tax return However, only one of these persons can actually treat the child as a qualifying child. How do i amend my 2009 tax return Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). How do i amend my 2009 tax return The exemption for the child. How do i amend my 2009 tax return The child tax credit. How do i amend my 2009 tax return Head of household filing status. How do i amend my 2009 tax return The credit for child and dependent care expenses. How do i amend my 2009 tax return The exclusion for dependent care benefits. How do i amend my 2009 tax return The EIC. How do i amend my 2009 tax return The other person cannot take any of these benefits based on this qualifying child. How do i amend my 2009 tax return In other words, you and the other person cannot agree to divide these tax benefits between you. How do i amend my 2009 tax return The other person cannot take any of these tax benefits unless he or she has a different qualifying child. How do i amend my 2009 tax return The tiebreaker rules, which follow, explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. How do i amend my 2009 tax return However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. How do i amend my 2009 tax return Tiebreaker rules. How do i amend my 2009 tax return   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. How do i amend my 2009 tax return If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. How do i amend my 2009 tax return If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. How do i amend my 2009 tax return If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. How do i amend my 2009 tax return If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. How do i amend my 2009 tax return If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. How do i amend my 2009 tax return If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. How do i amend my 2009 tax return If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. How do i amend my 2009 tax return See Example 8. How do i amend my 2009 tax return   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. How do i amend my 2009 tax return See Examples 1 through 13. How do i amend my 2009 tax return   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in chapter 3 for people who do not have a qualifying child. How do i amend my 2009 tax return If the other person cannot claim the EIC. How do i amend my 2009 tax return   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. How do i amend my 2009 tax return See Examples 6 and 7. How do i amend my 2009 tax return But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier in this chapter. How do i amend my 2009 tax return Examples. How do i amend my 2009 tax return    The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. How do i amend my 2009 tax return Example 1—child lived with parent and grandparent. How do i amend my 2009 tax return You and your 2-year-old son Jimmy lived with your mother all year. How do i amend my 2009 tax return You are 25 years old, unmarried, and your AGI is $9,000. How do i amend my 2009 tax return Your only income was $9,000 from a part-time job. How do i amend my 2009 tax return Your mother's only income was $20,000 from her job, and her AGI is $20,000. How do i amend my 2009 tax return Jimmy's father did not live with you or Jimmy. How do i amend my 2009 tax return The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. How do i amend my 2009 tax return Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. How do i amend my 2009 tax return However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier in this chapter for which that person qualifies). How do i amend my 2009 tax return He is not a qualifying child of anyone else, including his father. How do i amend my 2009 tax return If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). How do i amend my 2009 tax return Example 2—parent has higher AGI than grandparent. How do i amend my 2009 tax return The facts are the same as in Example 1 except your AGI is $25,000. How do i amend my 2009 tax return Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. How do i amend my 2009 tax return Only you can claim him. How do i amend my 2009 tax return Example 3—two persons claim same child. How do i amend my 2009 tax return The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. How do i amend my 2009 tax return In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. How do i amend my 2009 tax return The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. How do i amend my 2009 tax return Example 4—qualifying children split between two persons. How do i amend my 2009 tax return The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. How do i amend my 2009 tax return Only one of you can claim each child. How do i amend my 2009 tax return However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. How do i amend my 2009 tax return For example, if you claim one child, your mother can claim the other two. How do i amend my 2009 tax return Example 5—taxpayer who is a qualifying child. How do i amend my 2009 tax return The facts are the same as in Example 1 except that you are only 18 years old. How do i amend my 2009 tax return This means you are a qualifying child of your mother. How do i amend my 2009 tax return Because of Rule 10, discussed next, you cannot claim the EIC and cannot claim your son as a qualifying child. How do i amend my 2009 tax return Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. How do i amend my 2009 tax return If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. How do i amend my 2009 tax return Example 6—grandparent with too much earned income to claim EIC. How do i amend my 2009 tax return The facts are the same as in Example 1 except that your mother earned $50,000 from her job. How do i amend my 2009 tax return Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. How do i amend my 2009 tax return Example 7—parent with too much earned income to claim EIC. How do i amend my 2009 tax return The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. How do i amend my 2009 tax return Your earned income is too high for you to claim the EIC. How do i amend my 2009 tax return But your mother cannot claim the EIC either, because her AGI is not higher than yours. How do i amend my 2009 tax return Example 8—child lived with both parents and grandparent. How do i amend my 2009 tax return The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have AGI of $30,000 on a joint return. How do i amend my 2009 tax return If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. How do i amend my 2009 tax return Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. How do i amend my 2009 tax return In other words, each parent's AGI can be treated as $15,000. How do i amend my 2009 tax return Example 9—separated parents. How do i amend my 2009 tax return You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. How do i amend my 2009 tax return In August and September, Joey lived with you. How do i amend my 2009 tax return For the rest of the year, Joey lived with your husband, who is Joey's father. How do i amend my 2009 tax return Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. How do i amend my 2009 tax return At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the Special rule for divorced or separated parents (or parents who live apart) does not apply. How do i amend my 2009 tax return You and your husband will file separate returns. How do i amend my 2009 tax return Your husband agrees to let you treat Joey as a qualifying child. How do i amend my 2009 tax return This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. How do i amend my 2009 tax return However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. How do i amend my 2009 tax return See Rule 3. How do i amend my 2009 tax return Example 10—separated parents claim same child. How do i amend my 2009 tax return The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. How do i amend my 2009 tax return In this case, only your husband will be allowed to treat Joey as a qualifying child. How do i amend my 2009 tax return This is because, during 2013, the boy lived with him longer than with you. How do i amend my 2009 tax return You cannot claim the EIC (either with or without a qualifying child). How do i amend my 2009 tax return However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. How do i amend my 2009 tax return See Rule 3. How do i amend my 2009 tax return Example 11—unmarried parents. How do i amend my 2009 tax return You, your 5-year-old son, and your son's father lived together all year. How do i amend my 2009 tax return You and your son's father are not married. How do i amend my 2009 tax return Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. How do i amend my 2009 tax return Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. How do i amend my 2009 tax return Neither of you had any other income. How do i amend my 2009 tax return Your son's father agrees to let you treat the child as a qualifying child. How do i amend my 2009 tax return This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. How do i amend my 2009 tax return Example 12—unmarried parents claim same child. How do i amend my 2009 tax return The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. How do i amend my 2009 tax return In this case, only your son's father will be allowed to treat your son as a qualifying child. How do i amend my 2009 tax return This is because his AGI, $14,000, is more than your AGI, $12,000. How do i amend my 2009 tax return You cannot claim the EIC (either with or without a qualifying child). How do i amend my 2009 tax return Example 13—child did not live with a parent. How do i amend my 2009 tax return You and your 7-year-old niece, your sister's child, lived with your mother all year. How do i amend my 2009 tax return You are 25 years old, and your AGI is $9,300. How do i amend my 2009 tax return Your only income was from a part-time job. How do i amend my 2009 tax return Your mother's AGI is $15,000. How do i amend my 2009 tax return Her only income was from her job. How do i amend my 2009 tax return Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. How do i amend my 2009 tax return Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. How do i amend my 2009 tax return However, only your mother can treat her as a qualifying child. How do i amend my 2009 tax return This is because your mother's AGI, $15,000, is more than your AGI, $9,300. How do i amend my 2009 tax return Special rule for divorced or separated parents (or parents who live apart). How do i amend my 2009 tax return   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. How do i amend my 2009 tax return The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all time during the last 6 months of 2013, whether or not they are or were married. How do i amend my 2009 tax return The child received over half of his or her support for the year from the parents. How do i amend my 2009 tax return The child is in the custody of one or both parents for more than half of 2013. How do i amend my 2009 tax return Either of the following statements is true. How do i amend my 2009 tax return The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. How do i amend my 2009 tax return If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. How do i amend my 2009 tax return A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. How do i amend my 2009 tax return For details, see Publication 501. How do i amend my 2009 tax return Also see Applying Rule 9 to divorced or separated parents (or parents who live apart), next. How do i amend my 2009 tax return Applying Rule 9 to divorced or separated parents (or parents who live apart). How do i amend my 2009 tax return   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. How do i amend my 2009 tax return However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. How do i amend my 2009 tax return If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. How do i amend my 2009 tax return Example 1. How do i amend my 2009 tax return You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. How do i amend my 2009 tax return Your AGI is $10,000. How do i amend my 2009 tax return Your mother’s AGI is $25,000. How do i amend my 2009 tax return Your son's father did not live with you or your son. How do i amend my 2009 tax return Under the Special rule for divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. How do i amend my 2009 tax return However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. How do i amend my 2009 tax return You and your mother did not have any child care expenses or dependent care benefits. How do i amend my 2009 tax return If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. How do i amend my 2009 tax return Example 2. How do i amend my 2009 tax return The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. How do i amend my 2009 tax return Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. How do i amend my 2009 tax return Example 3. How do i amend my 2009 tax return The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. How do i amend my 2009 tax return Your mother also claims him as a qualifying child for head of household filing status. How do i amend my 2009 tax return You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. How do i amend my 2009 tax return The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. How do i amend my 2009 tax return Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. How do i amend my 2009 tax return ) if all of the following statements are true. How do i amend my 2009 tax return You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. How do i amend my 2009 tax return Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. How do i amend my 2009 tax return You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. How do i amend my 2009 tax return You lived with that person in the United States for more than half of the year. How do i amend my 2009 tax return You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). How do i amend my 2009 tax return For more details about the tests to be a qualifying child, see Rule 8. How do i amend my 2009 tax return If you are a qualifying child of another taxpayer, you cannot claim the EIC. How do i amend my 2009 tax return This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. How do i amend my 2009 tax return Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). How do i amend my 2009 tax return Example. How do i amend my 2009 tax return You and your daughter lived with your mother all year. How do i amend my 2009 tax return You are 22 years old, unmarried, and attended a trade school full time. How do i amend my 2009 tax return You had a part-time job and earned $5,700. How do i amend my 2009 tax return You had no other income. How do i amend my 2009 tax return Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. How do i amend my 2009 tax return She can claim the EIC if she meets all the other requirements. How do i amend my 2009 tax return Because you are your mother's qualifying child, you cannot claim the EIC. How do i amend my 2009 tax return This is so even if your mother cannot or does not claim the EIC. How do i amend my 2009 tax return Child of person not required to file a return. How do i amend my 2009 tax return   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you met the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. How do i amend my 2009 tax return Example 1—return not required. How do i amend my 2009 tax return The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. How do i amend my 2009 tax return As a result, you are not your mother's qualifying child. How do i amend my 2009 tax return You can claim the EIC if you meet all the other requirements to do so. How do i amend my 2009 tax return Example 2—return filed to get refund of tax withheld. How do i amend my 2009 tax return The facts are the same as in Example 1 except your mother had wages of $1,500 and had income tax withheld from her wages. How do i amend my 2009 tax return She files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. How do i amend my 2009 tax return As a result, you are not your mother's qualifying child. How do i amend my 2009 tax return You can claim the EIC if you meet all the other requirements to do so. How do i amend my 2009 tax return Example 3—return filed to get EIC. How do i amend my 2009 tax return The facts are the same as in Example 2 except your mother claimed the EIC on her return. How do i amend my 2009 tax return Since she filed the return to get the EIC, she is not filing it only to get a refund of income tax withheld. How do i amend my 2009 tax return As a result, you are your mother's qualifying child. How do i amend my 2009 tax return You cannot claim the EIC. How do i amend my 2009 tax return Chapter 3—Rules If You Do Not Have a Qualifying Child Use this chapter if you do not have a qualifying child and have met all the rules in chapter 1. How do i amend my 2009 tax return This chapter discusses Rules 11 through 14. How do i amend my 2009 tax return You must meet all four of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit without a qualifying child. How do i amend my 2009 tax return You can file Form 1040, Form 1040A, or Form 1040EZ to claim the EIC without a qualifying child. How do i amend my 2009 tax return If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. How do i amend my 2009 tax return If you have a qualifying child. How do i amend my 2009 tax return   If you meet Rule 8, you have a qualifying child. How do i amend my 2009 tax return If you meet Rule 8 and do not claim the EIC with a qualifying child, you cannot claim the EIC without a qualifying child. How do i amend my 2009 tax return Rule 11—You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. How do i amend my 2009 tax return If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. How do i amend my 2009 tax return It does not matter which spouse meets the age test, as long as one of the spouses does. How do i amend my 2009 tax return You meet the age test if you were born after December 31, 1948, and before January 2, 1989. How do i amend my 2009 tax return If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. How do i amend my 2009 tax return If neither you nor your spouse meets the age test, you cannot claim the EIC. How do i amend my 2009 tax return Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). How do i amend my 2009 tax return Death of spouse. How do i amend my 2009 tax return   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. How do i amend my 2009 tax return Example 1. How do i amend my 2009 tax return You are age 28 and unmarried. How do i amend my 2009 tax return You meet the age test. How do i amend my 2009 tax return Example 2—spouse meets age test. How do i amend my 2009 tax return You are married and filing a joint return. How do i amend my 2009 tax return You are age 23 and your spouse is age 27. How do i amend my 2009 tax return You meet the age test because your spouse is at least age 25 but under age 65. How do i amend my 2009 tax return Example 3—spouse dies in 2013. How do i amend my 2009 tax return You are married and filing a joint return with your spouse who died in August 2013. How do i amend my 2009 tax return You are age 67. How do i amend my 2009 tax return Your spouse would have become age 65 in November 2013. How do i amend my 2009 tax return Because your spouse was under age 65 when she died, you meet the age test. How do i amend my 2009 tax return Rule 12—You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. How do i amend my 2009 tax return If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. How do i amend my 2009 tax return If you are not sure whether someone else can claim you as a dependent, get Publication 501 and read the rules for claiming a dependent. How do i amend my 2009 tax return If someone else can claim you as a dependent on his or her return, but does not, you still cannot claim the credit. How do i amend my 2009 tax return Example 1. How do i amend my 2009 tax return In 2013, you were age 25, single, and living at home with your parents. How do i amend my 2009 tax return You worked and were not a student. How do i amend my 2009 tax return You earned $7,500. How do i amend my 2009 tax return Your parents cannot claim you as a dependent. How do i amend my 2009 tax return When you file your return, you claim an exemption for yourself by not checking the You box on line 5 of your Form 1040EZ and by entering $10,000 on that line. How do i amend my 2009 tax return You meet this rule. How do i amend my 2009 tax return You can claim the EIC if you meet all the other requirements. How do i amend my 2009 tax return Example 2. How do i amend my 2009 tax return The facts are the same as in Example 1, except that you earned $2,000. How do i amend my 2009 tax return Your parents can claim you as a dependent but decide not to. How do i amend my 2009 tax return You do not meet this rule. How do i amend my 2009 tax return You cannot claim the credit because your parents could have claimed you as a dependent. How do i amend my 2009 tax return Joint returns. How do i amend my 2009 tax return   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. How do i amend my 2009 tax return   However, another person may be able to claim you as a dependent if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. How do i amend my 2009 tax return But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. How do i amend my 2009 tax return Example 1—return filed to get refund of tax withheld. How do i amend my 2009 tax return You are 26 years old. How do i amend my 2009 tax return You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. How do i amend my 2009 tax return Neither you nor your wife is required to file a tax return. How do i amend my 2009 tax return You do not have a child. How do i amend my 2009 tax return Taxes were taken out of your pay so you file a joint return only to get a refund of the withheld taxes. How do i amend my 2009 tax return Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. How do i amend my 2009 tax return They can claim exemptions for you and your wife if all the other tests to do so are met. How do i amend my 2009 tax return Example 2—return filed to get EIC. How do i amend my 2009 tax return The facts are the same as in Example 1except no taxes were taken out of your pay. How do i amend my 2009 tax return Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. How do i amend my 2009 tax return Because claiming the EIC is your reason for filing the return, you are not filing it only to claim a refund of income tax withheld or estimated tax paid. How do i amend my 2009 tax return Your parents cannot claim an exemption for either you or your wife. How do i amend my 2009 tax return Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. How do i amend my 2009 tax return ) if all of the following statements are true. How do i amend my 2009 tax return You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. How do i amend my 2009 tax return Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. How do i amend my 2009 tax return You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. How do i amend my 2009 tax return You lived with that person in the United States for more than half of the year. How do i amend my 2009 tax return You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). How do i amend my 2009 tax return For more details about the tests to be a qualifying child, see Rule 8. How do i amend my 2009 tax return If you are a qualifying child of another taxpayer, you cannot claim the EIC. How do i amend my 2009 tax return This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. How do i amend my 2009 tax return Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). How do i amend my 2009 tax return Example. How do i amend my 2009 tax return You lived with your mother all year. How do i amend my 2009 tax return You are age 26, unmarried, and permanently and totally disabled. How do i amend my 2009 tax return Your only income was from a community center where you went three days a week to answer telephones. How do i amend my 2009 tax return You earned $5,000 for the year and provided more than half of your own support. How do i amend my 2009 tax return Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. How do i amend my 2009 tax return She can claim the EIC if she meets all the other requirements. How do i amend my 2009 tax return Because you are a qualifying child of your mother, you cannot claim the EIC. How do i amend my 2009 tax return This is so even if your mother cannot or does not claim the EIC. How do i amend my 2009 tax return Joint returns. How do i amend my 2009 tax return   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. How do i amend my 2009 tax return   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. How do i amend my 2009 tax return But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. How do i amend my 2009 tax return Child of person not required to file a return. How do i amend my 2009 tax return   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. How do i amend my 2009 tax return Example 1—return not required. How do i amend my 2009 tax return You lived all year with your father. How do i amend my 2009 tax return You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. How do i amend my 2009 tax return You have no other income, no children, and provided more than half of your own support. How do i amend my 2009 tax return Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. How do i amend my 2009 tax return As a result, you are not your father's qualifying child. How do i amend my 2009 tax return You can claim the EIC if you meet all the other requirements to do so. How do i amend my 2009 tax return Example 2—return filed to get refund of tax withheld. How do i amend my 2009 tax return The facts are the same as in Example 1 except your father had wages of $1,500 and had income tax withheld from his wages. How do i amend my 2009 tax return He files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. How do i amend my 2009 tax return As a result, you are not your father's qualifying child. How do i amend my 2009 tax return You can claim the EIC if you meet all the other requirements to do so. How do i amend my 2009 tax return Example 3—return filed to get EIC. How do i amend my 2009 tax return The facts are the same as in Example 2 except your father claimed the EIC on his return. How do i amend my 2009 tax return Since he filed the return to get the EIC, he is not filing it only to get a refund of income tax withheld. How do i amend my 2009 tax return As a result, you are your father's qualifying child. How do i amend my 2009 tax return You cannot claim the EIC. How do i amend my 2009 tax return Rule 14—You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. How do i amend my 2009 tax return If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). How do i amend my 2009 tax return United States. How do i amend my 2009 tax return   This means the 50 states and the District of Columbia. How do i amend my 2009 tax return It does not include Puerto Rico or U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return possessions such as Guam. How do i amend my 2009 tax return Homeless shelter. How do i amend my 2009 tax return   Your home can be any location where you regularly live. How do i amend my 2009 tax return You do not need a traditional home. How do i amend my 2009 tax return If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. How do i amend my 2009 tax return Military personnel stationed outside the United States. How do i amend my 2009 tax return   U. How do i amend my 2009 tax return S. How do i amend my 2009 tax return military personnel stationed outside the United States on extended active duty (defined in chapter 2) are considered to live in the United States during that duty period for purposes of the EIC. How do i amend my 2009 tax return Chapter 4—Figuring and Claiming the EIC You must meet one more rule to claim the EIC. How do i amend my 2009 tax return You need to know the amount of your earned income to see if you meet the rule in this chapter. How do i amend my 2009 tax return You also need to know that amount to figure your EIC. How do i amend my 2009 tax return Rule 15—Earned Income Limits Your earned income must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. How do i amend my 2009 tax return Earned Income Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. How do i amend my 2009 tax return Employee pay is earned income only if it is taxable. How do i amend my 2009 tax return Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. How do i amend my 2009 tax return But there is an exception for nontaxable combat pay, which you can choose to include in earned income. How do i amend my 2009 tax return Earned income is explained in detail in Rule 7 in chapter 1. How do i amend my 2009 tax return Figuring earned income. How do i amend my 2009 tax return   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. How do i amend my 2009 tax return   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. How do i amend my 2009 tax return   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). How do i amend my 2009 tax return You will then reduce that amount by any amount included on that line and described in the following list. How do i amend my 2009 tax return Scholarship or fellowship grants not reported on a Form W-2. How do i amend my 2009 tax return A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. How do i amend my 2009 tax return Inmate's income. How do i amend my 2009 tax return Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. How do i amend my 2009 tax return This includes amounts received for work performed while in a work release program or while in a halfway house. How do i amend my 2009 tax return If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). How do i amend my 2009 tax return Pension or annuity from deferred compensation plans. How do i amend my 2009 tax return A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. How do i amend my 2009 tax return If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). How do i amend my 2009 tax return This amount may be reported in box 11 of your Form W-2. How do i amend my 2009 tax return If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or an annuity. How do i amend my 2009 tax return Clergy. How do i amend my 2009 tax return   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also re