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How Do You File An Amended Federal Tax Return

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How Do You File An Amended Federal Tax Return

How do you file an amended federal tax return Publication 524 - Main Content Table of Contents Are You Eligible for the Credit?Qualified Individual Income Limits Credit Figured for You Figuring the Credit YourselfStep 1. How do you file an amended federal tax return Determine Initial Amount Step 2. How do you file an amended federal tax return Total Certain Nontaxable Pensions and Benefits Step 3. How do you file an amended federal tax return Determine Excess Adjusted Gross Income Step 4. How do you file an amended federal tax return Determine the Total of Steps 2 and 3 Step 5. How do you file an amended federal tax return Determine Your Credit Examples How To Get Tax Help Are You Eligible for the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. How do you file an amended federal tax return You are a qualified individual. How do you file an amended federal tax return Your income is not more than certain limits. How do you file an amended federal tax return You can use Figure A and Table 1 as guides to see if you are eligible for the credit. How do you file an amended federal tax return Use Figure A first to see if you are a qualified individual. How do you file an amended federal tax return If you are, go to Table 1 to make sure your income is not too high to take the credit. How do you file an amended federal tax return You can take the credit only if you file Form 1040 or Form 1040A. How do you file an amended federal tax return You cannot take the credit if you file Form 1040EZ or Form 1040NR. How do you file an amended federal tax return Qualified Individual You are a qualified individual for this credit if you are a U. How do you file an amended federal tax return S. How do you file an amended federal tax return citizen or resident alien, and either of the following applies. How do you file an amended federal tax return You were age 65 or older at the end of 2013. How do you file an amended federal tax return You were under age 65 at the end of 2013 and all three of the following statements are true. How do you file an amended federal tax return You retired on permanent and total disability (explained later). How do you file an amended federal tax return You received taxable disability income for 2013. How do you file an amended federal tax return On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). How do you file an amended federal tax return Age 65. How do you file an amended federal tax return   You are considered to be age 65 on the day before your 65th birthday. How do you file an amended federal tax return As a result, if you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. How do you file an amended federal tax return U. How do you file an amended federal tax return S. How do you file an amended federal tax return Citizen or Resident Alien You must be a U. How do you file an amended federal tax return S. How do you file an amended federal tax return citizen or resident alien (or be treated as a resident alien) to take the credit. How do you file an amended federal tax return Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. How do you file an amended federal tax return Exceptions. How do you file an amended federal tax return   You may be able to take the credit if you are a nonresident alien who is married to a U. How do you file an amended federal tax return S. How do you file an amended federal tax return citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. How do you file an amended federal tax return S. How do you file an amended federal tax return resident alien. How do you file an amended federal tax return If you make that choice, both you and your spouse are taxed on your worldwide incomes. How do you file an amended federal tax return   If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. How do you file an amended federal tax return S. How do you file an amended federal tax return citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. How do you file an amended federal tax return S. How do you file an amended federal tax return resident alien for the entire year. How do you file an amended federal tax return In that case, you may be allowed to take the credit. How do you file an amended federal tax return   For information on these choices, see chapter 1 of Publication 519, U. How do you file an amended federal tax return S. How do you file an amended federal tax return Tax Guide for Aliens. How do you file an amended federal tax return Married Persons Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. How do you file an amended federal tax return However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. How do you file an amended federal tax return Head of household. How do you file an amended federal tax return   You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet all the following tests. How do you file an amended federal tax return You file a separate return. How do you file an amended federal tax return You paid more than half the cost of keeping up your home during the tax year. How do you file an amended federal tax return Your spouse did not live in your home at any time during the last 6 months of the tax year and the absence was not temporary. How do you file an amended federal tax return (See Temporary absences under Head of Household in Publication 501. How do you file an amended federal tax return ) Your home was the main home of your child, stepchild, or an eligible foster child for more than half the year. How do you file an amended federal tax return An eligible foster child is a child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. How do you file an amended federal tax return You can claim an exemption for that child, or you cannot claim the exemption only because the noncustodial parent can claim the child using the rules for children of divorced or separated parents. How do you file an amended federal tax return For more information, see Publication 501, Exemptions, Standard Deduction, and Filing Information. How do you file an amended federal tax return Figure A. How do you file an amended federal tax return Are You a Qualified Individual? Please click here for the text description of the image. How do you file an amended federal tax return figure a Under Age 65 If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). How do you file an amended federal tax return You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the close of the tax year. How do you file an amended federal tax return Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. How do you file an amended federal tax return If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. How do you file an amended federal tax return You are considered to be under age 65 at the end of 2013 if you were born after January 1, 1949. How do you file an amended federal tax return Permanent and total disability. How do you file an amended federal tax return    You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. How do you file an amended federal tax return A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. How do you file an amended federal tax return See Physician's statement , later. How do you file an amended federal tax return Substantial gainful activity. How do you file an amended federal tax return   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. How do you file an amended federal tax return Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. How do you file an amended federal tax return   Substantial gainful activity is not work you do to take care of yourself or your home. How do you file an amended federal tax return It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. How do you file an amended federal tax return However, doing this kind of work may show that you are able to engage in substantial gainful activity. How do you file an amended federal tax return    The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. How do you file an amended federal tax return   The following examples illustrate the tests of substantial gainful activity. How do you file an amended federal tax return Example 1. How do you file an amended federal tax return Trisha, a sales clerk, retired on disability. How do you file an amended federal tax return She is 53 years old and now works as a full-time babysitter for the minimum wage. How do you file an amended federal tax return Even though Trisha is doing different work, she is able to do the duties of her new job in a full-time competitive work situation for the minimum wage. How do you file an amended federal tax return She cannot take the credit because she is able to engage in substantial gainful activity. How do you file an amended federal tax return Example 2. How do you file an amended federal tax return Tom, a bookkeeper, retired on disability. How do you file an amended federal tax return He is 59 years old and now drives a truck for a charitable organization. How do you file an amended federal tax return He sets his own hours and is not paid. How do you file an amended federal tax return Duties of this nature generally are performed for pay or profit. How do you file an amended federal tax return Some weeks he works 10 hours, and some weeks he works 40 hours. How do you file an amended federal tax return Over the year he averages 20 hours a week. How do you file an amended federal tax return The kind of work and his average hours a week conclusively show that Tom is able to engage in substantial gainful activity. How do you file an amended federal tax return This is true even though Tom is not paid and he sets his own hours. How do you file an amended federal tax return He cannot take the credit. How do you file an amended federal tax return Example 3. How do you file an amended federal tax return John, who retired on disability, took a job with a former employer on a trial basis. How do you file an amended federal tax return The purpose of the job was to see if John could do the work. How do you file an amended federal tax return The trial period lasted for 6 months during which John was paid the minimum wage. How do you file an amended federal tax return Because of John's disability, he was assigned only light duties of a nonproductive “make-work” nature. How do you file an amended federal tax return The activity was gainful because John was paid at least the minimum wage. How do you file an amended federal tax return But the activity was not substantial because his duties were nonproductive. How do you file an amended federal tax return These facts do not, by themselves, show that John is able to engage in substantial gainful activity. How do you file an amended federal tax return Example 4. How do you file an amended federal tax return Joan, who retired on disability from a job as a bookkeeper, lives with her sister who manages several motel units. How do you file an amended federal tax return Joan helps her sister for 1 or 2 hours a day by performing duties such as washing dishes, answering phones, registering guests, and bookkeeping. How do you file an amended federal tax return Joan can select the time of day when she feels most fit to work. How do you file an amended federal tax return Work of this nature, performed off and on during the day at Joan's convenience, is not activity of a “substantial and gainful” nature even if she is paid for the work. How do you file an amended federal tax return The performance of these duties does not, of itself, show that Joan is able to engage in substantial gainful activity. How do you file an amended federal tax return Sheltered employment. How do you file an amended federal tax return   Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. How do you file an amended federal tax return These qualified locations are in sheltered workshops, hospitals and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes. How do you file an amended federal tax return   Compared to commercial employment, pay is lower for sheltered employment. How do you file an amended federal tax return Therefore, one usually does not look for sheltered employment if he or she can get other employment. How do you file an amended federal tax return The fact that one has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity. How do you file an amended federal tax return Physician's statement. How do you file an amended federal tax return   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. How do you file an amended federal tax return You can use the statement in the Instructions for Schedule R. How do you file an amended federal tax return   You do not have to file this statement with your Form 1040 or Form 1040A, but you must keep it for your records. How do you file an amended federal tax return Veterans. How do you file an amended federal tax return    If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. How do you file an amended federal tax return VA Form 21-0172 must be signed by a person authorized by the VA to do so. How do you file an amended federal tax return You can get this form from your local VA regional office. How do you file an amended federal tax return Physician's statement obtained in earlier year. How do you file an amended federal tax return   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. How do you file an amended federal tax return For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. How do you file an amended federal tax return If you meet the required conditions, check the box on your Schedule R, Part II, line 2. How do you file an amended federal tax return   If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked. How do you file an amended federal tax return Disability income. How do you file an amended federal tax return   If you are under age 65, you must also have taxable disability income to qualify for the credit. How do you file an amended federal tax return Disability income must meet both of the following requirements. How do you file an amended federal tax return It must be paid under your employer's accident or health plan or pension plan. How do you file an amended federal tax return It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability. How do you file an amended federal tax return Payments that are not disability income. How do you file an amended federal tax return    Any payment you receive from a plan that does not provide for disability retirement is not disability income. How do you file an amended federal tax return Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. How do you file an amended federal tax return    For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. How do you file an amended federal tax return Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled. How do you file an amended federal tax return Income Limits To determine if you can claim the credit, you must consider two income limits. How do you file an amended federal tax return The first limit is the amount of your adjusted gross income (AGI). How do you file an amended federal tax return The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. How do you file an amended federal tax return The limits are shown in Table 1. How do you file an amended federal tax return If your AGI and your nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. How do you file an amended federal tax return See Figuring the Credit Yourself , later. How do you file an amended federal tax return Table 1. How do you file an amended federal tax return Income Limits IF your filing status is THEN, even if you qualify (see Figure A), you CANNOT take the credit if   Your adjusted gross income (AGI)* is equal to or more than. How do you file an amended federal tax return . How do you file an amended federal tax return . How do you file an amended federal tax return     OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. How do you file an amended federal tax return . How do you file an amended federal tax return . How do you file an amended federal tax return   single, head of household, or qualifying widow(er) with dependent child   $17,500     $5,000   married filing jointly and only one spouse qualifies in Figure A   $20,000     $5,000   married filing jointly and both spouses qualify in Figure A   $25,000     $7,500   married filing separately and you lived apart from your spouse for all of 2013   $12,500     $3,750   * AGI is the amount on Form 1040A, line 22, or Form 1040, line 38. How do you file an amended federal tax return If your AGI or your nontaxable pensions, annuities, or disability income are equal to or more than the income limits, you cannot take the credit. How do you file an amended federal tax return Credit Figured for You You can figure the credit yourself, or the Internal Revenue Service (IRS) will figure it for you. How do you file an amended federal tax return See Figuring the Credit Yourself , next. How do you file an amended federal tax return If you can take the credit and you want the IRS to figure the credit for you, attach Schedule R to your return. How do you file an amended federal tax return Check the appropriate box in Part I of Schedule R and fill in Part II and lines 11, 13a, and 13b of Part III, if they apply to you. How do you file an amended federal tax return If you file Form 1040A, enter “CFE” in the space to the left of Form 1040A, line 30. How do you file an amended federal tax return If you file Form 1040, check box c on Form 1040, line 53, and enter “CFE” on the line next to that box. How do you file an amended federal tax return Attach Schedule R to your return. How do you file an amended federal tax return Table 2. How do you file an amended federal tax return Initial Amounts IF your filing status is. How do you file an amended federal tax return . How do you file an amended federal tax return . How do you file an amended federal tax return   THEN enter on line 10 of Schedule R. How do you file an amended federal tax return . How do you file an amended federal tax return . How do you file an amended federal tax return single,head of household, or qualifying widow(er) with dependent child and, by the end of 2013, you were       • 65 or older $5,000   • under 65 and retired on permanent and total disability1 $5,000 married filing a joint return and by the end of 2013       • both of you were 65 or older $7,500   • both of you were under 65 and one of you retired on permanent and total disability1 $5,000   • both of you were under 65 and both of you retired on permanent and total disability2 $7,500   • one of you was 65 or older, and the other was under 65 and retired on permanent  and total disability3 $7,500   • one of you was 65 or older, and the other was under 65 and not retired on permanent  and total disability $5,000 married filing a separate return and you did not live with your spouse at any time during the year and, by the end of 2013, you were       • 65 or older $3,750   • under 65 and retired on permanent and total disability1 $3,750   1 Amount cannot be more than the taxable disability income. How do you file an amended federal tax return     2 Amount cannot be more than your combined taxable disability income. How do you file an amended federal tax return     3 Amount is $5,000 plus the taxable disability income of the spouse under age 65, but not more than $7,500. How do you file an amended federal tax return   Figuring the Credit Yourself If you figure the credit yourself, fill out the front of Schedule R. How do you file an amended federal tax return Next, fill out Schedule R, Part III. How do you file an amended federal tax return If you file Form 1040A, enter the amount from Schedule R, line 22 on line 30. How do you file an amended federal tax return If you file Form 1040, include the amount from Schedule R, line 22 on line 53, check box c, and enter “Sch R” on the line next to that box. How do you file an amended federal tax return There are five steps in Part III to determine the amount of your credit. How do you file an amended federal tax return Determine your initial amount (lines 10–12). How do you file an amended federal tax return Determine the total of any nontaxable social security and certain other nontaxable pensions, annuities, and disability benefits you received (lines 13a, 13b, and 13c). How do you file an amended federal tax return Determine your excess adjusted gross income (lines 14–17). How do you file an amended federal tax return Determine the total of steps 2 and 3 (line 18). How do you file an amended federal tax return Determine your credit (lines 19–22). How do you file an amended federal tax return These steps are discussed in more detail next. How do you file an amended federal tax return Step 1. How do you file an amended federal tax return Determine Initial Amount To figure the credit, you must first determine your initial amount using lines 10 through 12. How do you file an amended federal tax return See Table 2. How do you file an amended federal tax return Your initial amount is on line 12. How do you file an amended federal tax return Initial amounts for persons under age 65. How do you file an amended federal tax return   If you are a qualified individual under age 65, your initial amount cannot be more than your taxable disability income. How do you file an amended federal tax return Special rules for joint returns. How do you file an amended federal tax return   If you are a qualified individual under age 65, and your spouse is also a qualified individual, your initial amount is your taxable disability income plus $5,000. How do you file an amended federal tax return   If you are a qualified individual, and both you and your spouse are under age 65, your initial amount cannot be more than your combined taxable disability income. How do you file an amended federal tax return Step 2. How do you file an amended federal tax return Total Certain Nontaxable Pensions and Benefits Step 2 is to figure the total amount of nontaxable social security and certain other nontaxable payments you received during the year. How do you file an amended federal tax return You must reduce your initial amount by these payments. How do you file an amended federal tax return Enter these nontaxable payments on lines 13a or 13b and total them on line 13c. How do you file an amended federal tax return If you are married filing jointly, you must enter the combined amount of nontaxable payments both you and your spouse received. How do you file an amended federal tax return Worksheets are provided in the instructions for Forms 1040 and 1040A to help you determine if any of your social security benefits (or equivalent railroad retirement benefits) are taxable. How do you file an amended federal tax return Include the following nontaxable payments in the amounts you enter on lines 13a and 13b. How do you file an amended federal tax return Nontaxable social security payments. How do you file an amended federal tax return This is the nontaxable part of the benefits shown in box 5 of Form SSA-1099, Social Security Benefit Statement, before deducting any amounts withheld to pay premiums on supplementary Medicare insurance, and before any reduction because of benefits received under workers' compensation. How do you file an amended federal tax return (Do not include a lump-sum death benefit payment you may receive as a surviving spouse, or a surviving child's insurance benefit payments you may receive as a guardian. How do you file an amended federal tax return ) Nontaxable railroad retirement pension payments treated as social security. How do you file an amended federal tax return This is the nontaxable part of the benefits shown in box 5 of Form RRB-1099, Payments by the Railroad Retirement Board. How do you file an amended federal tax return Nontaxable pension or annuity payments or disability benefits that are paid under a law administered by the Department of Veterans Affairs (VA). How do you file an amended federal tax return (Do not include amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the armed forces of any country or in the National Oceanic and Atmospheric Administration or the Public Health Service, or as a disability annuity under section 808 of the Foreign Service Act of 1980. How do you file an amended federal tax return ) Pension or annuity payments or disability benefits that are excluded from income under any provision of federal law other than the Internal Revenue Code. How do you file an amended federal tax return (Do not include amounts that are a return of your cost of a pension or annuity. How do you file an amended federal tax return These amounts do not reduce your initial amount. How do you file an amended federal tax return ) You should be sure to take into account all of the nontaxable amounts you receive. How do you file an amended federal tax return These amounts are verified by the IRS through information supplied by other government agencies. How do you file an amended federal tax return Step 3. How do you file an amended federal tax return Determine Excess Adjusted Gross Income You also must reduce your initial amount by your excess adjusted gross income. How do you file an amended federal tax return Figure your excess adjusted gross income on lines 14–17. How do you file an amended federal tax return You figure your excess adjusted gross income as follows. How do you file an amended federal tax return Subtract from your adjusted gross income (Form 1040A, line 22 or Form 1040, line 38) the amount shown for your filing status. How do you file an amended federal tax return $7,500 if you are single, a head of household, or a qualifying widow(er) with dependent child, $10,000 if you are married filing jointly, or $5,000 if you are married filing separately and you and your spouse did not live in the same household at any time during the tax year. How do you file an amended federal tax return Divide the result of (1) by 2. How do you file an amended federal tax return Step 4. How do you file an amended federal tax return Determine the Total of Steps 2 and 3 To determine if you can take the credit, you must add (on line 18) the amounts you figured in Step 2 (line 13c) and Step 3 (line 17). How do you file an amended federal tax return Step 5. How do you file an amended federal tax return Determine Your Credit Subtract the amount determined in Step 4 (line 18) from the amount determined in Step 1 (line 12), and multiply the result by 15% (. How do you file an amended federal tax return 15). How do you file an amended federal tax return In certain cases, the amount of your credit may be limited. How do you file an amended federal tax return See Limit on credit , later. How do you file an amended federal tax return Example. How do you file an amended federal tax return You are 66 years old and your spouse is 64. How do you file an amended federal tax return Your spouse is not disabled. How do you file an amended federal tax return You file a joint return on Form 1040. How do you file an amended federal tax return Your adjusted gross income is $14,630. How do you file an amended federal tax return Together you received $3,200 from social security, which was nontaxable. How do you file an amended federal tax return You figure the credit as follows: Example applying the 5 step process Amount (Line references (shown in parentheses) are to the Schedule R)      1. How do you file an amended federal tax return Initial amount (line 12) $5,000 2. How do you file an amended federal tax return Total nontaxable social security  and other nontaxable  pensions (line 13c) $3,200   3. How do you file an amended federal tax return Excess adjusted gross income  ($14,630–$10,000) ÷ 2 (line 17) 2,315   4. How do you file an amended federal tax return Add (2) and (3) (line 18) 5,515 5. How do you file an amended federal tax return Subtract (4) from (1) (line 12 – line 18 = line 19) (Do not enter less than -0-) $ -0- You cannot take the credit because your nontaxable social security plus your excess adjusted gross income is more than your initial amount. How do you file an amended federal tax return Limit on credit. How do you file an amended federal tax return   The amount of credit you can claim is generally limited to the amount of your tax. How do you file an amended federal tax return Use the Credit Limit Worksheet in the Instructions for Schedule R to determine if your credit is limited. How do you file an amended federal tax return Examples The following examples illustrate the credit for the elderly or the disabled. How do you file an amended federal tax return The initial amounts are taken from Table 2, earlier. How do you file an amended federal tax return Example 1. How do you file an amended federal tax return James Davis is 58 years old, single, and files Form 1040A. How do you file an amended federal tax return In 2011 he retired on permanent and total disability, and he is still permanently and totally disabled. How do you file an amended federal tax return He got the required physician's statement in 2011 and kept it with his tax records. How do you file an amended federal tax return His physician signed on line B of the statement. How do you file an amended federal tax return This year James checks the box in Schedule R, Part II. How do you file an amended federal tax return He does not need to get another statement for 2013. How do you file an amended federal tax return He received the following income for the year: Nontaxable social security $1,500 Interest (taxable) 100 Taxable disability pension 11,400       James' adjusted gross income is $11,500 ($11,400 + $100). How do you file an amended federal tax return He figures the credit on Schedule R as follows: 1. How do you file an amended federal tax return Initial amount   $5,000 2. How do you file an amended federal tax return Taxable disability pension   11,400 3. How do you file an amended federal tax return Smaller of line 1 or line 2   5,000 4. How do you file an amended federal tax return Nontaxable social security  benefits $1,500     5. How do you file an amended federal tax return Excess adjusted gross income  ($11,500 − $7,500) ÷ 2 2,000     6. How do you file an amended federal tax return Add lines 4 and 5   3,500 7. How do you file an amended federal tax return Subtract line 6 from line 3  (Do not enter less than (-0-))   1,500 8. How do you file an amended federal tax return Multiply line 7 by 15% (. How do you file an amended federal tax return 15)   225 9. How do you file an amended federal tax return Enter the amount from the  Credit Limit Worksheet in the  Instructions for Schedule R, line 21   151 10. How do you file an amended federal tax return Credit (Enter the smaller of  line 8 or line 9)   $ 151 He enters $151 on line 30 of Form 1040A. How do you file an amended federal tax return The Schedule R for James Davis is not shown. How do you file an amended federal tax return Example 2. How do you file an amended federal tax return William White is 53. How do you file an amended federal tax return His wife Helen is 49. How do you file an amended federal tax return William had a stroke 3 years ago and retired on permanent and total disability. How do you file an amended federal tax return He is still permanently and totally disabled because of the stroke. How do you file an amended federal tax return In November, Helen was injured in an accident at work and retired on permanent and total disability. How do you file an amended federal tax return William received nontaxable social security disability benefits of $2,000 during the year and a taxable disability pension of $6,200. How do you file an amended federal tax return Helen earned $12,500 from her job and received a taxable disability pension of $1,700. How do you file an amended federal tax return Their joint return on Form 1040 shows adjusted gross income of $20,400 ($6,200 + $12,500 + $1,700). How do you file an amended federal tax return They do not itemize deductions. How do you file an amended federal tax return They do not have any amounts that would increase their standard deduction. How do you file an amended federal tax return Helen's doctor completed the physician's statement in the Instructions for Schedule R. How do you file an amended federal tax return Helen is not required to include the statement with their return, but she must keep it for her records. How do you file an amended federal tax return William got a physician's statement for the year he had the stroke. How do you file an amended federal tax return His doctor had signed on line B of that physician's statement to certify that William was permanently and totally disabled. How do you file an amended federal tax return William has kept the physician's statement with his records. How do you file an amended federal tax return He checks the box on Schedule R, Part II and writes his first name in the space above the box on line 2. How do you file an amended federal tax return William and Helen use Schedule R to figure their $41 credit for the elderly or the disabled. How do you file an amended federal tax return They attach Schedule R to their Form 1040 and enter $41 on line 53. How do you file an amended federal tax return They check box c on line 53 and enter “Sch R” on the line next to that box. How do you file an amended federal tax return See their filled-in Schedule R and Helen's filled-in physician's statement, later. How do you file an amended federal tax return Instructions for Physician's Statement     Taxpayer Physician If you retired after 1976, enter the date you retired in the space provided on the statement below. How do you file an amended federal tax return A person is permanently and totally disabled if both of the following apply:   1. How do you file an amended federal tax return He or she cannot engage in any substantial gainful activity because of a physical or mental condition. How do you file an amended federal tax return   2. How do you file an amended federal tax return A physician determines that the disability has lasted or can be expected to last continuously for at least a year or can lead to death. How do you file an amended federal tax return Physician's Statement     I certify that Helen A. How do you file an amended federal tax return White Name of disabled person was permanently and totally disabled on January 1, 1976, or January 1, 1977, or was permanently and totally disabled on the date he or she retired. How do you file an amended federal tax return If retired after 1976, enter the date retired ▶ November 1, 2013   Physician: Sign your name on either A or B below. How do you file an amended federal tax return AThe disability has lasted or can be expected to last continuously for at least a year     Physician's signatureDate BThere is no reasonable probability that the disabled condition will ever improve Ayden D. How do you file an amended federal tax return Doctor 2/8/14   Physician's signatureDate Physician's name Physician's address Ayden D. How do you file an amended federal tax return Doctor 1900 Green St. How do you file an amended federal tax return , Hometown, MD 20000         This image is too large to be displayed in the current screen. How do you file an amended federal tax return Please click the link to view the image. How do you file an amended federal tax return Page 1 of Schedule R for the Whites This image is too large to be displayed in the current screen. How do you file an amended federal tax return Please click the link to view the image. How do you file an amended federal tax return Page 2 of Schedule R for the Whites How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. How do you file an amended federal tax return Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. How do you file an amended federal tax return Free help with your tax return. How do you file an amended federal tax return   Free help in preparing your return is available nationwide from IRS-certified volunteers. How do you file an amended federal tax return The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. How do you file an amended federal tax return The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. How do you file an amended federal tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. How do you file an amended federal tax return Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. How do you file an amended federal tax return To find the nearest VITA or TCE site, visit IRS. How do you file an amended federal tax return gov or call 1-800-906-9887. How do you file an amended federal tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. How do you file an amended federal tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. How do you file an amended federal tax return aarp. How do you file an amended federal tax return org/money/taxaide or call 1-888-227-7669. How do you file an amended federal tax return   For more information on these programs, go to IRS. How do you file an amended federal tax return gov and enter “VITA” in the search box. How do you file an amended federal tax return Internet. How do you file an amended federal tax return IRS. How do you file an amended federal tax return gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. How do you file an amended federal tax return Apply for an Employer Identification Number (EIN). How do you file an amended federal tax return Go to IRS. How do you file an amended federal tax return gov and enter Apply for an EIN in the search box. How do you file an amended federal tax return Request an Electronic Filing PIN by going to IRS. How do you file an amended federal tax return gov and entering Electronic Filing PIN in the search box. How do you file an amended federal tax return Check the status of your 2013 refund with Where's My Refund? Go to IRS. How do you file an amended federal tax return gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. How do you file an amended federal tax return If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. How do you file an amended federal tax return Check the status of your amended return. How do you file an amended federal tax return Go to IRS. How do you file an amended federal tax return gov and enter Where's My Amended Return in the search box. How do you file an amended federal tax return Download forms, instructions, and publications, including some accessible versions. How do you file an amended federal tax return Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. How do you file an amended federal tax return gov or IRS2Go. How do you file an amended federal tax return Tax return and tax account transcripts are generally available for the current year and past three years. How do you file an amended federal tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. How do you file an amended federal tax return gov. How do you file an amended federal tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. How do you file an amended federal tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. How do you file an amended federal tax return gov. How do you file an amended federal tax return Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. How do you file an amended federal tax return gov or IRS2Go. How do you file an amended federal tax return Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. How do you file an amended federal tax return An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. How do you file an amended federal tax return Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. How do you file an amended federal tax return If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. How do you file an amended federal tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. How do you file an amended federal tax return Locate the nearest volunteer help site with the VITA Locator Tool on IRS. How do you file an amended federal tax return gov. How do you file an amended federal tax return Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. How do you file an amended federal tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. How do you file an amended federal tax return Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. How do you file an amended federal tax return AARP offers the Tax-Aide counseling program as part of the TCE program. How do you file an amended federal tax return Visit AARP's website to find the nearest Tax-Aide location. How do you file an amended federal tax return Research your tax questions. How do you file an amended federal tax return Search publications and instructions by topic or keyword. How do you file an amended federal tax return Read the Internal Revenue Code, regulations, or other official guidance. How do you file an amended federal tax return Read Internal Revenue Bulletins. How do you file an amended federal tax return Sign up to receive local and national tax news by email. How do you file an amended federal tax return Phone. How do you file an amended federal tax return You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. How do you file an amended federal tax return Download the free IRS2Go mobile app from the iTunes app store or from Google Play. How do you file an amended federal tax return Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. How do you file an amended federal tax return Call to locate the nearest volunteer help site, 1-800-906-9887. How do you file an amended federal tax return Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. How do you file an amended federal tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. How do you file an amended federal tax return Most VITA and TCE sites offer free electronic filing. How do you file an amended federal tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. How do you file an amended federal tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. How do you file an amended federal tax return Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. How do you file an amended federal tax return The automated Where's My Refund? information is available 24 hours a day, 7 days a week. How do you file an amended federal tax return If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. How do you file an amended federal tax return Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. How do you file an amended federal tax return Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. How do you file an amended federal tax return Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. How do you file an amended federal tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. How do you file an amended federal tax return Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). How do you file an amended federal tax return You should receive your order within 10 business days. How do you file an amended federal tax return Call to order transcripts of your tax returns or tax account, 1-800-908-9946. How do you file an amended federal tax return Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. How do you file an amended federal tax return Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. How do you file an amended federal tax return Call to ask tax questions, 1-800-829-1040. How do you file an amended federal tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. How do you file an amended federal tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. How do you file an amended federal tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. How do you file an amended federal tax return gsa. How do you file an amended federal tax return gov/fedrelay. How do you file an amended federal tax return Walk-in. How do you file an amended federal tax return You can find a selection of forms, publications and services — in-person, face-to-face. How do you file an amended federal tax return Products. How do you file an amended federal tax return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. How do you file an amended federal tax return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. How do you file an amended federal tax return Services. How do you file an amended federal tax return You can walk in to your local TAC most business days for personal, face-to-face tax help. How do you file an amended federal tax return An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. How do you file an amended federal tax return If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. How do you file an amended federal tax return No appointment is necessary—just walk in. How do you file an amended federal tax return Before visiting, check www. How do you file an amended federal tax return irs. How do you file an amended federal tax return gov/localcontacts for hours of operation and services provided. How do you file an amended federal tax return Mail. How do you file an amended federal tax return You can send your order for forms, instructions, and publications to the address below. How do you file an amended federal tax return You should receive a response within 10 business days after your request is received. How do you file an amended federal tax return  Internal Revenue Service 1201 N. How do you file an amended federal tax return Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. How do you file an amended federal tax return   The Taxpayer Advocate Service (TAS) is your voice at the IRS. How do you file an amended federal tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. How do you file an amended federal tax return What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. How do you file an amended federal tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. How do you file an amended federal tax return You face (or your business is facing) an immediate threat of adverse action. How do you file an amended federal tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. How do you file an amended federal tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. How do you file an amended federal tax return Here's why we can help: TAS is an independent organization within the IRS. How do you file an amended federal tax return Our advocates know how to work with the IRS. How do you file an amended federal tax return Our services are free and tailored to meet your needs. How do you file an amended federal tax return We have offices in every state, the District of Columbia, and Puerto Rico. How do you file an amended federal tax return How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. How do you file an amended federal tax return irs. How do you file an amended federal tax return gov/advocate, or call us toll-free at 1-877-777-4778. How do you file an amended federal tax return How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. How do you file an amended federal tax return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. How do you file an amended federal tax return irs. How do you file an amended federal tax return gov/sams. How do you file an amended federal tax return Low Income Taxpayer Clinics. How do you file an amended federal tax return   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. How do you file an amended federal tax return Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. How do you file an amended federal tax return Visit www. How do you file an amended federal tax return TaxpayerAdvocate. How do you file an amended federal tax return irs. How do you file an amended federal tax return gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. How do you file an amended federal tax return Prev  Up  Next   Home   More Online Publications
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The How Do You File An Amended Federal Tax Return

How do you file an amended federal tax return Publication 15-A - Main Content Table of Contents 1. How do you file an amended federal tax return Who Are Employees?Independent Contractors Common-Law Employees Statutory Employees Statutory Nonemployees Misclassification of Employees 2. How do you file an amended federal tax return Employee or Independent Contractor?Common-Law Rules Industry Examples 3. How do you file an amended federal tax return Employees of Exempt OrganizationsSocial security and Medicare taxes. How do you file an amended federal tax return FUTA tax. How do you file an amended federal tax return 4. How do you file an amended federal tax return Religious Exemptions and Special Rules for MinistersForm W-2. How do you file an amended federal tax return Self-employed. How do you file an amended federal tax return Employees. How do you file an amended federal tax return 5. How do you file an amended federal tax return Wages and Other CompensationRelocating for Temporary Work Assignments Employee Achievement Awards Scholarship and Fellowship Payments Outplacement Services Withholding for Idle Time Back Pay Supplemental Unemployment Benefits Golden Parachute Payments Interest-Free and Below-Market-Interest-Rate Loans Leave Sharing Plans Nonqualified Deferred Compensation Plans Tax-Sheltered Annuities Contributions to a Simplified Employee Pension (SEP) SIMPLE Retirement Plans 6. How do you file an amended federal tax return Sick Pay ReportingSick Pay Payments That Are Not Sick Pay Sick Pay Plan Third-Party Payers of Sick Pay Social Security, Medicare, and FUTA Taxes on Sick Pay Income Tax Withholding on Sick Pay Depositing and Reporting Example of Figuring and Reporting Sick Pay 7. How do you file an amended federal tax return Special Rules for Paying TaxesCommon Paymaster Agents Reporting Agents Employee's Portion of Taxes Paid by Employer International Social Security Agreements 8. How do you file an amended federal tax return Pensions and AnnuitiesFederal Income Tax Withholding 9. How do you file an amended federal tax return Alternative Methods for Figuring WithholdingTerm of continuous employment. How do you file an amended federal tax return Formula Tables for Percentage Method Withholding (for Automated Payroll Systems) Wage Bracket Percentage Method Tables (for Automated Payroll Systems) Combined Federal Income Tax, Employee Social Security Tax, and Employee Medicare Tax Withholding Tables 10. How do you file an amended federal tax return Tables for Withholding on Distributions of Indian Gaming Profits to Tribal MembersWithholding Tables How To Get Tax Help 1. How do you file an amended federal tax return Who Are Employees? Before you can know how to treat payments that you make to workers for services, you must first know the business relationship that exists between you and the person performing the services. How do you file an amended federal tax return The person performing the services may be: An independent contractor, A common-law employee, A statutory employee, or A statutory nonemployee. How do you file an amended federal tax return This discussion explains these four categories. How do you file an amended federal tax return A later discussion, Employee or Independent Contractor in section 2, points out the differences between an independent contractor and an employee and gives examples from various types of occupations. How do you file an amended federal tax return If an individual who works for you is not an employee under the common-law rules (see section 2), you generally do not have to withhold federal income tax from that individual's pay. How do you file an amended federal tax return However, in some cases you may be required to withhold under the backup withholding requirements on these payments. How do you file an amended federal tax return See Publication 15 (Circular E) for information on backup withholding. How do you file an amended federal tax return Independent Contractors People such as doctors, veterinarians, and auctioneers who follow an independent trade, business, or profession in which they offer their services to the public, are generally not employees. How do you file an amended federal tax return However, whether such people are employees or independent contractors depends on the facts in each case. How do you file an amended federal tax return The general rule is that an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result. How do you file an amended federal tax return Common-Law Employees Under common-law rules, anyone who performs services for you is generally your employee if you have the right to control what will be done and how it will be done. How do you file an amended federal tax return This is so even when you give the employee freedom of action. How do you file an amended federal tax return What matters is that you have the right to control the details of how the services are performed. How do you file an amended federal tax return For a discussion of facts that indicate whether an individual providing services is an independent contractor or employee, see section 2. How do you file an amended federal tax return If you have an employer-employee relationship, it makes no difference how it is labeled. How do you file an amended federal tax return The substance of the relationship, not the label, governs the worker's status. How do you file an amended federal tax return It does not matter whether the individual is employed full time or part time. How do you file an amended federal tax return For employment tax purposes, no distinction is made between classes of employees. How do you file an amended federal tax return Superintendents, managers, and other supervisory personnel are all employees. How do you file an amended federal tax return An officer of a corporation is generally an employee; however, an officer who performs no services or only minor services, and neither receives nor is entitled to receive any pay, is not considered an employee. How do you file an amended federal tax return A director of a corporation is not an employee with respect to services performed as a director. How do you file an amended federal tax return You generally have to withhold and pay income, social security, and Medicare taxes on wages that you pay to common-law employees. How do you file an amended federal tax return However, the wages of certain employees may be exempt from one or more of these taxes. How do you file an amended federal tax return See Employees of Exempt Organizations (section 3) and Religious Exemptions and Special Rules for Ministers (section 4). How do you file an amended federal tax return Leased employees. How do you file an amended federal tax return   Under certain circumstances, a firm that furnishes workers to other firms is the employer of those workers for employment tax purposes. How do you file an amended federal tax return For example, a temporary staffing service may provide the services of secretaries, nurses, and other similarly trained workers to its clients on a temporary basis. How do you file an amended federal tax return   The staffing service enters into contracts with the clients under which the clients specify the services to be provided and a fee is paid to the staffing service for each individual furnished. How do you file an amended federal tax return The staffing service has the right to control and direct the worker's services for the client, including the right to discharge or reassign the worker. How do you file an amended federal tax return The staffing service hires the workers, controls the payment of their wages, provides them with unemployment insurance and other benefits, and is the employer for employment tax purposes. How do you file an amended federal tax return For information on employee leasing as it relates to pension plan qualification requirements, see Leased employee in Publication 560, Retirement Plans for Small Business. How do you file an amended federal tax return Additional information. How do you file an amended federal tax return   For more information about the treatment of special types of employment, the treatment of special types of payments, and similar subjects, see Publication 15 (Circular E) or Publication 51 (Circular A), Agricultural Employer's Tax Guide. How do you file an amended federal tax return Statutory Employees If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute, (also known as “statutory employees”) for certain employment tax purposes. How do you file an amended federal tax return This would happen if they fall within any one of the following four categories and meet the three conditions described next under Social security and Medicare taxes . How do you file an amended federal tax return A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission. How do you file an amended federal tax return A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company. How do you file an amended federal tax return An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done. How do you file an amended federal tax return A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. How do you file an amended federal tax return The goods sold must be merchandise for resale or supplies for use in the buyer's business operation. How do you file an amended federal tax return The work performed for you must be the salesperson's principal business activity. How do you file an amended federal tax return See Salesperson in section 2. How do you file an amended federal tax return Social security and Medicare taxes. How do you file an amended federal tax return   You must withhold social security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply. How do you file an amended federal tax return The service contract states or implies that substantially all the services are to be performed personally by them. How do you file an amended federal tax return They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in facilities for transportation, such as a car or truck). How do you file an amended federal tax return The services are performed on a continuing basis for the same payer. How do you file an amended federal tax return Federal unemployment (FUTA) tax. How do you file an amended federal tax return   For FUTA tax (the unemployment tax paid under the Federal Unemployment Tax Act), the term “employee” means the same as it does for social security and Medicare taxes, except that it does not include statutory employees defined above in categories 2 and 3. How do you file an amended federal tax return Any individual who is a statutory employee described above under category 1 or 4 is also an employee for FUTA tax purposes and subject to FUTA tax. How do you file an amended federal tax return Income tax. How do you file an amended federal tax return   Do not withhold federal income tax from the wages of statutory employees. How do you file an amended federal tax return Reporting payments to statutory employees. How do you file an amended federal tax return   Furnish Form W-2 to a statutory employee, and check “Statutory employee” in box 13. How do you file an amended federal tax return Show your payments to the employee as “other compensation” in box 1. How do you file an amended federal tax return Also, show social security wages in box 3, social security tax withheld in box 4, Medicare wages in box 5, and Medicare tax withheld in box 6. How do you file an amended federal tax return The statutory employee can deduct his or her trade or business expenses from the payments shown on Form W-2. How do you file an amended federal tax return He or she reports earnings as a statutory employee on line 1 of Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. How do you file an amended federal tax return A statutory employee's business expenses are deductible on Schedule C (Form 1040) or C-EZ (Form 1040) and are not subject to the reduction by 2% of his or her adjusted gross income that applies to common-law employees. How do you file an amended federal tax return H-2A agricultural workers. How do you file an amended federal tax return   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. How do you file an amended federal tax return Statutory Nonemployees There are three categories of statutory nonemployees: direct sellers, licensed real estate agents, and certain companion sitters. How do you file an amended federal tax return Direct sellers and licensed real estate agents are treated as self-employed for all federal tax purposes, including income and employment taxes, if: Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked, and Their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes. How do you file an amended federal tax return Direct sellers. How do you file an amended federal tax return   Direct sellers include persons falling within any of the following three groups. How do you file an amended federal tax return Persons engaged in selling (or soliciting the sale of) consumer products in the home or place of business other than in a permanent retail establishment. How do you file an amended federal tax return Persons engaged in selling (or soliciting the sale of) consumer products to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis prescribed by regulations, for resale in the home or at a place of business other than in a permanent retail establishment. How do you file an amended federal tax return Persons engaged in the trade or business of delivering or distributing newspapers or shopping news (including any services directly related to such delivery or distribution). How do you file an amended federal tax return   Direct selling includes activities of individuals who attempt to increase direct sales activities of their direct sellers and who earn income based on the productivity of their direct sellers. How do you file an amended federal tax return Such activities include providing motivation and encouragement; imparting skills, knowledge, or experience; and recruiting. How do you file an amended federal tax return Licensed real estate agents. How do you file an amended federal tax return   This category includes individuals engaged in appraisal activities for real estate sales if they earn income based on sales or other output. How do you file an amended federal tax return Companion sitters. How do you file an amended federal tax return   Companion sitters are individuals who furnish personal attendance, companionship, or household care services to children or to individuals who are elderly or disabled. How do you file an amended federal tax return A person engaged in the trade or business of putting the sitters in touch with individuals who wish to employ them (that is, a companion sitting placement service) will not be treated as the employer of the sitters if that person does not receive or pay the salary or wages of the sitters and is compensated by the sitters or the persons who employ them on a fee basis. How do you file an amended federal tax return Companion sitters who are not employees of a companion sitting placement service are generally treated as self-employed for all federal tax purposes. How do you file an amended federal tax return Misclassification of Employees Consequences of treating an employee as an independent contractor. How do you file an amended federal tax return   If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you are liable for employment taxes for that worker and the relief provision, discussed next, will not apply. How do you file an amended federal tax return See section 2 in Publication 15 (Circular E) for more information. How do you file an amended federal tax return Relief provision. How do you file an amended federal tax return   If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. How do you file an amended federal tax return To get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker. How do you file an amended federal tax return You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. How do you file an amended federal tax return Technical service specialists. How do you file an amended federal tax return   This relief provision does not apply for a technical services specialist you provide to another business under an arrangement between you and the other business. How do you file an amended federal tax return A technical service specialist is an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work. How do you file an amended federal tax return   This limit on the application of the rule does not affect the determination of whether such workers are employees under the common-law rules. How do you file an amended federal tax return The common-law rules control whether the specialist is treated as an employee or an independent contractor. How do you file an amended federal tax return However, if you directly contract with a technical service specialist to provide services for your business and not for another business, you may still be entitled to the relief provision. How do you file an amended federal tax return Test proctors and room supervisors. How do you file an amended federal tax return   The consistent treatment requirement does not apply to services performed after December 31, 2006, by an individual as a test proctor or room supervisor assisting in the administration of college entrance or placement examinations if the individual: Is performing the services for a section 501(c) organization exempt from tax under section 501(a) of the code, and Is not otherwise treated as an employee of the organization for employment taxes. How do you file an amended federal tax return Voluntary Classification Settlement Program (VCSP). How do you file an amended federal tax return   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. How do you file an amended federal tax return To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). How do you file an amended federal tax return For more information, visit IRS. How do you file an amended federal tax return gov and enter “VCSP” in the search box. How do you file an amended federal tax return 2. How do you file an amended federal tax return Employee or Independent Contractor? An employer must generally withhold federal income taxes, withhold and pay over social security and Medicare taxes, and pay unemployment tax on wages paid to an employee. How do you file an amended federal tax return An employer does not generally have to withhold or pay over any federal taxes on payments to independent contractors. How do you file an amended federal tax return Common-Law Rules To determine whether an individual is an employee or an independent contractor under the common law, the relationship of the worker and the business must be examined. How do you file an amended federal tax return In any employee-independent contractor determination, all information that provides evidence of the degree of control and the degree of independence must be considered. How do you file an amended federal tax return Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. How do you file an amended federal tax return These facts are discussed next. How do you file an amended federal tax return Behavioral control. How do you file an amended federal tax return   Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of: Instructions that the business gives to the worker. How do you file an amended federal tax return   An employee is generally subject to the business' instructions about when, where, and how to work. How do you file an amended federal tax return All of the following are examples of types of instructions about how to do work. How do you file an amended federal tax return When and where to do the work. How do you file an amended federal tax return What tools or equipment to use. How do you file an amended federal tax return What workers to hire or to assist with the work. How do you file an amended federal tax return Where to purchase supplies and services. How do you file an amended federal tax return What work must be performed by a specified  individual. How do you file an amended federal tax return What order or sequence to follow. How do you file an amended federal tax return   The amount of instruction needed varies among different jobs. How do you file an amended federal tax return Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. How do you file an amended federal tax return A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. How do you file an amended federal tax return The key consideration is whether the business has retained the right to control the details of a worker's performance or instead has given up that right. How do you file an amended federal tax return Training that the business gives to the worker. How do you file an amended federal tax return   An employee may be trained to perform services in a particular manner. How do you file an amended federal tax return Independent contractors ordinarily use their own methods. How do you file an amended federal tax return Financial control. How do you file an amended federal tax return   Facts that show whether the business has a right to control the business aspects of the worker's job include: The extent to which the worker has unreimbursed business expenses. How do you file an amended federal tax return   Independent contractors are more likely to have unreimbursed expenses than are employees. How do you file an amended federal tax return Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. How do you file an amended federal tax return However, employees may also incur unreimbursed expenses in connection with the services that they perform for their employer. How do you file an amended federal tax return The extent of the worker's investment. How do you file an amended federal tax return   An independent contractor often has a significant investment in the facilities or tools he or she uses in performing services for someone else. How do you file an amended federal tax return However, a significant investment is not necessary for independent contractor status. How do you file an amended federal tax return The extent to which the worker makes his or her services available to the relevant market. How do you file an amended federal tax return   An independent contractor is generally free to seek out business opportunities. How do you file an amended federal tax return Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market. How do you file an amended federal tax return How the business pays the worker. How do you file an amended federal tax return   An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. How do you file an amended federal tax return This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. How do you file an amended federal tax return An independent contractor is often paid a flat fee or on a time and materials basis for the job. How do you file an amended federal tax return However, it is common in some professions, such as law, to pay independent contractors hourly. How do you file an amended federal tax return The extent to which the worker can realize a profit or loss. How do you file an amended federal tax return   An independent contractor can make a profit or loss. How do you file an amended federal tax return Type of relationship. How do you file an amended federal tax return   Facts that show the parties' type of relationship include: Written contracts describing the relationship the parties intended to create. How do you file an amended federal tax return Whether or not the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay. How do you file an amended federal tax return The permanency of the relationship. How do you file an amended federal tax return If you engage a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that your intent was to create an employer-employee relationship. How do you file an amended federal tax return The extent to which services performed by the worker are a key aspect of the regular business of the company. How do you file an amended federal tax return If a worker provides services that are a key aspect of your regular business activity, it is more likely that you will have the right to direct and control his or her activities. How do you file an amended federal tax return For example, if a law firm hires an attorney, it is likely that it will present the attorney's work as its own and would have the right to control or direct that work. How do you file an amended federal tax return This would indicate an employer-employee relationship. How do you file an amended federal tax return IRS help. How do you file an amended federal tax return   If you want the IRS to determine whether or not a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS. How do you file an amended federal tax return Industry Examples The following examples may help you properly classify your workers. How do you file an amended federal tax return Building and Construction Industry Example 1. How do you file an amended federal tax return Jerry Jones has an agreement with Wilma White to supervise the remodeling of her house. How do you file an amended federal tax return She did not advance funds to help him carry on the work. How do you file an amended federal tax return She makes direct payments to the suppliers for all necessary materials. How do you file an amended federal tax return She carries liability and workers' compensation insurance covering Jerry and others that he engaged to assist him. How do you file an amended federal tax return She pays them an hourly rate and exercises almost constant supervision over the work. How do you file an amended federal tax return Jerry is not free to transfer his assistants to other jobs. How do you file an amended federal tax return He may not work on other jobs while working for Wilma. How do you file an amended federal tax return He assumes no responsibility to complete the work and will incur no contractual liability if he fails to do so. How do you file an amended federal tax return He and his assistants perform personal services for hourly wages. How do you file an amended federal tax return Jerry Jones and his assistants are employees of Wilma White. How do you file an amended federal tax return Example 2. How do you file an amended federal tax return Milton Manning, an experienced tile setter, orally agreed with a corporation to perform full-time services at construction sites. How do you file an amended federal tax return He uses his own tools and performs services in the order designated by the corporation and according to its specifications. How do you file an amended federal tax return The corporation supplies all materials, makes frequent inspections of his work, pays him on a piecework basis, and carries workers' compensation insurance on him. How do you file an amended federal tax return He does not have a place of business or hold himself out to perform similar services for others. How do you file an amended federal tax return Either party can end the services at any time. How do you file an amended federal tax return Milton Manning is an employee of the corporation. How do you file an amended federal tax return Example 3. How do you file an amended federal tax return Wallace Black agreed with the Sawdust Co. How do you file an amended federal tax return to supply the construction labor for a group of houses. How do you file an amended federal tax return The company agreed to pay all construction costs. How do you file an amended federal tax return However, he supplies all the tools and equipment. How do you file an amended federal tax return He performs personal services as a carpenter and mechanic for an hourly wage. How do you file an amended federal tax return He also acts as superintendent and foreman and engages other individuals to assist him. How do you file an amended federal tax return The company has the right to select, approve, or discharge any helper. How do you file an amended federal tax return A company representative makes frequent inspections of the construction site. How do you file an amended federal tax return When a house is finished, Wallace is paid a certain percentage of its costs. How do you file an amended federal tax return He is not responsible for faults, defects of construction, or wasteful operation. How do you file an amended federal tax return At the end of each week, he presents the company with a statement of the amount that he has spent, including the payroll. How do you file an amended federal tax return The company gives him a check for that amount from which he pays the assistants, although he is not personally liable for their wages. How do you file an amended federal tax return Wallace Black and his assistants are employees of the Sawdust Co. How do you file an amended federal tax return Example 4. How do you file an amended federal tax return Bill Plum contracted with Elm Corporation to complete the roofing on a housing complex. How do you file an amended federal tax return A signed contract established a flat amount for the services rendered by Bill Plum. How do you file an amended federal tax return Bill is a licensed roofer and carries workers' compensation and liability insurance under the business name, Plum Roofing. How do you file an amended federal tax return He hires his own roofers who are treated as employees for federal employment tax purposes. How do you file an amended federal tax return If there is a problem with the roofing work, Plum Roofing is responsible for paying for any repairs. How do you file an amended federal tax return Bill Plum, doing business as Plum Roofing, is an independent contractor. How do you file an amended federal tax return Example 5. How do you file an amended federal tax return Vera Elm, an electrician, submitted a job estimate to a housing complex for electrical work at $16 per hour for 400 hours. How do you file an amended federal tax return She is to receive $1,280 every 2 weeks for the next 10 weeks. How do you file an amended federal tax return This is not considered payment by the hour. How do you file an amended federal tax return Even if she works more or less than 400 hours to complete the work, Vera Elm will receive $6,400. How do you file an amended federal tax return She also performs additional electrical installations under contracts with other companies, that she obtained through advertisements. How do you file an amended federal tax return Vera is an independent contractor. How do you file an amended federal tax return Trucking Industry Example. How do you file an amended federal tax return Rose Trucking contracts to deliver material for Forest, Inc. How do you file an amended federal tax return , at $140 per ton. How do you file an amended federal tax return Rose Trucking is not paid for any articles that are not delivered. How do you file an amended federal tax return At times, Jan Rose, who operates as Rose Trucking, may also lease another truck and engage a driver to complete the contract. How do you file an amended federal tax return All operating expenses, including insurance coverage, are paid by Jan Rose. How do you file an amended federal tax return All equipment is owned or rented by Jan and she is responsible for all maintenance. How do you file an amended federal tax return None of the drivers are provided by Forest, Inc. How do you file an amended federal tax return Jan Rose, operating as Rose Trucking, is an independent contractor. How do you file an amended federal tax return Computer Industry Example. How do you file an amended federal tax return Steve Smith, a computer programmer, is laid off when Megabyte, Inc. How do you file an amended federal tax return , downsizes. How do you file an amended federal tax return Megabyte agrees to pay Steve a flat amount to complete a one-time project to create a certain product. How do you file an amended federal tax return It is not clear how long that it will take to complete the project, and Steve is not guaranteed any minimum payment for the hours spent on the program. How do you file an amended federal tax return Megabyte provides Steve with no instructions beyond the specifications for the product itself. How do you file an amended federal tax return Steve and Megabyte have a written contract, which provides that Steve is considered to be an independent contractor, is required to pay federal and state taxes, and receives no benefits from Megabyte. How do you file an amended federal tax return Megabyte will file Form 1099-MISC, Miscellaneous Income, to report the amount paid to Steve. How do you file an amended federal tax return Steve works at home and is not expected or allowed to attend meetings of the software development group. How do you file an amended federal tax return Steve is an independent contractor. How do you file an amended federal tax return Automobile Industry Example 1. How do you file an amended federal tax return Donna Lee is a salesperson employed on a full-time basis by Bob Blue, an auto dealer. How do you file an amended federal tax return She works six days a week and is on duty in Bob's showroom on certain assigned days and times. How do you file an amended federal tax return She appraises trade-ins, but her appraisals are subject to the sales manager's approval. How do you file an amended federal tax return Lists of prospective customers belong to the dealer. How do you file an amended federal tax return She is required to develop leads and report results to the sales manager. How do you file an amended federal tax return Because of her experience, she requires only minimal assistance in closing and financing sales and in other phases of her work. How do you file an amended federal tax return She is paid a commission and is eligible for prizes and bonuses offered by Bob. How do you file an amended federal tax return Bob also pays the cost of health insurance and group-term life insurance for Donna. How do you file an amended federal tax return Donna is an employee of Bob Blue. How do you file an amended federal tax return Example 2. How do you file an amended federal tax return Sam Sparks performs auto repair services in the repair department of an auto sales company. How do you file an amended federal tax return He works regular hours and is paid on a percentage basis. How do you file an amended federal tax return He has no investment in the repair department. How do you file an amended federal tax return The sales company supplies all facilities, repair parts, and supplies; issues instructions on the amounts to be charged, parts to be used, and the time for completion of each job; and checks all estimates and repair orders. How do you file an amended federal tax return Sam is an employee of the sales company. How do you file an amended federal tax return Example 3. How do you file an amended federal tax return An auto sales agency furnishes space for Helen Bach to perform auto repair services. How do you file an amended federal tax return She provides her own tools, equipment, and supplies. How do you file an amended federal tax return She seeks out business from insurance adjusters and other individuals and does all of the body and paint work that comes to the agency. How do you file an amended federal tax return She hires and discharges her own helpers, determines her own and her helpers' working hours, quotes prices for repair work, makes all necessary adjustments, assumes all losses from uncollectible accounts, and receives, as compensation for her services, a large percentage of the gross collections from the auto repair shop. How do you file an amended federal tax return Helen is an independent contractor and the helpers are her employees. How do you file an amended federal tax return Attorney Example. How do you file an amended federal tax return Donna Yuma is a sole practitioner who rents office space and pays for the following items: telephone, computer, on-line legal research linkup, fax machine, and photocopier. How do you file an amended federal tax return Donna buys office supplies and pays bar dues and membership dues for three other professional organizations. How do you file an amended federal tax return Donna has a part-time receptionist who also does the bookkeeping. How do you file an amended federal tax return She pays the receptionist, withholds and pays federal and state employment taxes, and files a Form W-2 each year. How do you file an amended federal tax return For the past 2 years, Donna has had only three clients, corporations with which there have been long-standing relationships. How do you file an amended federal tax return Donna charges the corporations an hourly rate for her services, sending monthly bills detailing the work performed for the prior month. How do you file an amended federal tax return The bills include charges for long distance calls, on-line research time, fax charges, photocopies, postage, and travel, costs for which the corporations have agreed to reimburse her. How do you file an amended federal tax return Donna is an independent contractor. How do you file an amended federal tax return Taxicab Driver Example. How do you file an amended federal tax return Tom Spruce rents a cab from Taft Cab Co. How do you file an amended federal tax return for $150 per day. How do you file an amended federal tax return He pays the costs of maintaining and operating the cab. How do you file an amended federal tax return Tom Spruce keeps all fares that he receives from customers. How do you file an amended federal tax return Although he receives the benefit of Taft's two-way radio communication equipment, dispatcher, and advertising, these items benefit both Taft and Tom Spruce. How do you file an amended federal tax return Tom Spruce is an independent contractor. How do you file an amended federal tax return Salesperson To determine whether salespersons are employees under the usual common-law rules, you must evaluate each individual case. How do you file an amended federal tax return If a salesperson who works for you does not meet the tests for a common-law employee, discussed earlier in this section, you do not have to withhold federal income tax from his or her pay (see Statutory Employees in section 1). How do you file an amended federal tax return However, even if a salesperson is not an employee under the usual common-law rules for income tax withholding, his or her pay may still be subject to social security, Medicare, and FUTA taxes as a statutory employee. How do you file an amended federal tax return To determine whether a salesperson is an employee for social security, Medicare, and FUTA tax purposes, the salesperson must meet all eight elements of the statutory employee test. How do you file an amended federal tax return A salesperson is a statutory employee for social security, Medicare, and FUTA tax purposes if he or she: Works full time for one person or company except, possibly, for sideline sales activities on behalf of some other person, Sells on behalf of, and turns his or her orders over to, the person or company for which he or she works, Sells to wholesalers, retailers, contractors, or operators of hotels, restaurants, or similar establishments, Sells merchandise for resale, or supplies for use in the customer's business, Agrees to do substantially all of this work personally, Has no substantial investment in the facilities used to do the work, other than in facilities for transportation, Maintains a continuing relationship with the person or company for which he or she works, and Is not an employee under common-law rules. How do you file an amended federal tax return 3. How do you file an amended federal tax return Employees of Exempt Organizations Many nonprofit organizations are exempt from federal income tax. How do you file an amended federal tax return Although they do not have to pay federal income tax themselves, they must still withhold federal income tax from the pay of their employees. How do you file an amended federal tax return However, there are special social security, Medicare, and FUTA tax rules that apply to the wages that they pay their employees. How do you file an amended federal tax return Section 501(c)(3) organizations. How do you file an amended federal tax return   Nonprofit organizations that are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code include any community chest, fund, or foundation organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. How do you file an amended federal tax return These organizations are usually corporations and are exempt from federal income tax under section 501(a). How do you file an amended federal tax return Social security and Medicare taxes. How do you file an amended federal tax return   Wages paid to employees of section 501(c)(3) organizations are subject to social security and Medicare taxes unless one of the following situations applies. How do you file an amended federal tax return The organization pays an employee less than $100 in a calendar year. How do you file an amended federal tax return The organization is a church or church-controlled organization opposed for religious reasons to the payment of social security and Medicare taxes and has filed Form 8274, Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption From Employer Social Security and Medicare Taxes, to elect exemption from social security and Medicare taxes. How do you file an amended federal tax return The organization must have filed for exemption before the first date on which a quarterly employment tax return (Form 941) or annual employment tax return (Form 944) would otherwise be due. How do you file an amended federal tax return   An employee of a church or church-controlled organization that is exempt from social security and Medicare taxes must pay self-employment tax if the employee is paid $108. How do you file an amended federal tax return 28 or more in a year. How do you file an amended federal tax return However, an employee who is a member of a qualified religious sect can apply for an exemption from the self-employment tax by filing Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. How do you file an amended federal tax return See Members of recognized religious sects opposed to insurance in section 4. How do you file an amended federal tax return FUTA tax. How do you file an amended federal tax return   An organization that is exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code is also exempt from FUTA tax. How do you file an amended federal tax return This exemption cannot be waived. How do you file an amended federal tax return Do not file Form 940 to report wages paid by these organizations or pay the tax. How do you file an amended federal tax return Note. How do you file an amended federal tax return An organization wholly owned by a state or its political subdivision should contact the appropriate state official for information about reporting and getting social security and Medicare coverage for its employees. How do you file an amended federal tax return Other than section 501(c)(3) organizations. How do you file an amended federal tax return   Nonprofit organizations that are not section 501(c)(3) organizations may also be exempt from federal income tax under section 501(a) or section 521. How do you file an amended federal tax return However, these organizations are not exempt from withholding federal income, social security, or Medicare tax from their employees' pay, or from paying FUTA tax. How do you file an amended federal tax return Two special rules for social security, Medicare, and FUTA taxes apply. How do you file an amended federal tax return If an employee is paid less than $100 during a calendar year, his or her wages are not subject to social security and Medicare taxes. How do you file an amended federal tax return If an employee is paid less than $50 in a calendar quarter, his or her wages are not subject to FUTA tax for the quarter. How do you file an amended federal tax return The above rules do not apply to employees who work for pension plans and other similar organizations described in section 401(a). How do you file an amended federal tax return 4. How do you file an amended federal tax return Religious Exemptions and Special Rules for Ministers Special rules apply to the treatment of ministers for social security and Medicare tax purposes. How do you file an amended federal tax return An exemption from social security and Medicare taxes is available for ministers and certain other religious workers and members of certain recognized religious sects. How do you file an amended federal tax return For more information on getting an exemption, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. How do you file an amended federal tax return Ministers. How do you file an amended federal tax return   Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. How do you file an amended federal tax return They are given the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances and sacraments according to the prescribed tenets and practices of that religious organization. How do you file an amended federal tax return   Ministers are employees if they perform services in the exercise of ministry and are subject to your will and control. How do you file an amended federal tax return The common-law rules discussed in section 1 and section 2 should be applied to determine whether a minister is your employee or is self-employed. How do you file an amended federal tax return Whether the minister is an employee or self-employed, the earnings of a minister are not subject to federal income, social security, and Medicare tax withholding. How do you file an amended federal tax return However, even if the minister is a common law employee, the earnings as reported on the minister's Form 1040 are subject to self-employment tax and federal income tax. How do you file an amended federal tax return You do not withhold these taxes from wages earned by a minister, but if the minister is your employee, you may agree with the minister to voluntarily withhold tax to cover the minister's liability for self-employment tax and federal income tax. How do you file an amended federal tax return For more information, see Publication 517. How do you file an amended federal tax return Form W-2. How do you file an amended federal tax return   If your minister is an employee, report all taxable compensation as wages in box 1 on Form W-2. How do you file an amended federal tax return Include in this amount expense allowances or reimbursements paid under a nonaccountable plan, discussed in section 5 of Publication 15 (Circular E). How do you file an amended federal tax return Do not include a parsonage allowance (excludable housing allowance) in this amount. How do you file an amended federal tax return You may report a designated parsonage or rental allowance (housing allowance) and a utilities allowance, or the rental value of housing provided in a separate statement or in box 14 on Form W-2. How do you file an amended federal tax return Do not show on Form W-2, Form 941, or Form 944 any amount as social security or Medicare wages, or any withholding for social security or Medicare taxes. How do you file an amended federal tax return If you withheld federal income tax from the minister under a voluntary agreement, this amount should be shown in box 2 on Form W-2 as federal income tax withheld. How do you file an amended federal tax return For more information on ministers, see Publication 517. How do you file an amended federal tax return Exemptions for ministers and others. How do you file an amended federal tax return   Certain ordained ministers, Christian Science practitioners, and members of religious orders who have not taken a vow of poverty may apply to exempt their earnings from self-employment tax on religious grounds. How do you file an amended federal tax return The application must be based on conscientious opposition because of personal considerations to public insurance that makes payments in the event of death, disability, old age, or retirement, or that makes payments toward the cost of, or provides services for, medical care, including social security and Medicare benefits. How do you file an amended federal tax return The exemption applies only to qualified services performed for the religious organization. How do you file an amended federal tax return See Revenue Procedure 91-20, 1991-1 C. How do you file an amended federal tax return B. How do you file an amended federal tax return 524, for guidelines to determine whether an organization is a religious order or whether an individual is a member of a religious order. How do you file an amended federal tax return   To apply for the exemption, the employee should file Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners. How do you file an amended federal tax return See Publication 517 for more information about claiming an exemption from self-employment tax using Form 4361. How do you file an amended federal tax return Members of recognized religious sects opposed to insurance. How do you file an amended federal tax return   If you belong to a recognized religious sect or to a division of such sect that is opposed to insurance, you may qualify for an exemption from the self-employment tax. How do you file an amended federal tax return To qualify, you must be conscientiously opposed to accepting the benefits of any public or private insurance that makes payments because of death, disability, old age, or retirement, or makes payments toward the cost of, or provides services for, medical care (including social security and Medicare benefits). How do you file an amended federal tax return If you buy a retirement annuity from an insurance company, you will not be eligible for this exemption. How do you file an amended federal tax return Religious opposition based on the teachings of the sect is the only legal basis for the exemption. How do you file an amended federal tax return In addition, your religious sect (or division) must have existed since December 31, 1950. How do you file an amended federal tax return Self-employed. How do you file an amended federal tax return   If you are self-employed and a member of a recognized religious sect opposed to insurance, you can apply for exemption by filing Form 4029 to waive all social security and Medicare benefits. How do you file an amended federal tax return Employees. How do you file an amended federal tax return   The social security and Medicare tax exemption available to the self-employed who are members of a recognized religious sect opposed to insurance is also available to their employees who are members of such a sect. How do you file an amended federal tax return This applies to partnerships only if each partner is a member of the sect. How do you file an amended federal tax return This exemption for employees applies only if both the employee and the employer are members of such a sect, and the employer has an exemption. How do you file an amended federal tax return To get the exemption, the employee must file Form 4029. How do you file an amended federal tax return   An employee of a church or church-controlled organization that is exempt from social security and Medicare taxes can also apply for an exemption on Form 4029. How do you file an amended federal tax return 5. How do you file an amended federal tax return Wages and Other Compensation Publication 15 (Circular E) provides a general discussion of taxable wages. How do you file an amended federal tax return Publication 15-B discusses fringe benefits. How do you file an amended federal tax return The following topics supplement those discussions. How do you file an amended federal tax return Relocating for Temporary Work Assignments If an employee is given a temporary work assignment away from his or her regular place of work, certain travel expenses reimbursed or paid directly by the employer in accordance with an accountable plan (see section 5 in Publication 15 (Circular E)) may be excludable from the employee's wages. How do you file an amended federal tax return Generally, a temporary work assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. How do you file an amended federal tax return If the employee's new work assignment is indefinite, any living expenses reimbursed or paid by the employer (other than qualified moving expenses) must be included in the employee's wages as compensation. How do you file an amended federal tax return For the travel expenses to be excludable: The new work location must be outside of the city or general area of the employee's regular work place or post of duty, The travel expenses must otherwise qualify as deductible by the employee, and The expenses must be for the period during which the employee is at the temporary work location. How do you file an amended federal tax return If you reimburse or pay any personal expenses of an employee during his or her temporary work assignment, such as expenses for home leave for family members or for vacations, these amounts must be included in the employee's wages. How do you file an amended federal tax return See chapter 1 of Publication 463, Travel, Entertainment, Gift, and Car Expenses, and section 5 of Publication 15 (Circular E), for more information. How do you file an amended federal tax return These rules generally apply to temporary work assignments both inside and outside the U. How do you file an amended federal tax return S. How do you file an amended federal tax return Employee Achievement Awards Do not withhold federal income, social security, or Medicare taxes on the fair market value of an employee achievement award if it is excludable from your employee's gross income. How do you file an amended federal tax return To be excludable from your employee's gross income, the award must be tangible personal property (not cash, gift certificates, or securities) given to an employee for length of service or safety achievement, awarded as part of a meaningful presentation, and awarded under circumstances that do not indicate that the payment is disguised compensation. How do you file an amended federal tax return Excludable employee achievement awards also are not subject to FUTA tax. How do you file an amended federal tax return Limits. How do you file an amended federal tax return   The most that you can exclude for the cost of all employee achievement awards to the same employee for the year is $400. How do you file an amended federal tax return A higher limit of $1,600 applies to qualified plan awards. How do you file an amended federal tax return Qualified plan awards are employee achievement awards under a written plan that does not discriminate in favor of highly compensated employees. How do you file an amended federal tax return An award cannot be treated as a qualified plan award if the average cost per recipient of all awards under all of your qualified plans is more than $400. How do you file an amended federal tax return   If during the year an employee receives awards not made under a qualified plan and also receives awards under a qualified plan, the exclusion for the total cost of all awards to that employee cannot be more than $1,600. How do you file an amended federal tax return The $400 and $1,600 limits cannot be added together to exclude more than $1,600 for the cost of awards to any one employee during the year. How do you file an amended federal tax return Scholarship and Fellowship Payments Only amounts that you pay as a qualified scholarship to a candidate for a degree may be excluded from the recipient's gross income. How do you file an amended federal tax return A qualified scholarship is any amount granted as a scholarship or fellowship that is used for: Tuition and fees required to enroll in, or to attend, an educational institution, or Fees, books, supplies, and equipment that are required for courses at the educational institution. How do you file an amended federal tax return The exclusion from income does not apply to the portion of any amount received that represents payment for teaching, research, or other services required as a condition of receiving the scholarship or tuition reduction. How do you file an amended federal tax return These amounts are reportable on Form W-2. How do you file an amended federal tax return However, the exclusion will still apply for any amount received under two specific programs—the National Health Service Corps Scholarship Program and the Armed Forces Health Professions Scholarship and Financial Assistance Program—despite any service condition attached to those amounts. How do you file an amended federal tax return Any amounts that you pay for room and board are not excludable from the recipient's gross income. How do you file an amended federal tax return A qualified scholarship is not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. How do you file an amended federal tax return For more information, see Publication 970, Tax Benefits for Education. How do you file an amended federal tax return Outplacement Services If you provide outplacement services to your employees to help them find new employment (such as career counseling, resume assistance, or skills assessment), the value of these benefits may be income to them and subject to all withholding taxes. How do you file an amended federal tax return However, the value of these services will not be subject to any employment taxes if: You derive a substantial business benefit from providing the services (such as improved employee morale or business image) separate from the benefit that you would receive from the mere payment of additional compensation, and The employee would be able to deduct the cost of the services as employee business expenses if he or she had paid for them. How do you file an amended federal tax return However, if you receive no additional benefit from providing the services, or if the services are not provided on the basis of employee need, then the value of the services is treated as wages and is subject to federal income tax withholding and social security and Medicare taxes. How do you file an amended federal tax return Similarly, if an employee receives the outplacement services in exchange for reduced severance pay (or other taxable compensation), then the amount the severance pay is reduced is treated as wages for employment tax purposes. How do you file an amended federal tax return Withholding for Idle Time Payments made under a voluntary guarantee to employees for idle time (any time during which an employee performs no services) are wages for the purposes of social security, Medicare, and FUTA taxes, and federal income tax withholding. How do you file an amended federal tax return Back Pay Treat back pay as wages in the year paid and withhold and pay employment taxes as required. How do you file an amended federal tax return If back pay was awarded by a court or government agency to enforce a federal or state statute protecting an employee's right to employment or wages, special rules apply for reporting those wages to the Social Security Administration. How do you file an amended federal tax return These rules also apply to litigation actions and settlement agreements or agency directives that are resolved out of court and not under a court decree or order. How do you file an amended federal tax return Examples of pertinent statutes include, but are not limited to, the National Labor Relations Act, Fair Labor Standards Act, Equal Pay Act, and Age Discrimination in Employment Act. How do you file an amended federal tax return See Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration, and Form SSA-131, Employer Report of Special Wage Payments, for details. How do you file an amended federal tax return Supplemental Unemployment Benefits If you pay, under a plan, supplemental unemployment benefits to a former employee, all or part of the payments may be taxable and subject to federal income tax withholding, depending on how the plan is funded. How do you file an amended federal tax return Amounts that represent a return to the employee of amounts previously subject to tax are not taxable and are not subject to withholding. How do you file an amended federal tax return You should withhold federal income tax on the taxable part of the payments made, under a plan, to an employee who is involuntarily separated because of a reduction in force, discontinuance of a plant or operation, or other similar condition. How do you file an amended federal tax return It does not matter whether the separation is temporary or permanent. How do you file an amended federal tax return There are special rules that apply in determining whether benefits qualify as supplemental unemployment benefits that are excluded from wages for social security, Medicare, and FUTA tax purposes. How do you file an amended federal tax return To qualify as supplemental unemployment benefits for these purposes, the benefits must meet the following requirements. How do you file an amended federal tax return Benefits are paid only to unemployed former employees who are laid off by the employer. How do you file an amended federal tax return Eligibility for benefits depends on meeting prescribed conditions after termination. How do you file an amended federal tax return The amount of weekly benefits payable is based upon state unemployment benefits, other compensation allowable under state law, and the amount of regular weekly pay. How do you file an amended federal tax return The right to benefits does not accrue until a prescribed period after termination. How do you file an amended federal tax return Benefits are not attributable to the performance of particular services. How do you file an amended federal tax return No employee has any right to the benefits until qualified and eligible to receive benefits. How do you file an amended federal tax return Benefits may not be paid in a lump sum. How do you file an amended federal tax return Withholding on taxable supplemental unemployment benefits must be based on the withholding certificate (Form W-4) that the employee gave to you. How do you file an amended federal tax return Golden Parachute Payments A golden parachute payment, in general, is a payment made under a contract entered into by a corporation and key personnel. How do you file an amended federal tax return Under the agreement, the corporation agrees to pay certain amounts to its key personnel in the event of a change in ownership or control of the corporation. How do you file an amended federal tax return Payments to employees under golden parachute contracts are subject to social security, Medicare, and FUTA taxes, and federal income tax withholding. How do you file an amended federal tax return See Regulations section 1. How do you file an amended federal tax return 280G-1 for more information. How do you file an amended federal tax return No deduction is allowed to the corporation for any excess parachute payment. How do you file an amended federal tax return To determine the amount of the excess parachute payment, you must first determine if there is a parachute payment for purposes of section 280G. How do you file an amended federal tax return A parachute payment for purposes of section 280G is any payment that meets all of the following. How do you file an amended federal tax return The payment is in the nature of compensation. How do you file an amended federal tax return The payment is to, or for the benefit of, a disqualified individual. How do you file an amended federal tax return A disqualified individual is anyone who at any time during the 12-month period prior to and ending on the date of the change in ownership or control of the corporation (the disqualified individual determination period) was an employee or independent contractor and was, in regard to that corporation, a shareholder, an officer, or highly compensated individual. How do you file an amended federal tax return The payment is contingent on a change in ownership of the corporation, the effective control of the corporation, or the ownership of a substantial portion of the assets of the corporation. How do you file an amended federal tax return The payment has an aggregate present value of at least three times the individual's base amount. How do you file an amended federal tax return The base amount is the average annual compensation for service includible in the individual's gross income over the most recent 5 taxable years. How do you file an amended federal tax return An excess parachute payment amount is the excess of any parachute payment over the base amount. How do you file an amended federal tax return For more information, see Regulations section 1. How do you file an amended federal tax return 280G-1. How do you file an amended federal tax return The recipient of an excess parachute payment is subject to a 20% nondeductible excise tax. How do you file an amended federal tax return If the recipient is an employee, the 20% excise tax is to be withheld by the corporation. How do you file an amended federal tax return Example. How do you file an amended federal tax return An officer of a corporation receives a golden parachute payment of $400,000. How do you file an amended federal tax return This is more than three times greater than his or her average compensation of $100,000 over the previous 5-year period. How do you file an amended federal tax return The excess parachute payment is $300,000 ($400,000 minus $100,000). How do you file an amended federal tax return The corporation cannot deduct the $300,000 and must withhold the excise tax of $60,000 (20% of $300,000). How do you file an amended federal tax return Reporting golden parachute payments. How do you file an amended federal tax return   Golden parachute payments to employees must be reported on Form W-2. How do you file an amended federal tax return See the General Instructions for Forms W-2 and W-3 for details. How do you file an amended federal tax return For nonemployee reporting of these payments, see Box 7. How do you file an amended federal tax return Nonemployee Compensation in the Instructions for Form 1099-MISC. How do you file an amended federal tax return Exempt payments. How do you file an amended federal tax return   Payments by most small business corporations and payments under certain qualified plans are exempt from the golden parachute rules. How do you file an amended federal tax return See section 280G(b)(5) and (6) for more information. How do you file an amended federal tax return Interest-Free and Below-Market-Interest-Rate Loans In general, if an employer lends an employee more than $10,000 at an interest rate less than the current applicable federal rate (AFR), the difference between the interest paid and the interest that would be paid under the AFR is considered additional compensation to the employee. How do you file an amended federal tax return This rule applies to a loan of $10,000 or less if one of its principal purposes is the avoidance of federal tax. How do you file an amended federal tax return This additional compensation to the employee is subject to social security, Medicare, and FUTA taxes, but not to federal income tax withholding. How do you file an amended federal tax return Include it in compensation on Form W-2 (or Form 1099-MISC for an independent contractor). How do you file an amended federal tax return The AFR is established monthly and published by the IRS each month in the Internal Revenue Bulletin. How do you file an amended federal tax return You can get these rates by calling 1-800-829-4933 or by visiting IRS. How do you file an amended federal tax return gov. How do you file an amended federal tax return For more information, see section 7872 and its related regulations. How do you file an amended federal tax return Leave Sharing Plans If you establish a leave sharing plan for your employees that allows them to transfer leave to other employees for medical emergencies, the amounts paid to the recipients of the leave are considered wages. How do you file an amended federal tax return These amounts are includible in the gross income of the recipients and are subject to social security, Medicare, and FUTA taxes, and federal income tax withholding. How do you file an amended federal tax return Do not include these amounts in the income of the transferors. How do you file an amended federal tax return These rules apply only to leave sharing plans that permit employees to transfer leave to other employees for medical emergencies. How do you file an amended federal tax return Nonqualified Deferred Compensation Plans Income Tax and Reporting Section 409A provides that all amounts deferred under a nonqualified deferred compensation (NQDC) plan for all tax years are currently includible in gross income (to the extent not subject to a substantial risk of forfeiture and not previously included in gross income) and subject to additional taxes, unless certain requirements are met pertaining to, among other things, elections to defer compensation and distributions under a NQDC plan. How do you file an amended federal tax return Section 409A also includes rules that apply to certain trusts or similar arrangements associated with NQDC plans if the trusts or arrangements are located outside of the United States, are restricted to the provision of benefits in connection with a decline in the financial health of the plan sponsor, or contributions are made to the trust during certain periods such as when a qualified plan of the service recipient is underfunded. How do you file an amended federal tax return Employers must withhold federal income tax (but not the additional Section 409A taxes) on any amount includible in gross income under section 409A. How do you file an amended federal tax return Other changes to the Internal Revenue Code provide that the deferrals under a NQDC plan must be reported separately on Form W-2 or Form 1099-MISC, whichever applies. How do you file an amended federal tax return Specific rules for reporting are provided in the instructions to the forms. How do you file an amended federal tax return The provisions do not affect the application or reporting of social security, Medicare, or FUTA taxes. How do you file an amended federal tax return The provisions do not prevent the inclusion of amounts in income or wages under other provisions of the Internal Revenue Code or common law principles, such as when amounts are actually or constructively received or irrevocably contributed to a separate fund. How do you file an amended federal tax return For more information about nonqualified deferred compensation plans, see Regulations sections 1. How do you file an amended federal tax return 409A-1 through 1. How do you file an amended federal tax return 409A-6. How do you file an amended federal tax return Notice 2008-113 provides guidance on the correction of certain operation failures of a NQDC plan. How do you file an amended federal tax return Notice 2008-113, 2008-51 I. How do you file an amended federal tax return R. How do you file an amended federal tax return B. How do you file an amended federal tax return 1305, is available at www. How do you file an amended federal tax return irs. How do you file an amended federal tax return gov/irb/2008-51_IRB/ar12. How do you file an amended federal tax return html. How do you file an amended federal tax return Also see Notice 2010-6, 2010-3 I. How do you file an amended federal tax return R. How do you file an amended federal tax return B. How do you file an amended federal tax return 275, available at www. How do you file an amended federal tax return irs. How do you file an amended federal tax return gov/irb/2010-03_IRB/ar08. How do you file an amended federal tax return html and Notice 2010-80, 2010-51 I. How do you file an amended federal tax return R. How do you file an amended federal tax return B. How do you file an amended federal tax return 853, available at www. How do you file an amended federal tax return irs. How do you file an amended federal tax return gov/irb/2010-51_IRB/ar08. How do you file an amended federal tax return html. How do you file an amended federal tax return Social security, Medicare, and FUTA taxes. How do you file an amended federal tax return   Employer contributions to nonqualified deferred compensation (NQDC) plans, as defined in the applicable regulations, are treated as wages subject to social security, Medicare, and FUTA taxes when the services are performed or the employee no longer has a substantial risk of forfeiting the right to the deferred compensation, whichever is later. How do you file an amended federal tax return   Amounts deferred are subject to social security, Medicare, and FUTA taxes at that time unless the amount that is deferred cannot be reasonably ascertained; for example, if benefits are based on final pay. How do you file an amended federal tax return If the value of the future benefit is based on any factors that are not yet reasonably ascertainable, you may choose to estimate the value of the future benefit and withhold and pay social security, Medicare, and FUTA taxes on that amount. How do you file an amended federal tax return You will have to determine later, when the amount is reasonably ascertainable, whether any additional taxes are required. How do you file an amended federal tax return If taxes are not paid before the amounts become reasonably ascertainable, when the amounts become reasonably ascertainable they are subject to social security, Medicare, and FUTA taxes on the amounts deferred plus the income attributable to those amounts deferred. How do you file an amended federal tax return For more information, see Regulations sections 31. How do you file an amended federal tax return 3121(v)(2)-1 and 31. How do you file an amended federal tax return 3306(r)(2)-1. How do you file an amended federal tax return Tax-Sheltered Annuities Employer payments made by a public educational institution or a tax-exempt organization to purchase a tax-sheltered annuity for an employee (annual deferrals) are included in the employee's social security and Medicare wages, if the payments are made because of a salary reduction agreement. How do you file an amended federal tax return However, they are not included in box 1 on Form W-2 in the year the deferrals are made and are not subject to federal income tax withholding. How do you file an amended federal tax return See Regulations section 31. How do you file an amended federal tax return 3121(a)(5)-2 for the definition of a salary reduction agreement. How do you file an amended federal tax return Contributions to a Simplified Employee Pension (SEP) An employer's SEP contributions to an employee's individual retirement arrangement (IRA) are excluded from the employee's gross income. How do you file an amended federal tax return These excluded amounts are not subject to social security, Medicare, or FUTA taxes, or federal income tax withholding. How do you file an amended federal tax return However, any SEP contributions paid under a salary reduction agreement (SARSEP) are included in wages for purposes of social security, Medicare, and FUTA taxes. How do you file an amended federal tax return See Publication 560 for more information about SEPs. How do you file an amended federal tax return Salary reduction simplified employee pensions (SARSEP) repealed. How do you file an amended federal tax return   You may not establish a SARSEP after 1996. How do you file an amended federal tax return However, SARSEPs established before January 1, 1997, may continue to receive contributions. How do you file an amended federal tax return SIMPLE Retirement Plans Employer and employee contributions to a savings incentive match plan for employees (SIMPLE) retirement account (subject to limitations) are excludable from the employee's income and are exempt from federal income tax withholding. How do you file an amended federal tax return An employer's nonelective (2%) or matching contributions are exempt from social security, Medicare, and FUTA taxes. How do you file an amended federal tax return However, an employee's salary reduction contributions to a SIMPLE are subject to social security, Medicare, and FUTA taxes. How do you file an amended federal tax return For more information about SIMPLE retirement plans, see Publication 560. How do you file an amended federal tax return 6. How do you file an amended federal tax return Sick Pay Reporting The IRS expects to change the third-party sick pay recap reporting and filing requirements for wages paid in 2014. How do you file an amended federal tax return Information about this change will be included in the revision of Publication 15-A that is expected to post to IRS. How do you file an amended federal tax return gov in December 2014. How do you file an amended federal tax return Special rules apply to the reporting of sick pay payments to employees. How do you file an amended federal tax return How these payments are reported depends on whether the payments are made by the employer or a third party, such as an insurance company. How do you file an amended federal tax return Sick pay is usually subject to social security, Medicare, and FUTA taxes. How do you file an amended federal tax return For exceptions, see Social Security, Medicare, and FUTA Taxes on Sick Pay , later in this section. How do you file an amended federal tax return Sick pay may also be subject to either mandatory or voluntary federal income tax withholding, depending on who pays it. How do you file an amended federal tax return Sick Pay Sick pay generally means any amount paid under a plan because of an employee's temporary absence from work due to injury, sickness, or disability. How do you file an amended federal tax return It may be paid by either the employer or a third party, such as an insurance company. How do you file an amended federal tax return Sick pay includes both short- and long-term benefits. How do you file an amended federal tax return It is often expressed as a percentage of the employee's regular wages. How do you file an amended federal tax return Payments That Are Not Sick Pay Sick pay does not include the following payments. How do you file an amended federal tax return Disability retirement payments. How do you file an amended federal tax return Disability retirement payments are not sick pay and are not discussed in this section. How do you file an amended federal tax return Those payments are subject to the rules for federal income tax withholding from pensions and annuities. How do you file an amended federal tax return See section 8. How do you file an amended federal tax return Workers' compensation. How do you file an amended federal tax return Payments because of a work-related injury or sickness that are made under a workers' compensation law are not sick pay and are not subject to employment taxes. How do you file an amended federal tax return But see Payments in the nature of workers' compensation—public employees next. How do you file an amended federal tax return Payments in the nature of workers' compensation—public employees. How do you file an amended federal tax return State and local government employees, such as police officers and firefighters, sometimes receive payments due to an injury in the line of duty under a statute that is not the general workers' compensation law of a state. How do you file an amended federal tax return If the statute limits benefits to work-related injuries or sickness and does not base payments on the employee's age, length of service, or prior contributions, the statute is “in the nature of” a workers' compensation law. How do you file an amended federal tax return Payments under a statute in the nature of a workers' compensation law are not sick pay and are not subject to employment taxes. How do you file an amended federal tax return For more information, see Regulations section 31. How do you file an amended federal tax return 3121(a)(2)-1. How do you file an amended federal tax return Medical expense payments. How do you file an amended federal tax return Payments under a definite plan or system for medical and hospitalization expenses, or for insurance covering these expenses, are not sick pay and are not subject to employment taxes. How do you file an amended federal tax return Payments unrelated to absence from work. How do you file an amended federal tax return Accident or health insurance payments unrelated to absence from work are not sick pay and are not subject to employment taxes. How do you file an amended federal tax return These include payments for: Permanent loss of a member or function of the body, Permanent loss of the use of a member or function of the body, or Permanent disfigurement of the body. How do you file an amended federal tax return Example. How do you file an amended federal tax return Donald was injured in a car accident and lost an eye. How do you file an amended federal tax return Under a policy paid for by Donald's employer, Delta Insurance Co. How do you file an amended federal tax return paid Donald $20,000 as compensation for the loss of his eye. How do you file an amended federal tax return Because the payment was determined by the type of injury and was unrelated to Donald's absence from work, it is not sick pay and is not subject to federal employment taxes. How do you file an amended federal tax return Sick Pay Plan A sick pay plan is a plan or system established by an employer under which sick pay is available to employees generally or to a class or classes of employees. How do you file an amended federal tax return This does not include a situation in which benefits are provided on a discretionary or occasional basis with merely an intention to aid particular employees in time of need. How do you file an amended federal tax return You have a sick pay plan or system if the plan is in writing or is otherwise made known to employees, such as by a bulletin board notice or your long and established practice. How do you file an amended federal tax return Some indications that you have a sick pay plan or system include references to the plan or system in the contract of employment, employer contributions to a plan, or segregated accounts for the payment of benefits. How do you file an amended federal tax return Definition of employer. How do you file an amended federal tax return   The employer for whom the employee normally works, a term used in the following discussion, is either the employer for whom the employee was working at the time that the employee became sick or disabled or the last employer for whom the employee worked before becoming sick or disabled, if that employer made contributions to the sick pay plan on behalf of the sick or disabled employee. How do you file an amended federal tax return Note. How do you file an amended federal tax return Contributions to a sick pay plan through a cafeteria plan (by direct employer contributions or salary reduction) are employer contributions unless they are after-tax employee contributions (that is, included in taxable wages). How do you file an amended federal tax return Third-Party Payers of Sick Pay Employer's agent. How do you file an amended federal tax return   An employer's agent is a third party that bears no insurance risk and is reimbursed on a cost-plus-fee basis for payment of sick pay and similar amounts. How do you file an amended federal tax return A third party may be your agent even if the third party is responsible for determining which employees are eligible to receive payments. How do you file an amended federal tax return For example, if a third party provides administrative services only, the third party is your agent. How do you file an amended federal tax return If the third party is paid an insurance premium and is not reimbursed on a cost-plus-fee basis, the third party is not your agent. How do you file an amended federal tax return Whether an insurance company or other third party is your agent depends on the terms of their agreement with you. How do you file an amended federal tax return   A third party that makes payments of sick pay as your agent is not considered the employer and generally has no responsibility for employment taxes. How do you file an amended federal tax return This responsibility remains with you. How do you file an amended federal tax return However, under an exception to this rule, the parties may enter into an agreement that makes the third-party agent responsible for employment taxes. How do you file an amended federal tax return In this situation, the third-party agent should use its own name and EIN (rather than your name and EIN) for the responsibilities that it has assumed. How do you file an amended federal tax return Third party not employer's agent. How do you file an amended federal tax return   A third party that makes payments of sick pay other than as an agent of the employer is liable for federal income tax withholding (if requested by the employee) and the employee part of the social security and Medicare taxes. How do you file an amended federal tax return   The third party is also liable for the employer part of the social security and Medicare taxes, and the FUTA tax, unless the third party transfers this liability to the employer for whom the employee normally works. How do you file an amended federal tax return This liability is transferred if the third party takes the following steps. How do you file an amended federal tax return Withholds the employee social security and Medicare taxes from the sick pay payments. How do you file an amended federal tax return Makes timely deposits of the employee social security and Medicare taxes. How do you file an amended federal tax return Notifies the employer for whom the employee normally works of the payments on which employee taxes were withheld and deposited. How do you file an amended federal tax return The third party must notify the employer within the time required for the third party's deposit of the employee part of the social security and Medicare taxes. How do you file an amended federal tax return For instance, if the third party is a monthly schedule depositor, it must notify the employer by the 15th day of the month following the month in which the sick pay payment is made because that is the day by which the deposit is required to be made. How do you file an amended federal tax return The third party should notify the employer as soon as information on payments is available so that an employer required to make electronic deposits can make them timely. How do you file an amended federal tax return For multi-employer plans, see the special rule discussed next. How do you file an amended federal tax return Multi-employer plan timing rule. How do you file an amended federal tax return   A special rule applies to sick pay payments made to employees by a third-party insurer under an insurance contract with a multi-employer plan established under a collectively bargained agreement. How do you file an amended federal tax return If the third-party insurer making the payments complies wi