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How To Do Your Taxes

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How to do your taxes Publication 957 - Main Content Table of Contents 1. How to do your taxes What is Back Pay?Reporting Back Pay Back Pay Under a Statute Nonstatutory Back Pay Format for Report to the SSA Questions 2. How to do your taxes Special Wage PaymentsReporting Special Wage Payments Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments Nonqualified Deferred Compensation and Section 457 Plans Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) PlansSpecial rule for box 11 of Form W-2 (distributions and deferral in the same year). How to do your taxes 1. How to do your taxes What is Back Pay? Back pay is pay received in a tax year(s) for actual or deemed employment in an earlier tax year(s). How to do your taxes For social security coverage and benefit purposes, all back pay, whether or not under a statute, is wages if it is payment for covered employment. How to do your taxes Damages for personal injury, interest, penalties, and legal fees included with back pay awards are not wages. How to do your taxes Report all back pay. How to do your taxes However, the tax year(s) for which back pay is credited as wages for social security purposes is different if it is awarded under a statute. How to do your taxes See Back Pay Under a Statute , later, for more information. How to do your taxes Reporting Back Pay The Internal Revenue Service (IRS) and the SSA consider back pay awards to be wages. How to do your taxes However, for income tax purposes, the IRS treats all back pay as wages in the year paid. How to do your taxes Employers should use Form W-2, Wage and Tax Statement, or electronic wage reports to report back pay as wages in the year they actually pay the employee. How to do your taxes The SSA no longer accepts reports on tapes, cartridges, and diskettes. How to do your taxes Example. How to do your taxes In 2012, Terry Morris earned wages of $50,000. How to do your taxes In the same year, she received $100,000 in settlement of a back pay case against her employer that covered the periods January 2007 through December 2011. How to do your taxes Her employer properly reflected social security wages of $110,100 and Medicare wages of $150,000 on her 2012 Form W-2. How to do your taxes However, if an employer did not include back pay wages on a previously filed Form W-2, magnetic media, or electronically filed wage report, the employer should prepare a wage correction report, Form W-2c, Corrected Wage and Tax Statement, or electronically filed report, to add the back pay award to the wages previously reported. How to do your taxes Example. How to do your taxes If, in the above example, Terry Morris' employer had prepared her 2012 Form W-2 reporting social security and Medicare wages of only $50,000 each, the employer would have to correct that report. How to do your taxes A Form W-2c correcting the 2012 Form W-2 would show previously reported social security and Medicare wages of $50,000 and the correct amount of $110,100 for social security wages and $150,000 for Medicare wages. How to do your taxes SSA treatment of back pay under a statute. How to do your taxes   Under the law, the SSA credits back pay awarded under a statute to an individual's earnings record in the period(s) the wages should have been paid. How to do your taxes This is important because wages not credited to the proper year may result in lower social security benefits or failure to meet the requirements for benefits. How to do your taxes   However, back pay under statute payments will remain posted to the employee's social security earnings record in the year reported on Form W-2 (or Form W-2c) unless the employer or employee notifies the SSA (in a separate, special report) of the back pay under a statute payment. How to do your taxes Then, the SSA can allocate the statutory back pay to the appropriate periods. How to do your taxes   If a back pay award is not made under a statute, the SSA credits back pay as wages in the year paid. How to do your taxes    If employers do notify the SSA of this payment, they should prepare a special report (with the information noted below) and send it to: Social Security Administration Attn: CPS Back Pay Staff 7-B-15 SWT 1500 Woodlawn Drive Baltimore, MD 21241-0001 Be sure to send this special report to the above address because the SSA handles it separately from other reports. How to do your taxes    If you paid the back pay award in the same tax year to which it applies, report the wages on that year's Form W-2. How to do your taxes No further action is necessary. How to do your taxes Example. How to do your taxes In 2012, Judy Wilson received a salary of $30,000 and a back pay under statute award of $2,000 for the period January through June 2012. How to do your taxes Her employer properly reported wages of $32,000 for social security and Medicare on her 2012 Form W-2. How to do your taxes No further action is necessary. How to do your taxes Information the SSA needs to properly credit back pay under a statute (special report). How to do your taxes   After you complete the special report, you or the employee should send it to the SSA when or after you submit the Form W-2 (on paper or electronically) to the SSA for the year you pay the statutory back pay to the employee. How to do your taxes There is no statute of limitations on the filing of the special report to enable the SSA to allocate the wages. How to do your taxes The special report must include the following information. How to do your taxes The employer's name, address, and employer identification number (EIN). How to do your taxes A signed statement citing the federal or state statute under which the payment was made. How to do your taxes If the statute is not identified, the SSA will assume the payment was not under a statute and will not allocate to earlier period(s). How to do your taxes The name and telephone number of a person to contact. How to do your taxes The SSA may have additional questions concerning the back pay case or the individual employee's information. How to do your taxes A list of employees receiving the payment and the following information for each employee: The tax year you paid and reported the back pay. How to do your taxes The employee's social security number (SSN). How to do your taxes The employee's name (as shown on his or her social security card). How to do your taxes The amount of the back pay award excluding any amounts specifically designated otherwise, for example, damages for personal injury, interest, penalties, and legal fees. How to do your taxes The period(s) the back pay award covers (beginning and ending dates—month and year). How to do your taxes The other wages paid subject to social security and/or Medicare taxes and reported in the same year as the back pay award (if none, show zero)*. How to do your taxes Do not include the back pay award shown in that wage report. How to do your taxes If you originally submitted the report under an establishment number, show that number and the amount of money that is to remain under that establishment number. How to do your taxes The amount to allocate to each reporting period*. How to do your taxes This includes any amount you want allocated (if applicable) to the tax year of the award payment. How to do your taxes If you do not give the SSA specific amounts to allocate, the SSA does the allocation by dividing the back pay award by the number of months or years covered by the award. How to do your taxes *Note. How to do your taxes   For periods before January 1, 1978 (before January 1, 1981, for state and local government employers covered by a Section 218 agreement), show the wage amounts for each calendar quarter ending March 31, June 30, September 30, and December 31. How to do your taxes For all tax years, show and identify the social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) separately. How to do your taxes MQGE is applicable to federal employees beginning in 1983, and for certain state and local government employees beginning in 1986. How to do your taxes For tax years 1991 and later, list the social security and Medicare wages separately. How to do your taxes If you originally reported the individual's wages under an establishment or payroll record unit number, show the amount of wages to remain in the award year for that number and furnish that number to the SSA along with the EIN. How to do your taxes Back Pay Under a Statute Back pay awarded under a statute is a payment by an employer following an award, determination, or agreement approved or sanctioned by a court or government agency responsible for enforcing a federal or state statute that protects an employee's right to employment or wages. How to do your taxes Examples of pertinent statutes include: Age Discrimination in Employment Act, Americans with Disabilities Act, Equal Pay Act, Fair Labor Standards Act, National Labor Relations Act, State minimum wage laws, and State statutes that protect rights to employment and wages. How to do your taxes Payments based on laws that have a similar effect to those listed above also may qualify as payments made under a statute. How to do your taxes Back pay awards, under some of the statutes listed above, may be compensation for personal injury and not pay for employment. How to do your taxes Such awards are not wages for social security coverage purposes. How to do your taxes If a court-approved or sanctioned settlement agreement states that the agreement is not an admission of discrimination, liability, or act of wrongdoing, the statement does not change the nature of a back pay award. How to do your taxes The payments made in such a settlement may still be back pay and wages under the rules discussed here. How to do your taxes Nonstatutory Back Pay A payment for back wages negotiated between an employer and employee without an award, determination, or agreement approved or sanctioned by a court or government agency, the payment is not made under a statute. How to do your taxes Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are back pay and are wages. How to do your taxes However, they are not payments made under a statute. How to do your taxes If you are uncertain whether the back pay award was under a qualified statute, you may need to contact your personnel department or legal counsel or the attorney who filed the suit. How to do your taxes Format for Report to the SSA Use the format shown in Table 1, later, to send the SSA the information needed to properly credit back pay under a statute. How to do your taxes In a cover letter, include: Name and address of the employer, Statute under which you paid the back pay, Name and telephone number of the employer contact, and Signature of the reporting official. How to do your taxes Under certain circumstances, back pay may be a special wage payment and excluded from wages counted under the social security earnings test. How to do your taxes If you pay back pay to an employee age 61 or older, report it to the SSA in accordance with this section. How to do your taxes Read Special Wage Payments, later, for additional reporting instructions. How to do your taxes Questions If you have questions concerning back pay under a statute, call the SSA at 1-800-772-6270. How to do your taxes Exception. How to do your taxes   If you are a state or local government employer who was covered by an agreement under Section 218 of the Social Security Act before January 1, 1987, and you paid a back pay award before January 1, 1987, which you did not report to the SSA, contact your state Social Security Administrator's office. How to do your taxes Table 1. How to do your taxes Format for Report (Under Covering Letter) to Request SSA to Allocate Back Pay Under Statute Wages Employer's EIN: xx-xxxxxxx Tax Year in Which Award Payment Was Paid: 2012 (1) SSN and Employee Name (2)1 Award Amount and Period(s) (3)2,3 Other Soc. How to do your taxes Sec. How to do your taxes /Med. How to do your taxes Wages Paid In Award Year (4)3 Allocation     Soc. How to do your taxes Sec. How to do your taxes Med. How to do your taxes /MQGE Year Soc. How to do your taxes Sec. How to do your taxes Med. How to do your taxes /MQGE xxx-xx-xxxx HELEN T. How to do your taxes SMITH $100,000 1/2009 - 12/2012 $40,000 $40,000 2009 2010 2011 2012 $20,000 25,000 27,000 28,000 $20,000 25,000 27,000 28,000 xxx-xx-xxxx SAM W. How to do your taxes EVANS 30,000 7/89-12/91 -0- -0- 1989 1990 1991   6,000 12,000 12,000 xxx-xx-xxxx ROLAND S. How to do your taxes ADAMS 15,000 7/80-12/81 -0- -0- 9/80 12/80 1981 3,500 3,500 8,000   1Exclude amounts specifically designated as damages, penalties, etc. How to do your taxes  2Exclude the amount of back pay, if any, included in that amount. How to do your taxes  3For periods before January 1, 1978 (and for state and local government (Section 218) employers before January 1, 1981), show the wage amounts by calendar quarters. How to do your taxes The social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) must be shown separately FOR ALL YEARS. How to do your taxes (Wages subject ONLY to MQGE would be shown in the Medicare/MQGE column; no wages would be shown in the Soc. How to do your taxes Sec. How to do your taxes column. How to do your taxes ) For tax years 1991 and later, the social security and Medicare wages must be listed separately. How to do your taxes Explanation of examples. How to do your taxes Helen T. How to do your taxes Smith–The back pay award, excluding interest, was $100,000 for the periods 1/2009-12/2012. How to do your taxes In 2012, this employee was also paid $40,000 in other wages. How to do your taxes (Her Form W-2 for 2012 reported $110,100 for social security and $140,000 for Medicare. How to do your taxes The SSA allocation will result in adjusted posted wages of $68,000 for social security and $68,000 for Medicare for 2012. How to do your taxes ) Sam W. How to do your taxes Evans–The back pay award was $30,000 for the periods 7/89-12/91. How to do your taxes This employee was hired in 1989 and was subject to MQGE only. How to do your taxes He was no longer employed by this governmental employer in 2012. How to do your taxes (His Form W-2 for 2012 reported $30,000 for social security and $30,000 for Medicare. How to do your taxes After the SSA allocation, he will not have any net posted wages for 2012. How to do your taxes ) Roland S. How to do your taxes Adams–The back pay award was $15,000 for the periods 7/80-12/81. How to do your taxes He was no longer employed by this state and local government (Section 218) employer in 2012. How to do your taxes (His Form W-2 for 2012 reported $15,000 for social security and $15,000 for Medicare; after the SSA allocation, he will not have any net posted wages for 2012. How to do your taxes ) If the state Social Security Administrator's office needs more information, they can contact the SSA at the following address:   Social Security Administration Office of Income Security Programs Office of Earnings and Program Integrity Policy 6401 Security Boulevard 2506 OPS Baltimore, MD 21235 2. How to do your taxes Special Wage Payments A special wage payment (SWP) is an amount paid by an employer to an employee (or former employee) for services performed in a prior year. How to do your taxes Employers should report to the SSA special wage payments made to employees and former employees who are recipients of social security retirement benefits. How to do your taxes Special wage payments made to a retired employee receiving social security or to an employee who continues to work while receiving social security benefits may reduce the benefits the individual receives if not reported to the SSA. How to do your taxes Special wage payments may include (but are not limited to): Accumulated sick and vacation pay, Back pay, Bonuses, Deferred compensation, Payments because of retirement, Sales commissions, Severance pay, and Stock options. How to do your taxes Note. How to do your taxes Payments made after retirement that are part of the normal payroll cycle should not be routinely reported as special wage payments. How to do your taxes Earnings Test. How to do your taxes   Benefits paid to a social security beneficiary under full retirement age may be reduced if the beneficiary continues to work. How to do your taxes The SSA uses the information in boxes 1, 3, and 5 of Form W-2 to determine the beneficiary's current year earnings. How to do your taxes Special wage payments, which are for services performed in a prior year, will increase the current year earnings on Form W-2, which also may result in a reduction in the beneficiary's benefits. How to do your taxes If a benefit is reduced because of a special wage payment, the beneficiary must get documentation from the employer before the SSA can restore the deducted portion. How to do your taxes Therefore, employer reports of special wage payments help prevent incorrect benefit reductions. How to do your taxes Reporting Special Wage Payments Employers must report special wage payments for income tax purposes and social security and Medicare taxes in the year received. How to do your taxes Report income, social security, and/or Medicare taxes for special wage payments on Form W-2. How to do your taxes See Nonqualified Deferred Compensation and Section 457 Plans, later, for reporting nonqualified deferred compensation plan deferrals and payments on Form W-2. How to do your taxes In addition, report to the SSA special wage payments made during the reporting year to retired employees and employees who continue to work while receiving social security benefits. How to do your taxes Submit reports after the close of the tax year. How to do your taxes To avoid delays in processing, submit reports in time to reach the SSA by April 1. How to do your taxes Use one of the following reporting methods. How to do your taxes Electronic reporting. How to do your taxes   Special wage payment files can be sent electronically by logging onto Business Services Online (BSO) via the socialsecurity. How to do your taxes gov website. How to do your taxes BSO enables organizations and authorized individuals to conduct business with and submit confidential information to the Social Security Administration. How to do your taxes You must register to use this website. How to do your taxes The web address is www. How to do your taxes socialsecurity. How to do your taxes gov/bso/bsowelcome. How to do your taxes htm. How to do your taxes   Use the specifications and record layout shown in  Table 2, later. How to do your taxes Only one file at a time may be submitted. How to do your taxes If your file is large (>10MB), or you have a slow internet connection, the transmission will be faster if the file is zipped. How to do your taxes A zipped file contains a file that has been compressed to reduce its file size. How to do your taxes WinZip and PKZIP are examples of acceptable compression packages. How to do your taxes   Electronic submissions not meeting the specifications in Table 2 will be rejected. How to do your taxes Paper listing. How to do your taxes   A paper listing can be used to report special wage payments to several employees. How to do your taxes Use the format shown in Table 3, later. How to do your taxes Submit paper listings to the local SSA office nearest your place of business. How to do your taxes Visit www. How to do your taxes socialsecurity. How to do your taxes gov/locator to find a Social Security office near you. How to do your taxes Form SSA-131. How to do your taxes   Use Form SSA-131 to report special wage payments made to an employee. How to do your taxes Also use this form to report nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in box 11 of Form W-2. How to do your taxes    This image is too large to be displayed in the current screen. How to do your taxes Please click the link to view the image. How to do your taxes Publication 957 Reporting Back Pay to the Social Security Administration Instructions for Form SSA–131   EMPLOYER INSTRUCTIONS FOR COMPLETING SPECIAL WAGE PAYMENT FORM 1. How to do your taxes Provide the EIN that was used or will be used to report the employee's wages on the Form W-2. How to do your taxes 2. How to do your taxes Enter the date the employee retired. How to do your taxes Enter “Not Retired” if the employee has not retired. How to do your taxes 3. How to do your taxes Enter the date that the employee last performed services; was not expected to return to work; and was not subject to recall to render additional services. How to do your taxes This date should be the same as or earlier than the date in item “2”. How to do your taxes Enter “Not Retired” if the employee has not retired. How to do your taxes 4. How to do your taxes Enter the wages that were paid to the employee in the tax year that were for services that were performed in years prior to the tax year or that were paid on account of retirement. How to do your taxes  Examples (not all inclusive) of payments to be included: Payments in lieu of vacation that were earned in a year prior to the tax year. How to do your taxes Accumulated sick payments which were paid in a lump sum based on “retirement” as the sole condition of payment. How to do your taxes Accumulated sick payments paid at or after the date in item 3, which were earned in a year prior to the tax year. How to do your taxes Payments “on account of retirement”–dismissal, severance or termination pay paid because of retirement. How to do your taxes Bonuses which are paid pursuant to a prior contract, agreement or promise causing the employee to expect such payments regularly; or announced to induce the employee to work more steadily, rapidly or efficiently or to remain with the employer. How to do your taxes Stock Options. How to do your taxes   Do not include in item “4” payments: For annual, sick, holiday, or vacation pay if used (absence from work) prior to the date of retirement (earlier of items “2” or “3”). How to do your taxes That were reported or will be reported under “Nonqualified Plans” on the Form W-2. How to do your taxes That were deducted from the employee's wages and paid to a deferred compensation plan (e. How to do your taxes g. How to do your taxes , 401k). How to do your taxes Employees health and dental plan benefits (non-covered/non-taxable for Social Security Wages). How to do your taxes Bonuses earned and paid in the tax year. How to do your taxes 5. How to do your taxes Check whether payments listed in item 4 will be made for years after the tax year. How to do your taxes If yes, please show the amounts and years in which these will be paid, if known. How to do your taxes 6. How to do your taxes Nonqualified deferred compensation and section 457 plans only. How to do your taxes If you were unable to report nonqualified deferred compensation or section 457 plan payments and deferrals (contributions) on Form W-2 because both payments and deferrals occurred during the year, show the amount of wages earned by the employee during the tax year. How to do your taxes Generally, the wages earned will be the compensation reported in block 1 of Form W-2 less payments from a nonqualified deferred compensation (or 457) plan, but including any amounts deferred under the plan during the tax year (See IRS Publication 957). How to do your taxes Paperwork/Privacy Act Notice: This report is authorized by regulation 20 CFR 404. How to do your taxes 702. How to do your taxes The information that you provide will be used in making a determination regarding the amount of Social Security benefits payable to the above named individual. How to do your taxes While your response is voluntary, if you do not respond we may not be able to make a correct determination regarding the amount of Social Security benefits payable to the above named individual for the year in question. How to do your taxes We may also use the information you give us when we match records by computer. How to do your taxes Matching programs compare our records with those of other Federal, State, or local government agencies. How to do your taxes Many agencies may use matching programs to find or prove that a person qualifies for benefits paid by the Federal Government. How to do your taxes The law allows us to do this even if you do not agree to it. How to do your taxes Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security Offices. How to do your taxes If you want to learn more about this, contact any Social Security Office. How to do your taxes The Paperwork Reduction Act: This information collection meets the clearance requirements of 44 U. How to do your taxes S. How to do your taxes C. How to do your taxes §3507, as amended by Section 2 of the Paperwork Reduction Act of 1995. How to do your taxes You are not required to answer these questions unless we display a valid Office of Management and Budget control number. How to do your taxes We estimate that it will take you about 20 minutes to read the instructions, gather the necessary facts, and answer the questions. How to do your taxes Form SSA-131 (8-2001) EF (06-2002)   Submit Form SSA-131 to the SSA office nearest your place of business. How to do your taxes Or, the employee can submit it to the SSA office handling the claim. How to do your taxes You or the employee must submit this form before the SSA can exclude the special wage payments for purposes of the earnings test. How to do your taxes If reporting on more than one employee, complete a separate Form SSA-131 for each employee or use the paper listing format (except for reporting nonqualified and section 457 plan deferrals and payments) in Table 3. How to do your taxes Do not report payments from nonqualified deferred compensation or section 457 plans that were reported in box 11 of Form W-2. How to do your taxes Use Form SSA-131 if deferrals to and payments from nonqualified or section 457 plans occurred during the tax year. How to do your taxes Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments A nonstatutory (nonqualified) option to purchase stock which is exercised in a year after the year in which the option was earned is a special wage payment. How to do your taxes It should not count for the social security earnings test. How to do your taxes Nonstatutory (nonqualified) options exercised as special wage payments by retired employees or employees who continue to work while receiving social security benefits should be reported by employers using the above reporting methods. How to do your taxes Nonqualified Deferred Compensation and Section 457 Plans A nonqualified deferred compensation plan is a plan or arrangement established and maintained by an employer for one or more of its employees that provides for the deferral of compensation, but does not meet the requirements for a tax-qualified deferred compensation plan. How to do your taxes For social security and Medicare purposes, deferred compensation plans for employees of state and local governments (section 457 plans) are treated the same as nonqualified plans. How to do your taxes Nonqualified and section 457 plans are reported differently than other special wage payments. How to do your taxes See Reporting Amounts Deferred to Nonqualified and Section 457 Plans below for specific instructions. How to do your taxes Reporting Amounts Deferred to Nonqualified and Section 457 Plans Generally, when the related services are performed, nonqualified deferred compensation is subject to social security and Medicare tax when deferred. How to do your taxes However, if nonqualified and section 457 plans contain provisions that delay the employee's right to receive payments from the plan, a period of substantial risk of forfeiture exists. How to do your taxes The plans' deferrals, or contributions, are not subject to social security and Medicare taxes until the period of substantial risk of forfeiture ends. How to do your taxes No risk of forfeiture. How to do your taxes   If there is no risk of forfeiture, report wage amounts deferred to a nonqualified deferred compensation or section 457 plan in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. How to do your taxes Example. How to do your taxes Company X's nonqualified deferred compensation plan allows the deferral of up to $20,000 of employee salaries each year. How to do your taxes The plan has no risk of forfeiture. How to do your taxes In 2012, Employee A defers $20,000 to the plan from a total salary of $200,000. How to do your taxes Form W-2 Completion Amount Box 1 $200,000 Box 3* 110,100 Box 5 200,000 *Wage base maximum for tax year 2012 Risk of forfeiture lapses before retirement. How to do your taxes   If the substantial risk of forfeiture lapses before the employee retires, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. How to do your taxes The accumulated deferrals are reported along with any other social security and Medicare wages earned during the year. How to do your taxes   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. How to do your taxes If the employee continues working, future deferrals are social security and Medicare wages when they are earned. How to do your taxes    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. How to do your taxes Risk of forfeiture lapses at retirement. How to do your taxes   When an employee's right to a payment is contingent upon working until retirement, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, as social security and/or Medicare wages in the year of retirement. How to do your taxes Add the amount to other wages paid in that year, and enter in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. How to do your taxes   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. How to do your taxes    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. How to do your taxes Example—risk of forfeiture. How to do your taxes At the end of the risk-of-forfeiture period for Company Y's nonqualified deferred compensation plan, Employee B's accumulated deferrals, plus interest earned by the plan, are $120,000, not including B's $20,000 deferral for this year. How to do your taxes B's wages, including this year's deferred amount, are $80,000. How to do your taxes Form W-2 Completion Amount Box 1 $60,000 Box 3* 110,100 Box 5 200,000 Box 11 120,000 *Wage base maximum for tax year 2012 Reporting Payments From Nonqualified and Nongovernmental Section 457 Plans When an employee or former employee retires and begins receiving payments (distributions) from a nonqualified or nongovernmental section 457 plan, report the payments in boxes 1 and 11 of Form W-2. How to do your taxes Report payments (distributions) from a governmental section 457 plan on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. How to do your taxes Example. How to do your taxes Employee D retired from the XYZ company and began receiving social security benefits. How to do your taxes XYZ paid D a $12,000 bonus upon retirement for sales made in a prior year, and D received $25,000 in payments from XYZ's nonqualified deferred compensation plan. How to do your taxes In addition, D agreed to continue performing services for XYZ, but on a part-time basis for wages of $15,000 per year. How to do your taxes D made no deferrals to the nonqualified plan this year. How to do your taxes Form W-2 Completion Amount Box 1 $52,000 Box 3 27,000 Box 5 27,000 Box 11 25,000 Report the $12,000 bonus to the SSA using electronic reporting, a paper listing, or Form SSA-131. How to do your taxes For more information, see Reporting Special Wage Payments , earlier. How to do your taxes Reporting Payments and Deferrals in the Same Year Do not complete box 11 when payments (distributions) are made from a nonqualified plan and deferrals are reported in boxes 3 and/or 5 of Form W-2 (including current year deferrals). How to do your taxes Report to the SSA on Form SSA-131 the total amount the employee earned during the tax year. How to do your taxes Normally, the amount earned is the amount reported in box 1 of Form W-2 less payments from a nonqualified or section 457 plan, but including any amounts deferred under the plan during the tax year. How to do your taxes See Form SSA-131 and its instructions, earlier. How to do your taxes Example. How to do your taxes Employee K retired this year from Company XYZ and began receiving social security benefits. How to do your taxes During the year he earned wages of $50,000 and deferred $35,000 of the wages into the company's nonqualified deferred compensation plan. How to do your taxes K also received $75,000 in payments from the company's nonqualified plan. How to do your taxes Form W-2 Completion Amount Special Wage Payment $75,000 Wages 50,000 Minus: deferral 35,000 Total reported in Box 1 $90,000     Wages including deferral reported in  Boxes 3 and 5 $50,000     Leave Box 11 blank. How to do your taxes File Form SSA-131 -0-     Form SSA-131 Completion Amount from Box 1 of Form W-2 $90,000 Minus: payments from a nonqualified plan 75,000 Plus: amounts deferred into the plan during the year 35,000 Total wages earned for purposes of Form SSA-131 (item 6) $50,000 Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) Plans It is not necessary to show amounts deferred during the year under an NQDC plan subject to section 409A. How to do your taxes If you report section 409A deferrals, show the amount in box 12 of Form W-2 using code Y. How to do your taxes For more information, see Notice 2008-115, 2008-52 I. How to do your taxes R. How to do your taxes B. How to do your taxes 1367, available at www. How to do your taxes irs. How to do your taxes gov/irb/2008-52_IRB/ar10. How to do your taxes html. How to do your taxes Special reporting rules apply when an NQDC plan is not compliant with section 409A (when there has been a “plan failure”). How to do your taxes Income included under section 409A from an NQDC plan is reported in box 1 and box 12 of Form W-2 using code Z. How to do your taxes See Notice 2008-115. How to do your taxes The following examples use small dollar amounts for illustrative purposes. How to do your taxes However, the amount reported in box 3 of Form W-2 is always limited by the social security earnings wage base (for example, $110,100 for 2012). How to do your taxes The term “vested” in the following examples means that the amount deferred is not subject to a substantial risk of forfeiture. How to do your taxes Conversely, the term “not vested” means that the amount deferred is subject to a substantial risk of forfeiture. How to do your taxes The examples assume that the NQDC plan is in compliance with section 409A, and that amounts deferred under the plan are not includible in gross income as they are deferred. How to do your taxes For purposes of the examples, it is assumed that the regular pay of the employee is remuneration for employment and wages for employment tax purposes except to the extent the deferral of a portion of the regular pay results in a reduction in wages. How to do your taxes Example 1: Deferral that is immediately vested (no substantial risk of forfeiture) with no distributions and no vesting of prior-year deferrals. How to do your taxes For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into her employer’s NQDC plan. How to do your taxes The deferral of $20 was vested upon deferral and there was an employer match of $10 under the plan, which was also vested. How to do your taxes Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10. How to do your taxes Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 vested deferral) $180 Box 3 ($200 Regular pay plus $10 Employer match, vested) 210 Box 5 ($200 Regular pay plus $10 Employer match, vested) 210 Box 11 -0- Example 2: Deferral with delayed vesting (substantial risk of forfeiture) of employee and employer portions (no distributions and no vesting of prior-year deferrals). How to do your taxes For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. How to do your taxes The deferral of $20 was not vested upon deferral, and there was an employer match of $10 under the plan, which was also not vested. How to do your taxes Regular pay = $200; Deferral, not vested = $20; Employer match, not vested = $10. How to do your taxes Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, not vested) $180 Box 3 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 5 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 11 -0- Example 3: Deferral that is immediately vested with prior-year deferrals and investment earnings on the prior-year deferrals that are now vesting (no distributions). How to do your taxes For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. How to do your taxes The deferral of $20 was vested upon deferral. How to do your taxes During the year, $100 of prior-year deferrals and $15 of investment earnings on the $100 of prior-year deferrals became vested. How to do your taxes Regular pay = $200; Deferral, vested = $20; Vesting of prior-year deferrals = $100; Vesting of investment earnings on $100 of prior-year deferral = $15. How to do your taxes Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, vested) $180 Box 3 ($200 Regular pay plus $100 vested prior-year deferral plus $15 earnings on deferral) 315 Box 5 ($200 Regular pay plus $100 vested prior-year deferral plus $15 vested investment earnings on prior year deferral) 315 Box 11 ($100 vested prior-year deferral plus $15 earnings) 115 Example 4: No deferrals but there are distributions (no vesting of prior-year deferrals). How to do your taxes For the year, the employee’s regular pay was $100, and the employee deferred no pay into the employer’s NQDC plan. How to do your taxes There was no vesting of prior-year deferrals under the plan. How to do your taxes During the year, there were total distributions of $50 from the plan to the employee. How to do your taxes Regular pay = $100; Distribution = $50. How to do your taxes Form W-2 Completion Amount Box 1 ($100 Regular pay plus $50 Distribution) $150 Box 3 ($100 Regular pay ) 100 Box 5 ($100 Regular pay) 100 Box 11 ($50 Distribution) 50 Special rule for box 11 of Form W-2 (distributions and deferral in the same year). How to do your taxes   If, in the same year, there are NQDC distributions and there are deferrals that are reportable in boxes 3 and/or 5 (current or prior-year deferrals) of Form W-2, do not complete box 11. How to do your taxes Instead, report on Form SSA-131 the total amount the employee earned during the year. How to do your taxes * Submit the SSA-131 to the nearest SSA office or give it to the employee. How to do your taxes   *Generally, the amount earned by the employee during the tax year for purposes of item 6 of Form SSA-131 is the amount reported in box 1 of Form W-2 plus current-year deferrals that are vested (employee and employer portions) less distributions. How to do your taxes Do not consider prior-year deferrals that are vesting in the current year. How to do your taxes If there was a plan failure, the box 1 amount in this calculation should be as if there were no plan failure. How to do your taxes Example 5: Deferral that is immediately vested and there are distributions (no vesting of prior-year deferrals). How to do your taxes For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. How to do your taxes There was also an employer match of $10. How to do your taxes The deferral and employer match were vested upon deferral. How to do your taxes There was no vesting of prior-year deferrals under the plan. How to do your taxes During the year, there were total distributions of $50 from the plan to the employee. How to do your taxes Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10; Distribution = $50. How to do your taxes Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, vested) $230 Boxes 3 and 5 ($200 Regular pay plus $10 vested employer match) 210 Leave Box 11 blank. How to do your taxes File Form SSA-131 -0-     Form SSA-131 Completion Item 6 - amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $30 vested current year employee deferral and employer match) $210 Example 6: Deferral with delayed vesting and there are distributions (no vesting of prior-year deferrals). How to do your taxes For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. How to do your taxes The deferral was not vested upon deferral. How to do your taxes There was no vesting of prior-year deferrals under the plan. How to do your taxes During the year, there were total distributions of $50 from the plan to the employee. How to do your taxes Regular pay = $200; Deferral, not vested = $20; Distribution = $50. How to do your taxes Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay minus $20 deferral that is not vested) 180 Box 11 ($50 Distribution). How to do your taxes 50 Example 7: Deferral that is immediately vested and there are distributions (also vesting of prior-year deferrals and earnings on those prior-year deferrals). How to do your taxes For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. How to do your taxes The deferral was vested upon deferral. How to do your taxes There was vesting of $100 of prior-year deferrals and $15 of earnings on the $100 prior-year deferral under the plan. How to do your taxes During the year, there were total distributions of $50 from the plan to the employee. How to do your taxes Regular pay = $200; Deferral, vested = $20; Distribution = $50; Vesting of prior-year deferrals ($100) and earnings on those prior-year deferrals ($15) = $115. How to do your taxes Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 vested deferral $230 Boxes 3 and 5 ($200 Regular pay Plus $115 vested prior deferral (with vested earnings on the deferral)) 315 Leave Box 11 blank. How to do your taxes File Form SSA-131 -0-     Form SSA-131 Completion Item 6, amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $20 vested current year deferral) $200 Example 8: Deferral with delayed vesting and there are distributions (vesting of prior-year deferrals, including employer matches, and earnings on those deferrals). How to do your taxes For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. How to do your taxes The deferral was not vested upon deferral. How to do your taxes There was also vesting of prior-year deferrals and employer matches and earnings on these amounts under the plan ($115). How to do your taxes During the year, there were total distributions of $50 from the plan to the employee. How to do your taxes Regular pay = $200; Deferral, not vested = $20; Distribution = $50; Vesting of prior-year deferrals and employer match = $100 plus earnings on that $100 of $15. How to do your taxes Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay plus $115 vested prior-year deferral and prior year employer match and earning on the prior year amounts minus $20 deferral that is not vested) 295 Leave Box 11 blank. How to do your taxes File Form SSA-131 -0-     Form SSA-131 Completion Item 6 ($230 Amount from Box 1 of Form W-2 minus $50 Distribution) $180 Table 2. How to do your taxes Specifications for Electronic Reporting of Special Wage Payments Record Position  Field Size   Description Start End 1 3 3 Record Type—must include only the capital letters “SWP” 4 12 9 SSN—must be numeric and may not be all zeros 13 27 15 Last Name—all capitals and no punctuation; may have blanks on right only 28 38 11 First Name—all capitals and no punctuation; may have blanks on right only 39 39 1 Middle Initial—must be either a capital letter or blank 40 48 9 EIN—must be numeric and may not be all zeros 49 59 11 Payment—must be numeric; may not be all zeros; last two digits on right are assumed to be cents; no period or dollar sign 60 63 4 Payment Year—must be only a four-digit year 64 66 3 SSA Office Code—must be numeric and may be all zeros 67 67 1 Payment Type Code—must be the capital letter “T” 68 117 50 Filler  The record format is a fixed length of 117. How to do your taxes  The file format is ASCII. How to do your taxes  Submit only one file at a time. How to do your taxes   Table 3. How to do your taxes Sample—Paper Listing for Reporting Special Wage Payments to Several Employees Report of Special Wage PaymentsTax Year: Page of A. How to do your taxes Employer Name: EIN:   Address: Contact Name:     Phone: ( )   . How to do your taxes 1) B. How to do your taxes Employee Name: (Last) (First) (MI)   C. How to do your taxes SSN: D. How to do your taxes SWP:$ E. How to do your taxes Type: Other: 2) B. How to do your taxes Employee Name: (Last) (First) (MI)   C. How to do your taxes SSN: D. How to do your taxes SWP:$ E. How to do your taxes Type: Other: 3) B. How to do your taxes Employee Name: (Last) (First) (MI)   C. How to do your taxes SSN: D. How to do your taxes SWP:$ E. How to do your taxes Type: Other: 4) B. How to do your taxes Employee Name: (Last) (First) (MI)   C. How to do your taxes SSN: D. How to do your taxes SWP:$ E. How to do your taxes Type: Other: 5) B. How to do your taxes Employee Name: (Last) (First) (MI)   C. How to do your taxes SSN: D. How to do your taxes SWP:$ E. How to do your taxes Type: Other:     INSTRUCTIONS:   Enter tax year and page number. How to do your taxes   A. How to do your taxes Employer name, employer identification number (EIN), address, the name of a contact person, and a phone number where the contact person can be reached during normal business hours. How to do your taxes   B. How to do your taxes Employee's name. How to do your taxes   C. How to do your taxes Employee's social security number (SSN). How to do your taxes   D. How to do your taxes Total amount of special wage payments made to the employee. How to do your taxes   E. How to do your taxes Type of special wage payment from the following list: (1) Vacation Pay, (2) Sick Pay, (3) Severance Pay,  (4) Bonus, (5) Deferred Compensation, (6) Stock Options, and (7) Other—Please explain. How to do your taxes   Do not use a paper listing for nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in block 11 of Form W-2. How to do your taxes (Get Form SSA-131. How to do your taxes )                 Prev  Up  Next   Home   More Online Publications
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Tax Information for Other Non-Profits

Life Cycle of an Exempt Organization
Links to helpful information about points of intersection between tax-exempt organizations and the IRS, including access to explanatory information and forms that an organization may need to file with the IRS.

Requirements for Exemption
A brief description of the requirements for exemption under the Internal Revenue Code, other than section 501(c)(3).

Application for recognition of exemption
Procedures for applying for exemption under IRC section 501(c).

Exempt Organizations - Required Filings
Federal annual tax filings for tax-exempt organizations.

Solicitation Notice
A brief description of the solicitation notice requirements under IRC section 6113.

Proxy tax: Tax-exempt organization fails to notify members that dues are nondeductible lobbying/political expenditures
A description of the notice, reporting, and tax requirements for certain tax-exempt organizations that incur nondeductible lobbying and political expenditures.

Employment Taxes for Exempt Organizations
Links to information about employment taxes for tax-exempt organizations.

Recent Items of Interest to Other Non-Profit Organizations
Recent items of interest to nonprofit organizations other than charitable organizations.

Tax-Exempt Organizations and Political Campaign Intervention
IRS materials on political campaign intervention by tax-exempt organizations.

Unrelated Business Income Tax
Unrelated business income tax requirements for tax-exempt organizations.

Publication 4221-NC, Compliance Guide for Tax-Exempt Organizations (Other than Charities)
A publication discussing activities that could jeopardize a tax-exempt organization's exempt status and identifying general compliance requirements on recordkeeping, reporting, and disclosure for exempt organizations.

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The How To Do Your Taxes

How to do your taxes 34. How to do your taxes   Child Tax Credit Table of Contents Introduction Useful Items - You may want to see: Qualifying Child Amount of CreditLimits on the Credit Claiming the Credit Additional Child Tax Credit Completing Schedule 8812 (Form 1040A or 1040)Part I Parts II–IV Introduction The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children. How to do your taxes The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child tax credit. How to do your taxes This chapter explains the following. How to do your taxes Who is a qualifying child. How to do your taxes The amount of the credit. How to do your taxes How to claim the credit. How to do your taxes The child tax credit and the additional child tax credit should not be confused with the child and dependent care credit discussed in chapter 32. How to do your taxes If you have no tax. How to do your taxes   Credits, such as the child tax credit or the credit for child and dependent care expenses, are used to reduce tax. How to do your taxes If your tax on Form 1040, line 46, or Form 1040A, line 28, is zero, do not figure the child tax credit because there is no tax to reduce. How to do your taxes However, you may qualify for the additional child tax credit on line 65 (Form 1040) or line 39 (Form 1040A). How to do your taxes Useful Items - You may want to see: Publication 972 Child Tax Credit Form (and Instructions) Schedule 8812 (Form 1040A or 1040) Child Tax Credit W-4 Employee's Withholding Allowance Certificate Qualifying Child A qualifying child for purposes of the child tax credit is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was under age 17 at the end of 2013, Did not provide over half of his or her own support for 2013, Lived with you for more than half of 2013 (see Exceptions to time lived with you , later), Is claimed as a dependent on your return, Does not file a joint return for the year (or files it only as a claim for refund), and Was a U. How to do your taxes S. How to do your taxes citizen, a U. How to do your taxes S. How to do your taxes national, or a resident of the United States. How to do your taxes If the child was adopted, see Adopted child , later. How to do your taxes For each qualifying child you must check the box on Form 1040 or Form 1040A, line 6c. How to do your taxes Example 1. How to do your taxes Your son turned 17 on December 30, 2013. How to do your taxes He is a citizen of the United States and you claimed him as a dependent on your return. How to do your taxes He is not a qualifying child for the child tax credit because he was not under age 17 at the end of 2013. How to do your taxes Example 2. How to do your taxes Your daughter turned 8 years old in 2013. How to do your taxes She is not a citizen of the United States, has an ITIN, and lived in Mexico all of 2013. How to do your taxes She is not a qualifying child for the child tax credit because she was not a resident of the United States for 2013. How to do your taxes Filers who have certain child dependents with an Individual Taxpayer Identification Number (ITIN). How to do your taxes   If you are claiming a child tax credit or additional child tax credit for a child you identified on your tax return with an ITIN instead of an SSN, you must complete Part I of Schedule 8812 (Form 1040A or 1040). How to do your taxes   Although a child may be your dependent, you may only claim a child tax credit or additional child tax credit for a dependent who is a citizen, national, or resident of the United States. How to do your taxes To be treated as a resident of the United States, a child generally will need to meet the requirements of the substantial presence test. How to do your taxes For more information about the substantial presence test, see Publication 519, U. How to do your taxes S. How to do your taxes Tax Guide for Aliens. How to do your taxes Adopted child. How to do your taxes   An adopted child is always treated as your own child. How to do your taxes An adopted child includes a child lawfully placed with you for legal adoption. How to do your taxes   If you are a U. How to do your taxes S. How to do your taxes citizen or U. How to do your taxes S. How to do your taxes national and your adopted child lived with you all year as a member of your household in 2013, that child meets condition (7) above to be a qualifying child for the child tax credit. How to do your taxes Exceptions to time lived with you. How to do your taxes   A child is considered to have lived with you for more than half of 2013 if the child was born or died in 2013 and your home was this child's home for more than half the time he or she was alive. How to do your taxes Temporary absences by you or the child for special circumstances, such as for school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you. How to do your taxes   There are also exceptions for kidnapped children and children of divorced or separated parents. How to do your taxes For details, see Residency Test in chapter 3. How to do your taxes Qualifying child of more than one person. How to do your taxes   A special rule applies if your qualifying child is the qualifying child of more than one person. How to do your taxes For details, see Special Rule for Qualifying Child of More Than One Person in chapter 3. How to do your taxes Amount of Credit The maximum amount you can claim for the credit is $1,000 for each qualifying child. How to do your taxes Limits on the Credit You must reduce your child tax credit if either (1) or (2) applies. How to do your taxes The amount on Form 1040, line 46, or Form 1040A, line 28, is less than the credit. How to do your taxes If this amount is zero, you cannot take this credit because there is no tax to reduce. How to do your taxes But you may be able to take the additional child tax credit. How to do your taxes See Additional Child Tax Credit , later. How to do your taxes Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status. How to do your taxes Married filing jointly - $110,000. How to do your taxes Single, head of household, or qualifying widow(er) - $75,000. How to do your taxes Married filing separately - $55,000. How to do your taxes Modified AGI. How to do your taxes   For purposes of the child tax credit, your modified AGI is your AGI plus the following amounts that may apply to you. How to do your taxes Any amount excluded from income because of the exclusion of income from  Puerto Rico. How to do your taxes On the dotted line next to Form 1040, line 38, enter the amount excluded and identify it as “EPRI. How to do your taxes ” Also attach a copy of any Form(s) 499R-2/W-2PR to your return. How to do your taxes Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income. How to do your taxes Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion. How to do your taxes Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa. How to do your taxes   If you do not have any of the above, your modified AGI is the same as your AGI. How to do your taxes AGI. How to do your taxes   Your AGI is the amount on Form 1040, line 38, or Form 1040A, line 22. How to do your taxes Claiming the Credit To claim the child tax credit, you must file Form 1040 or Form 1040A. How to do your taxes You cannot claim the child tax credit on Form 1040EZ. How to do your taxes You must provide the name and identification number (usually a social security number) on your tax return for each qualifying child. How to do your taxes If you claim the child tax credit with a child identified by an ITIN, you must also file Schedule 8812. How to do your taxes To figure your credit, first review the Child Tax Credit Worksheet in your Form 1040 or 1040A instructions. How to do your taxes If you are instructed to use Publication 972, you may not use the worksheet in your tax return instructions; instead, you must use Publication 972 to figure the credit. How to do your taxes If you are not instructed to use Publication 972, you may use the Child Tax Credit Worksheet in your Form 1040 or 1040A instructions or Publication 972 to figure the credit. How to do your taxes Additional Child Tax Credit This credit is for certain individuals who get less than the full amount of the child tax credit. How to do your taxes The additional child tax credit may give you a refund even if you do not owe any tax. How to do your taxes How to claim the additional child tax credit. How to do your taxes   To claim the additional child tax credit, follow the steps below. How to do your taxes Make sure you figured the amount, if any, of your child tax credit. How to do your taxes See Claiming the Credit , earlier. How to do your taxes If you answered “Yes” on line 9 or line 10 of the Child Tax Credit Worksheet in the Form 1040 or Form 1040A instructions, or line 13 of the Child Tax Credit Worksheet in Publication 972, use Parts II through IV of Schedule 8812 to see if you can take the additional child tax credit. How to do your taxes If you have an additional child tax credit on line 13 of Schedule 8812, carry it to Form 1040, line 65, or Form 1040A, line 39. How to do your taxes Completing Schedule 8812 (Form 1040A or 1040) Schedule 8812 contains four parts, but can really be thought of as two sections. How to do your taxes Part I is distinct and separate from Parts II–IV. How to do your taxes If all your children are identified by social security numbers or IRS adoption taxpayer identification numbers and you are not claiming the additional child tax credit, you do not need to complete or attach Schedule 8812 to your tax return. How to do your taxes Part I You only need to complete Part I if you are claiming the child tax credit for a child identified by an IRS individual taxpayer identification number (ITIN). How to do your taxes When completing Part I, only answer the questions with regard to children identified by an ITIN; you do not need to complete Part I of Schedule 8812 for any child that is identified by a social security number (SSN) or an IRS adoption taxpayer identification number (ATIN). How to do your taxes If all the children for whom you checked the box in column 4 of line 6c on your Form 1040 or Form 1040A are identified by an SSN or an ATIN, you do not need to complete Part I of Schedule 8812. How to do your taxes Parts II–IV Parts II–IV help you figure your additional child tax credit. How to do your taxes Generally, you should only complete Parts II–IV if you are instructed to do so after completing the Child Tax Credit Worksheet in your tax return instructions or Publication 972. How to do your taxes See How to claim the additional child tax credit , earlier. How to do your taxes Prev  Up  Next   Home   More Online Publications