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State Income Taxes More:label_state_20income_20taxes More:taxes

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State Income Taxes More:label_state_20income_20taxes More:taxes

State income taxes more:label_state_20income_20taxes more:taxes 6. State income taxes more:label_state_20income_20taxes more:taxes   Tip Income Table of Contents Introduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. State income taxes more:label_state_20income_20taxes more:taxes Reporting Tips to Your EmployerElectronic tip statement. State income taxes more:label_state_20income_20taxes more:taxes Final report. State income taxes more:label_state_20income_20taxes more:taxes Reporting Tips on Your Tax Return Allocated Tips Introduction This chapter is for employees who receive tips. State income taxes more:label_state_20income_20taxes more:taxes All tips you receive are income and are subject to federal income tax. State income taxes more:label_state_20income_20taxes more:taxes You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. State income taxes more:label_state_20income_20taxes more:taxes The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. State income taxes more:label_state_20income_20taxes more:taxes Reporting your tip income correctly is not difficult. State income taxes more:label_state_20income_20taxes more:taxes You must do three things. State income taxes more:label_state_20income_20taxes more:taxes Keep a daily tip record. State income taxes more:label_state_20income_20taxes more:taxes Report tips to your employer. State income taxes more:label_state_20income_20taxes more:taxes Report all your tips on your income tax return. State income taxes more:label_state_20income_20taxes more:taxes  This chapter will explain these three things and show you what to do on your tax return if you have not done the first two. State income taxes more:label_state_20income_20taxes more:taxes This chapter will also show you how to treat allocated tips. State income taxes more:label_state_20income_20taxes more:taxes For information on special tip programs and agreements, see Publication 531. State income taxes more:label_state_20income_20taxes more:taxes Useful Items - You may want to see: Publication 531 Reporting Tip Income 1244 Employee's Daily Record of Tips and Report to Employer Form (and Instructions) 4137 Social Security and Medicare Tax on Unreported Tip Income 4070 Employee's Report of Tips to Employer Keeping a Daily Tip Record Why keep a daily tip record. State income taxes more:label_state_20income_20taxes more:taxes   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. State income taxes more:label_state_20income_20taxes more:taxes How to keep a daily tip record. State income taxes more:label_state_20income_20taxes more:taxes   There are two ways to keep a daily tip record. State income taxes more:label_state_20income_20taxes more:taxes You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. State income taxes more:label_state_20income_20taxes more:taxes You should keep your daily tip record with your tax or other personal records. State income taxes more:label_state_20income_20taxes more:taxes You must keep your records for as long as they are important for administration of the federal tax law. State income taxes more:label_state_20income_20taxes more:taxes For information on how long to keep records, see How long to keep records in chapter 1. State income taxes more:label_state_20income_20taxes more:taxes    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. State income taxes more:label_state_20income_20taxes more:taxes To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244. State income taxes more:label_state_20income_20taxes more:taxes Also, Publication 1244 is available online at www. State income taxes more:label_state_20income_20taxes more:taxes irs. State income taxes more:label_state_20income_20taxes more:taxes gov/pub/irs-pdf/p1244. State income taxes more:label_state_20income_20taxes more:taxes pdf. State income taxes more:label_state_20income_20taxes more:taxes Publication 1244 includes a 1-year supply of Form 4070A. State income taxes more:label_state_20income_20taxes more:taxes Each day, write in the information asked for on the form. State income taxes more:label_state_20income_20taxes more:taxes   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. State income taxes more:label_state_20income_20taxes more:taxes Although you do not report these tips to your employer, you must report them on your tax return. State income taxes more:label_state_20income_20taxes more:taxes   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). State income taxes more:label_state_20income_20taxes more:taxes Then, each workday, write the date and the following information. State income taxes more:label_state_20income_20taxes more:taxes Cash tips you get directly from customers or from other employees. State income taxes more:label_state_20income_20taxes more:taxes Tips from credit and debit card charge customers that your employer pays you. State income taxes more:label_state_20income_20taxes more:taxes The value of any noncash tips you get, such as tickets, passes, or other items of value. State income taxes more:label_state_20income_20taxes more:taxes The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. State income taxes more:label_state_20income_20taxes more:taxes Electronic tip record. State income taxes more:label_state_20income_20taxes more:taxes   You can use an electronic system provided by your employer to record your daily tips. State income taxes more:label_state_20income_20taxes more:taxes If you do, you must receive and keep a paper copy of this record. State income taxes more:label_state_20income_20taxes more:taxes Service charges. State income taxes more:label_state_20income_20taxes more:taxes    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. State income taxes more:label_state_20income_20taxes more:taxes This is part of your wages, not a tip. State income taxes more:label_state_20income_20taxes more:taxes See examples below. State income taxes more:label_state_20income_20taxes more:taxes Example 1. State income taxes more:label_state_20income_20taxes more:taxes Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. State income taxes more:label_state_20income_20taxes more:taxes Jane’s bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. State income taxes more:label_state_20income_20taxes more:taxes Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. State income taxes more:label_state_20income_20taxes more:taxes Do not include the 18% charge in your tip diary. State income taxes more:label_state_20income_20taxes more:taxes Service charges that are paid to you are considered wages, not tips. State income taxes more:label_state_20income_20taxes more:taxes Example 2. State income taxes more:label_state_20income_20taxes more:taxes Good Food Restaurant also includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. State income taxes more:label_state_20income_20taxes more:taxes David’s bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of his charges for food and beverages at the bottom of the bill beneath the signature line. State income taxes more:label_state_20income_20taxes more:taxes Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. State income taxes more:label_state_20income_20taxes more:taxes Be sure to include this amount in your tip diary. State income taxes more:label_state_20income_20taxes more:taxes Reporting Tips to Your Employer Why report tips to your employer. State income taxes more:label_state_20income_20taxes more:taxes   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). State income taxes more:label_state_20income_20taxes more:taxes What tips to report. State income taxes more:label_state_20income_20taxes more:taxes   Report to your employer only cash, check, and debit and credit card tips you receive. State income taxes more:label_state_20income_20taxes more:taxes   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. State income taxes more:label_state_20income_20taxes more:taxes   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. State income taxes more:label_state_20income_20taxes more:taxes Do not report to your employer any portion of the tips you receive that you pass on to other employees. State income taxes more:label_state_20income_20taxes more:taxes However, you must report tips you receive from other employees. State income taxes more:label_state_20income_20taxes more:taxes    Do not report the value of any noncash tips, such as tickets or passes, to your employer. State income taxes more:label_state_20income_20taxes more:taxes You do not pay social security, Medicare, Additional Medicare or railroad retirement taxes on these tips. State income taxes more:label_state_20income_20taxes more:taxes How to report. State income taxes more:label_state_20income_20taxes more:taxes    If your employer does not give you any other way to report tips, you can use Form 4070. State income taxes more:label_state_20income_20taxes more:taxes Fill in the information asked for on the form, sign and date the form, and give it to your employer. State income taxes more:label_state_20income_20taxes more:taxes To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. State income taxes more:label_state_20income_20taxes more:taxes   If you do not use Form 4070, give your employer a statement with the following information. State income taxes more:label_state_20income_20taxes more:taxes Your name, address, and social security number. State income taxes more:label_state_20income_20taxes more:taxes Your employer's name, address, and business name (if it is different from your employer's name). State income taxes more:label_state_20income_20taxes more:taxes The month (or the dates of any shorter period) in which you received tips. State income taxes more:label_state_20income_20taxes more:taxes The total tips required to be reported for that period. State income taxes more:label_state_20income_20taxes more:taxes You must sign and date the statement. State income taxes more:label_state_20income_20taxes more:taxes Be sure to keep a copy with your tax or other personal records. State income taxes more:label_state_20income_20taxes more:taxes   Your employer may require you to report your tips more than once a month. State income taxes more:label_state_20income_20taxes more:taxes However, the statement cannot cover a period of more than 1 calendar month. State income taxes more:label_state_20income_20taxes more:taxes Electronic tip statement. State income taxes more:label_state_20income_20taxes more:taxes   Your employer can have you furnish your tip statements electronically. State income taxes more:label_state_20income_20taxes more:taxes When to report. State income taxes more:label_state_20income_20taxes more:taxes   Give your report for each month to your employer by the 10th of the next month. State income taxes more:label_state_20income_20taxes more:taxes If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. State income taxes more:label_state_20income_20taxes more:taxes Example. State income taxes more:label_state_20income_20taxes more:taxes You must report your tips received in September 2014 by October 10, 2014. State income taxes more:label_state_20income_20taxes more:taxes Final report. State income taxes more:label_state_20income_20taxes more:taxes   If your employment ends during the month, you can report your tips when your employment ends. State income taxes more:label_state_20income_20taxes more:taxes Penalty for not reporting tips. State income taxes more:label_state_20income_20taxes more:taxes   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, and Additional Medicare taxes or railroad retirement tax you owe on the unreported tips. State income taxes more:label_state_20income_20taxes more:taxes (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. State income taxes more:label_state_20income_20taxes more:taxes ) The penalty amount is in addition to the taxes you owe. State income taxes more:label_state_20income_20taxes more:taxes   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. State income taxes more:label_state_20income_20taxes more:taxes To do so, attach a statement to your return explaining why you did not report them. State income taxes more:label_state_20income_20taxes more:taxes Giving your employer money for taxes. State income taxes more:label_state_20income_20taxes more:taxes   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. State income taxes more:label_state_20income_20taxes more:taxes If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. State income taxes more:label_state_20income_20taxes more:taxes   If you do not give your employer enough money, your employer will apply your regular pay and any money you give in the following order. State income taxes more:label_state_20income_20taxes more:taxes All taxes on your regular pay. State income taxes more:label_state_20income_20taxes more:taxes Social security, Medicare, and Additional Medicare taxes or railroad retirement taxes on your reported tips. State income taxes more:label_state_20income_20taxes more:taxes Federal, state, and local income taxes on your reported tips. State income taxes more:label_state_20income_20taxes more:taxes    Any taxes that remain unpaid can be collected by your employer from your next paycheck. State income taxes more:label_state_20income_20taxes more:taxes If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. State income taxes more:label_state_20income_20taxes more:taxes See Publication 505, Tax Withholding and Estimated Tax, for more information. State income taxes more:label_state_20income_20taxes more:taxes    Uncollected taxes. State income taxes more:label_state_20income_20taxes more:taxes You must report on your tax return any social security and Medicare taxes or railroad retirement tax that remained uncollected at the end of 2013. State income taxes more:label_state_20income_20taxes more:taxes These uncollected taxes will be shown on your 2013 Form W-2. State income taxes more:label_state_20income_20taxes more:taxes See Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. State income taxes more:label_state_20income_20taxes more:taxes Reporting Tips on Your Tax Return How to report tips. State income taxes more:label_state_20income_20taxes more:taxes    Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1. State income taxes more:label_state_20income_20taxes more:taxes What tips to report. State income taxes more:label_state_20income_20taxes more:taxes   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. State income taxes more:label_state_20income_20taxes more:taxes Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. State income taxes more:label_state_20income_20taxes more:taxes Add to the amount in box 1 only the tips you did not report to your employer. State income taxes more:label_state_20income_20taxes more:taxes    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. State income taxes more:label_state_20income_20taxes more:taxes    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. State income taxes more:label_state_20income_20taxes more:taxes   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. State income taxes more:label_state_20income_20taxes more:taxes Cash and charge tips you received that totaled less than $20 for any month. State income taxes more:label_state_20income_20taxes more:taxes The value of noncash tips, such as tickets, passes, or other items of value. State income taxes more:label_state_20income_20taxes more:taxes Example. State income taxes more:label_state_20income_20taxes more:taxes Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. State income taxes more:label_state_20income_20taxes more:taxes Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. State income taxes more:label_state_20income_20taxes more:taxes He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. State income taxes more:label_state_20income_20taxes more:taxes Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages plus $7,000 reported tips) in box 1. State income taxes more:label_state_20income_20taxes more:taxes He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. State income taxes more:label_state_20income_20taxes more:taxes Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. State income taxes more:label_state_20income_20taxes more:taxes    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. State income taxes more:label_state_20income_20taxes more:taxes To report these taxes, you must file a return even if you would not otherwise have to file. State income taxes more:label_state_20income_20taxes more:taxes You must use Form 1040. State income taxes more:label_state_20income_20taxes more:taxes (You cannot file Form 1040EZ or Form 1040A. State income taxes more:label_state_20income_20taxes more:taxes )    Use Form 4137 to figure social security and Medicare taxes. State income taxes more:label_state_20income_20taxes more:taxes Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. State income taxes more:label_state_20income_20taxes more:taxes Use Form 8959 to figure Additional Medicare Tax. State income taxes more:label_state_20income_20taxes more:taxes    If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. State income taxes more:label_state_20income_20taxes more:taxes To get railroad retirement credit, you must report tips to your employer. State income taxes more:label_state_20income_20taxes more:taxes Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer. State income taxes more:label_state_20income_20taxes more:taxes   You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. State income taxes more:label_state_20income_20taxes more:taxes For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. State income taxes more:label_state_20income_20taxes more:taxes   If your employer could not collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). State income taxes more:label_state_20income_20taxes more:taxes You must report these amounts as additional tax on your return. State income taxes more:label_state_20income_20taxes more:taxes Unlike the uncollected portion of the regular (1. State income taxes more:label_state_20income_20taxes more:taxes 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported in box 12 of Form W-2 with code B. State income taxes more:label_state_20income_20taxes more:taxes    To report these uncollected taxes, you must file a return even if you would not otherwise have to file. State income taxes more:label_state_20income_20taxes more:taxes You must report these taxes on Form 1040, line 60. State income taxes more:label_state_20income_20taxes more:taxes See the instructions for Form 1040, line 60. State income taxes more:label_state_20income_20taxes more:taxes (You cannot file Form 1040EZ or Form 1040A. State income taxes more:label_state_20income_20taxes more:taxes ) Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. State income taxes more:label_state_20income_20taxes more:taxes They are not included in box 1 with your wages and reported tips. State income taxes more:label_state_20income_20taxes more:taxes If box 8 is blank, this discussion does not apply to you. State income taxes more:label_state_20income_20taxes more:taxes What are allocated tips. State income taxes more:label_state_20income_20taxes more:taxes   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. State income taxes more:label_state_20income_20taxes more:taxes Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. State income taxes more:label_state_20income_20taxes more:taxes No income, social security, Medicare, Additional Medicare or railroad retirement taxes are withheld on allocated tips. State income taxes more:label_state_20income_20taxes more:taxes How were your allocated tips figured. State income taxes more:label_state_20income_20taxes more:taxes   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). State income taxes more:label_state_20income_20taxes more:taxes Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. State income taxes more:label_state_20income_20taxes more:taxes For information about the exact allocation method used, ask your employer. State income taxes more:label_state_20income_20taxes more:taxes Must you report your allocated tips on your tax return. State income taxes more:label_state_20income_20taxes more:taxes   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. State income taxes more:label_state_20income_20taxes more:taxes Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. State income taxes more:label_state_20income_20taxes more:taxes Add to the amount in box 1 only the tips you did not report to your employer. State income taxes more:label_state_20income_20taxes more:taxes This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated figures. State income taxes more:label_state_20income_20taxes more:taxes   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. State income taxes more:label_state_20income_20taxes more:taxes How to report allocated tips. State income taxes more:label_state_20income_20taxes more:taxes   Report the amount in box 1 and the allocated tips in box 8 of your Form(s) W-2 as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. State income taxes more:label_state_20income_20taxes more:taxes (You cannot file Form 1040A or Form 1040EZ when you have allocated tips. State income taxes more:label_state_20income_20taxes more:taxes )    Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. State income taxes more:label_state_20income_20taxes more:taxes Complete Form 4137, and include the allocated tips on line 1 of the form. State income taxes more:label_state_20income_20taxes more:taxes See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. 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The State Income Taxes More:label_state_20income_20taxes More:taxes

State income taxes more:label_state_20income_20taxes more:taxes 3. State income taxes more:label_state_20income_20taxes more:taxes   Environmental Taxes Table of Contents Oil Spill Liability Tax ODCs Imported Taxable Products Floor Stocks Tax Environmental taxes are imposed on crude oil and petroleum products (oil spill liability), the sale or use of ozone-depleting chemicals (ODCs), and imported products containing or manufactured with ODCs. State income taxes more:label_state_20income_20taxes more:taxes In addition, a floor stocks tax is imposed on ODCs held on January 1 by any person (other than the manufacturer or importer of the ODCs) for sale or for use in further manufacture. State income taxes more:label_state_20income_20taxes more:taxes Figure the environmental tax on Form 6627. State income taxes more:label_state_20income_20taxes more:taxes Enter the tax on the appropriate lines of Form 720 and attach Form 6627 to Form 720. State income taxes more:label_state_20income_20taxes more:taxes For environmental tax purposes, United States includes the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, any possession of the United States, the Commonwealth of the Northern Mariana Islands, the Trust Territory of the Pacific Islands, the continental shelf areas (applying the principles of section 638), and foreign trade zones. State income taxes more:label_state_20income_20taxes more:taxes No one is exempt from the environmental taxes, including the federal government, state and local governments, Indian tribal governments, and nonprofit educational organizations. State income taxes more:label_state_20income_20taxes more:taxes Oil Spill Liability Tax The oil spill liability tax is reported on Form 6627, Environmental Taxes, and Form 720, Quarterly Federal Excise Tax Return (IRS Nos. State income taxes more:label_state_20income_20taxes more:taxes 18 and 21). State income taxes more:label_state_20income_20taxes more:taxes The oil spill liability tax rate is $. State income taxes more:label_state_20income_20taxes more:taxes 08 per barrel and generally applies to crude oil received at a U. State income taxes more:label_state_20income_20taxes more:taxes S. State income taxes more:label_state_20income_20taxes more:taxes refinery and to petroleum products entered into the United States for consumption, use, or warehousing. State income taxes more:label_state_20income_20taxes more:taxes The tax also applies to certain uses and the exportation of domestic crude oil. State income taxes more:label_state_20income_20taxes more:taxes Crude oil includes crude oil condensates and natural gasoline. State income taxes more:label_state_20income_20taxes more:taxes Petroleum products include crude oil, refined and residual oil, and other liquid hydrocarbon refinery products. State income taxes more:label_state_20income_20taxes more:taxes Crude oil. State income taxes more:label_state_20income_20taxes more:taxes   Tax is imposed on crude oil when it is received at a United Sates refinery. State income taxes more:label_state_20income_20taxes more:taxes The operator of the refinery is liable for the tax. State income taxes more:label_state_20income_20taxes more:taxes   Tax is imposed on domestic crude oil used or exported before it is received at a United States refinery. State income taxes more:label_state_20income_20taxes more:taxes However, the use of crude oil for extracting oil or natural gas on the premises where such crude oil was produced is not taxable. State income taxes more:label_state_20income_20taxes more:taxes The user or exporter is liable for the tax. State income taxes more:label_state_20income_20taxes more:taxes Imported petroleum products. State income taxes more:label_state_20income_20taxes more:taxes   Tax is imposed on petroleum products when they enter the United States for consumption, use, or warehousing. State income taxes more:label_state_20income_20taxes more:taxes The person entering the petroleum product into the country is liable for the tax, including the tax on imported crude oil, even if it is subsequently received at a U. State income taxes more:label_state_20income_20taxes more:taxes S. State income taxes more:label_state_20income_20taxes more:taxes refinery. State income taxes more:label_state_20income_20taxes more:taxes   Tax is imposed only once on any imported petroleum product. State income taxes more:label_state_20income_20taxes more:taxes Thus, the operator of a U. State income taxes more:label_state_20income_20taxes more:taxes S. State income taxes more:label_state_20income_20taxes more:taxes refinery that receives imported crude oil must establish that the petroleum tax has already been imposed on such crude oil in order not to be liable for the tax. State income taxes more:label_state_20income_20taxes more:taxes ODCs For a list of the taxable ODCs and tax rates, see the Form 6627 instructions. State income taxes more:label_state_20income_20taxes more:taxes Taxable event. State income taxes more:label_state_20income_20taxes more:taxes   Tax is imposed on an ODC when it is first used or sold by its manufacturer or importer. State income taxes more:label_state_20income_20taxes more:taxes The manufacturer or importer is liable for the tax. State income taxes more:label_state_20income_20taxes more:taxes Use of ODCs. State income taxes more:label_state_20income_20taxes more:taxes   You use an ODC if you put it into service in a trade or business or for the production of income. State income taxes more:label_state_20income_20taxes more:taxes Also, an ODC is used if you use it in the making of an article, including incorporation into the article, chemical transformation, or release into the air. State income taxes more:label_state_20income_20taxes more:taxes The loss, destruction, packaging, repackaging, or warehousing of ODCs is not a use of the ODC. State income taxes more:label_state_20income_20taxes more:taxes   The creation of a mixture containing an ODC is treated as a taxable use of the ODC contained in the mixture. State income taxes more:label_state_20income_20taxes more:taxes An ODC is contained in a mixture only if the chemical identity of the ODC is not changed. State income taxes more:label_state_20income_20taxes more:taxes Generally, tax is imposed when the mixture is created and not on its sale or use. State income taxes more:label_state_20income_20taxes more:taxes However, you can choose to have the tax imposed on its sale or use by checking the appropriate box on Form 6627. State income taxes more:label_state_20income_20taxes more:taxes You can revoke this choice only with IRS consent. State income taxes more:label_state_20income_20taxes more:taxes   The creation of a mixture for export or for use as a feedstock is not a taxable use of the ODCs contained in the mixture. State income taxes more:label_state_20income_20taxes more:taxes Exceptions. State income taxes more:label_state_20income_20taxes more:taxes   The following may be exempt from the tax on ODCs. State income taxes more:label_state_20income_20taxes more:taxes Metered-dose inhalers. State income taxes more:label_state_20income_20taxes more:taxes Recycled ODCs. State income taxes more:label_state_20income_20taxes more:taxes Exported ODCs. State income taxes more:label_state_20income_20taxes more:taxes ODCs used as feedstock. State income taxes more:label_state_20income_20taxes more:taxes Metered-dose inhalers. State income taxes more:label_state_20income_20taxes more:taxes   There is no tax on ODCs used or sold for use as propellants in metered-dose inhalers. State income taxes more:label_state_20income_20taxes more:taxes For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. State income taxes more:label_state_20income_20taxes more:taxes The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. State income taxes more:label_state_20income_20taxes more:taxes 4682-2(d)(5). State income taxes more:label_state_20income_20taxes more:taxes The certificate may be included as part of the sales documentation. State income taxes more:label_state_20income_20taxes more:taxes Keep the certificate with your records. State income taxes more:label_state_20income_20taxes more:taxes Recycled ODCs. State income taxes more:label_state_20income_20taxes more:taxes   There is no tax on any ODC diverted or recovered in the United States as part of a recycling process (and not as part of the original manufacturing or production process). State income taxes more:label_state_20income_20taxes more:taxes There is no tax on recycled Halon-1301 or recycled Halon-2402 imported from a country that has signed the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol). State income taxes more:label_state_20income_20taxes more:taxes   The Montreal Protocol is administered by the United Nations (U. State income taxes more:label_state_20income_20taxes more:taxes N. State income taxes more:label_state_20income_20taxes more:taxes ). State income taxes more:label_state_20income_20taxes more:taxes To determine if a country has signed the Montreal Protocol, contact the U. State income taxes more:label_state_20income_20taxes more:taxes N. State income taxes more:label_state_20income_20taxes more:taxes The website is untreaty. State income taxes more:label_state_20income_20taxes more:taxes un. State income taxes more:label_state_20income_20taxes more:taxes org. State income taxes more:label_state_20income_20taxes more:taxes Exported ODCs. State income taxes more:label_state_20income_20taxes more:taxes   Generally, there is no tax on ODCs sold for export if certain requirements are met. State income taxes more:label_state_20income_20taxes more:taxes For a sale to be nontaxable, you and the purchaser must be registered. State income taxes more:label_state_20income_20taxes more:taxes See Form 637, Application for Registration (for Certain Excise Tax Activities). State income taxes more:label_state_20income_20taxes more:taxes Also, you must obtain from the purchaser an exemption certificate that you rely on in good faith. State income taxes more:label_state_20income_20taxes more:taxes Keep the certificate with your records. State income taxes more:label_state_20income_20taxes more:taxes The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. State income taxes more:label_state_20income_20taxes more:taxes 4682-5(d)(3). State income taxes more:label_state_20income_20taxes more:taxes The tax benefit of this exemption is limited. State income taxes more:label_state_20income_20taxes more:taxes For more information, see Regulations section 52. State income taxes more:label_state_20income_20taxes more:taxes 4682-5. State income taxes more:label_state_20income_20taxes more:taxes ODCs used as feedstock. State income taxes more:label_state_20income_20taxes more:taxes   There is no tax on ODCs sold for use or used as a feedstock. State income taxes more:label_state_20income_20taxes more:taxes An ODC is used as a feedstock only if the ODC is entirely consumed in the manufacture of another chemical. State income taxes more:label_state_20income_20taxes more:taxes The transformation of an ODC into one or more new compounds qualifies as use as a feedstock, but use of an ODC in a mixture does not qualify. State income taxes more:label_state_20income_20taxes more:taxes   For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. State income taxes more:label_state_20income_20taxes more:taxes The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. State income taxes more:label_state_20income_20taxes more:taxes 4682-2(d)(2). State income taxes more:label_state_20income_20taxes more:taxes Keep the certificate with your records. State income taxes more:label_state_20income_20taxes more:taxes Credits or refunds. State income taxes more:label_state_20income_20taxes more:taxes   A credit or refund (without interest) of tax paid on ODCs may be claimed if a taxed ODC is: Used as a propellant in a metered-dose inhaler (the person who used the ODC as a propellant may file a claim), Exported (the manufacturer may file a claim), or Used as a feedstock (the person who used the ODC may file a claim). State income taxes more:label_state_20income_20taxes more:taxes For information on how to file for credits or refunds, see the Instructions for Form 720 or Schedule 6 (Form 8849). State income taxes more:label_state_20income_20taxes more:taxes Conditions to allowance for ODCs exported. State income taxes more:label_state_20income_20taxes more:taxes   To claim a credit or refund for ODCs that are exported, you must have repaid or agreed to repay the tax to the exporter, or obtained the exporter's written consent to allowance of the credit or refund. State income taxes more:label_state_20income_20taxes more:taxes You must also have the evidence required by the EPA as proof that the ODCs were exported. State income taxes more:label_state_20income_20taxes more:taxes Imported Taxable Products An imported product containing or manufactured with ODCs is subject to tax if it is entered into the United States for consumption, use, or warehousing and is listed in the Imported Products Table. State income taxes more:label_state_20income_20taxes more:taxes The Imported Products Table is listed in Regulations section 52. State income taxes more:label_state_20income_20taxes more:taxes 4682-3(f)(6). State income taxes more:label_state_20income_20taxes more:taxes The tax is based on the weight of the ODCs used in the manufacture of the product. State income taxes more:label_state_20income_20taxes more:taxes Use the following methods to figure the ODC weight. State income taxes more:label_state_20income_20taxes more:taxes The actual (exact) weight of each ODC used as a material in manufacturing the product. State income taxes more:label_state_20income_20taxes more:taxes If the actual weight cannot be determined, the ODC weight listed for the product in the Imported Products Table. State income taxes more:label_state_20income_20taxes more:taxes However, if you cannot determine the actual weight and the table does not list an ODC weight for the product, the rate of tax is 1% of the entry value of the product. State income taxes more:label_state_20income_20taxes more:taxes Taxable event. State income taxes more:label_state_20income_20taxes more:taxes   Tax is imposed on an imported taxable product when the product is first sold or used by its importer. State income taxes more:label_state_20income_20taxes more:taxes The importer is liable for the tax. State income taxes more:label_state_20income_20taxes more:taxes Use of imported products. State income taxes more:label_state_20income_20taxes more:taxes   You use an imported product if you put it into service in a trade or business or for the production of income or use it in the making of an article, including incorporation into the article. State income taxes more:label_state_20income_20taxes more:taxes The loss, destruction, packaging, repackaging, warehousing, or repair of an imported product is not a use of that product. State income taxes more:label_state_20income_20taxes more:taxes Entry as use. State income taxes more:label_state_20income_20taxes more:taxes   The importer may choose to treat the entry of a product into the United States as the use of the product. State income taxes more:label_state_20income_20taxes more:taxes Tax is imposed on the date of entry instead of when the product is sold or used. State income taxes more:label_state_20income_20taxes more:taxes The choice applies to all imported taxable products that you own and have not used when you make the choice and all later entries. State income taxes more:label_state_20income_20taxes more:taxes Make the choice by checking the box in Part II of Form 6627. State income taxes more:label_state_20income_20taxes more:taxes The choice is effective as of the beginning of the calendar quarter to which the Form 6627 applies. State income taxes more:label_state_20income_20taxes more:taxes You can revoke this choice only with IRS consent. State income taxes more:label_state_20income_20taxes more:taxes Sale of article incorporating imported product. State income taxes more:label_state_20income_20taxes more:taxes   The importer may treat the sale of an article manufactured or assembled in the United States as the first sale or use of an imported taxable product incorporated in that article if both the following apply. State income taxes more:label_state_20income_20taxes more:taxes The importer has consistently treated the sale of similar items as the first sale or use of similar taxable imported products. State income taxes more:label_state_20income_20taxes more:taxes The importer has not chosen to treat entry into the United States as use of the product. State income taxes more:label_state_20income_20taxes more:taxes Imported products table. State income taxes more:label_state_20income_20taxes more:taxes   The table lists all the products that are subject to the tax on imported taxable products and specifies the ODC weight (discussed later) of each product. State income taxes more:label_state_20income_20taxes more:taxes   Each listing in the table identifies a product by name and includes only products that are described by that name. State income taxes more:label_state_20income_20taxes more:taxes Most listings identify a product by both name and Harmonized Tariff Schedule (HTS) heading. State income taxes more:label_state_20income_20taxes more:taxes In those cases, a product is included in that listing only if the product is described by that name and the rate of duty on the product is determined by reference to that HTS heading. State income taxes more:label_state_20income_20taxes more:taxes A product is included in the listing even if it is manufactured with or contains a different ODC than the one specified in the table. State income taxes more:label_state_20income_20taxes more:taxes   Part II of the table lists electronic items that are not included within any other list in the table. State income taxes more:label_state_20income_20taxes more:taxes An imported product is included in this list only if the product meets one of the following tests. State income taxes more:label_state_20income_20taxes more:taxes It is an electronic component whose operation involves the use of nonmechanical amplification or switching devices such as tubes, transistors, and integrated circuits. State income taxes more:label_state_20income_20taxes more:taxes It contains components described in (1), which account for more than 15% of the cost of the product. State income taxes more:label_state_20income_20taxes more:taxes   These components do not include passive electrical devices, such as resistors and capacitors. State income taxes more:label_state_20income_20taxes more:taxes Items such as screws, nuts, bolts, plastic parts, and similar specially fabricated parts that may be used to construct an electronic item are not themselves included in the listing for electronic items. State income taxes more:label_state_20income_20taxes more:taxes Rules for listing products. State income taxes more:label_state_20income_20taxes more:taxes   Products are listed in the table according to the following rules. State income taxes more:label_state_20income_20taxes more:taxes A product is listed in Part I of the table if it is a mixture containing ODCs. State income taxes more:label_state_20income_20taxes more:taxes A product is listed in Part II of the table if the Commissioner has determined that the ODCs used as materials in the manufacture of the product under the predominant method are used for purposes of refrigeration or air conditioning, creating an aerosol or foam, or manufacturing electronic components. State income taxes more:label_state_20income_20taxes more:taxes A product is listed in Part III of the table if the Commissioner has determined that the product meets both the following tests. State income taxes more:label_state_20income_20taxes more:taxes It is not an imported taxable product. State income taxes more:label_state_20income_20taxes more:taxes It would otherwise be included within a list in Part II of the table. State income taxes more:label_state_20income_20taxes more:taxes   For example, floppy disk drive units are listed in Part III because they are not imported taxable products and would have been included in the Part II list for electronic items not specifically identified, but for their listing in Part III. State income taxes more:label_state_20income_20taxes more:taxes ODC weight. State income taxes more:label_state_20income_20taxes more:taxes   The Table ODC weight of a product is the weight, determined by the Commissioner, of the ODCs used as materials in the manufacture of the product under the predominant method of manufacturing. State income taxes more:label_state_20income_20taxes more:taxes The ODC weight is listed in Part II in pounds per single unit of product unless otherwise specified. State income taxes more:label_state_20income_20taxes more:taxes Modifying the table. State income taxes more:label_state_20income_20taxes more:taxes   A manufacturer or importer of a product may request the IRS add a product and its ODC weight to the table. State income taxes more:label_state_20income_20taxes more:taxes They also may request the IRS remove a product from the table, or change or specify the ODC weight of a product. State income taxes more:label_state_20income_20taxes more:taxes To request a modification, see Regulations section 52. State income taxes more:label_state_20income_20taxes more:taxes 4682-3(g) for the mailing address and information that must be included in the request. State income taxes more:label_state_20income_20taxes more:taxes Floor Stocks Tax Tax is imposed on any ODC held (other than by the manufacturer or importer of the ODC) on January 1 for sale or use in further manufacturing. State income taxes more:label_state_20income_20taxes more:taxes The person holding title (as determined under local law) to the ODC is liable for the tax, whether or not delivery has been made. State income taxes more:label_state_20income_20taxes more:taxes These chemicals are taxable without regard to the type or size of storage container in which the ODCs are held. State income taxes more:label_state_20income_20taxes more:taxes The tax may apply to an ODC whether it is in a 14-ounce can or a 30-pound tank. State income taxes more:label_state_20income_20taxes more:taxes You are liable for the floor stocks tax if you hold any of the following on January 1. State income taxes more:label_state_20income_20taxes more:taxes At least 400 pounds of ODCs other than halons or methyl chloroform, At least 50 pounds of halons, or At least 1,000 pounds of methyl chloroform. State income taxes more:label_state_20income_20taxes more:taxes If you are liable for the tax, prepare an inventory on January 1 of the taxable ODCs held on that date for sale or for use in further manufacturing. State income taxes more:label_state_20income_20taxes more:taxes You must pay this floor stocks tax by June 30 of each year. State income taxes more:label_state_20income_20taxes more:taxes Report the tax on Form 6627 and Part II of Form 720 for the second calendar quarter. State income taxes more:label_state_20income_20taxes more:taxes For the tax rates, see the Form 6627 instructions. State income taxes more:label_state_20income_20taxes more:taxes ODCs not subject to floor stocks tax. State income taxes more:label_state_20income_20taxes more:taxes   The floor stocks tax is not imposed on any of the following ODCs. State income taxes more:label_state_20income_20taxes more:taxes ODCs mixed with other ingredients that contribute to achieving the purpose for which the mixture will be used, unless the mixture contains only ODCs and one or more stabilizers. State income taxes more:label_state_20income_20taxes more:taxes ODCs contained in a manufactured article in which the ODCs will be used for their intended purpose without being released from the article. State income taxes more:label_state_20income_20taxes more:taxes ODCs that have been reclaimed or recycled. State income taxes more:label_state_20income_20taxes more:taxes ODCs sold in a qualifying sale for: Use as a feedstock, Export, or Use as a propellant in a metered-dose inhaler. State income taxes more:label_state_20income_20taxes more:taxes Prev  Up  Next   Home   More Online Publications