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State Tax Efile

State tax efile Publication 597 - Introductory Material Table of Contents Introduction Introduction This publication provides information on the income tax treaty between the United States and Canada. State tax efile It discusses a number of treaty provisions that often apply to U. State tax efile S. State tax efile citizens or residents who may be liable for Canadian tax. State tax efile Treaty provisions are generally reciprocal (the same rules apply to both treaty countries). State tax efile Therefore, a Canadian resident who receives income from the United States may refer to this publication to see if a treaty provision may affect the tax to be paid to the United States. State tax efile This publication does not deal with Canadian income tax laws; nor does it provide Canada's interpretation of treaty articles, definitions, or specific terms not defined in the treaty itself. State tax efile The United States—Canada income tax treaty was signed on September 26, 1980. State tax efile It has been amended by five protocols, the most recent of which generally became effective January 1, 2009. State tax efile In this publication, the term “article” refers to the particular article of the treaty, as amended. State tax efile Prev  Up  Next   Home   More Online Publications
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IRS - Issuing Refunds

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Every year, the IRS issues refunds to millions of taxpayers. Refund data are reported in multiple ways, including by the number issued and refund amounts. Historical refund data are also available from 1987 to 2007.

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Fiscal Year Data

The tables below were originally published in the IRS Data Book, which is IRS Publication 55B, and are complied by various divisions throughout the IRS. The IRS's fiscal year runs from October 1 to September 30.

Refunds Issued and Refund Amounts

Number of Internal Revenue Refunds Issued
The number of refunds issued are shown for selected returns, including corporation, individual, employment, estate, gift, and excise taxes, by state.

• Prior to 2000, the number of refunds for selected tax return types are classified by Internal Revenue region and district.

Fiscal Years available:
1999     1998     1997     1996     1995

 

Amount of Internal Revenue Refunds Issued, Including Interest
These tables show the total dollar amount refunded, by state and type of tax.

• Prior to 2000, the total dollar amounts refunded are shown by Internal Revenue region and district and by type of tax return. 

Fiscal Years available:
1999     1998     1997     1996     1995


Historical IRS Tax Refunds
Total dollar amounts refunded by quarter and fiscal year, by type of return.

SOI Bulletin Historical Table 19
Fiscal Years covered:  1987-2007




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The State Tax Efile

State tax efile Depreciation Table of Contents Introduction Special Depreciation AllowanceQualified Property Election Not To Claim the Allowance Rules for Returns Filed Before June 1, 2002 Passenger Automobiles New York Liberty Zone BenefitsSpecial Liberty Zone Depreciation Allowance Increased Section 179 Deduction Liberty Zone Leasehold Improvement Property If you depreciate business property that you acquired and placed in service after September 10, 2001, new law contains provisions that may affect your depreciation deduction for that property. State tax efile Publication 946, How To Depreciate Property, contains information on depreciation. State tax efile However, Publication 946 does not contain the new provisions because it was printed before the law was enacted. State tax efile The new provisions are in the Supplement to Publication 946, which is reprinted below. State tax efile Supplement to Publication 946 How To Depreciate Property   Introduction After Publication 946 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. State tax efile The new law made several changes in the tax rules explained in the publication. State tax efile Some of the changes apply to property placed in service during 2001. State tax efile This supplemental publication describes those changes and explains what you should do if you are affected by them. State tax efile The situations and examples in Publication 946 do not reflect any of the changes made by the Job Creation and Worker Assistance Act of 2002. State tax efile The new law contains the following provisions. State tax efile 30% depreciation deductions (special depreciation allowance and special New York Liberty Zone (Liberty Zone) depreciation allowance) for the year qualified property is placed in service after September 10, 2001. State tax efile An increased dollar limit on the section 179 deduction for qualified Liberty Zone property purchased after September 10, 2001. State tax efile A shorter recovery period for qualified Liberty Zone leasehold improvement property placed in service after September 10, 2001. State tax efile An increase in the maximum depreciation deduction for 2001 for a qualified passenger automobile placed in service after September 10, 2001. State tax efile If you believe you qualify for an increased deduction under any of these new rules, you must file the revised 2001 Form 4562 (dated March 2002) for 2001 calendar or fiscal years and 2000 fiscal years ending after September 10, 2001. State tax efile If you have already filed a tax return, this supplemental publication explains how to claim these benefits and how to elect not to claim the special depreciation allowance or special Liberty Zone depreciation allowance. State tax efile See Table 2 at the end of the supplement for an overview of the rules that apply if you filed your return before June 1, 2002. State tax efile Special Depreciation Allowance You can take a special depreciation allowance for qualified property you place in service after September 10, 2001. State tax efile The allowance is an additional deduction of 30% of the property's depreciable basis. State tax efile To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. State tax efile See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. State tax efile The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. State tax efile There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. State tax efile In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. State tax efile Example 1. State tax efile On November 1, 2001, you bought and placed in service in your business qualified property that cost $100,000. State tax efile You did not elect to claim a section 179 deduction. State tax efile You can deduct 30% of the cost ($30,000) as a special depreciation allowance for 2001. State tax efile You use the remaining $70,000 of cost to figure your regular depreciation deduction for 2001 and later years. State tax efile Example 2. State tax efile The facts are the same as in Example 1, except that you choose to deduct $24,000 of the property's cost as a section 179 deduction. State tax efile You use the remaining $76,000 of cost to figure your special depreciation allowance of $22,800 ($76,000 × 30%). State tax efile You use the remaining $53,200 of cost to figure your regular depreciation deduction for 2001 and later years. State tax efile Qualified Property To qualify for the special depreciation allowance, your property must meet the following requirements. State tax efile It is new property of one of the following types. State tax efile Property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. State tax efile See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. State tax efile Water utility property. State tax efile See 25-year property on page 22 in Publication 946. State tax efile Computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. State tax efile (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. State tax efile ) Qualified leasehold improvement property (defined later). State tax efile It meets the following tests (explained later under Tests To Be Met). State tax efile Acquisition date test. State tax efile Placed in service date test. State tax efile Original use test. State tax efile It is not excepted property (explained later under Excepted Property). State tax efile Qualified leasehold improvement property. State tax efile    Generally, this is any improvement to an interior part of a building that is nonresidential real property, provided all of the following requirements are met. State tax efile The improvement is made under or pursuant to a lease by the lessee (or any sublessee) or the lessor of that part of the building. State tax efile That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. State tax efile The improvement is placed in service more than 3 years after the date the building was first placed in service. State tax efile   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. State tax efile The enlargement of the building. State tax efile Any elevator or escalator. State tax efile Any structural component benefiting a common area. State tax efile The internal structural framework of the building. State tax efile   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. State tax efile However, a binding commitment between related persons is not treated as a lease. State tax efile Related persons. State tax efile   For this purpose, the following are related persons. State tax efile Members of an affiliated group. State tax efile The persons listed in items (1) through (9) under Related persons on page 8 of Publication 946 (except that “80% or more” should be substituted for “more than 10%” each place it appears). State tax efile An executor and a beneficiary of the same estate. State tax efile Tests To Be Met To qualify for the special depreciation allowance, the property must meet all of the following tests. State tax efile Acquisition date test. State tax efile    Generally, you must have acquired the property either: After September 10, 2001, and before September 11, 2004, but only if no written binding contract for the acquisition was in effect before September 11, 2001, or Pursuant to a written binding contract entered into after September 10, 2001, and before September 11, 2004. State tax efile   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001, and before September 11, 2004. State tax efile Placed in service date test. State tax efile   Generally, the property must be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. State tax efile   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. State tax efile Original use test. State tax efile   The original use of the property must have begun with you after September 10, 2001. State tax efile “Original use” means the first use to which the property is put, whether or not by you. State tax efile Additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test. State tax efile Excepted Property The following property does not qualify for the special depreciation allowance. State tax efile Property used by any person before September 11, 2001. State tax efile Property required to be depreciated using ADS. State tax efile This includes listed property used 50% or less in a qualified business use. State tax efile Qualified New York Liberty Zone leasehold improvement property (defined next). State tax efile Qualified New York Liberty Zone leasehold improvement property. State tax efile   This is any qualified leasehold improvement property (as defined earlier) if all of the following requirements are met. State tax efile The improvement is to a building located in the New York Liberty Zone (defined later under New York Liberty Zone Benefits). State tax efile The improvement is placed in service after September 10, 2001, and before January 1, 2007. State tax efile No written binding contract for the improvement was in effect before September 11, 2001. State tax efile Election Not To Claim the Allowance You can elect not to claim the special depreciation allowance for qualified property. State tax efile If you make this election for any property, it applies to all property in the same property class placed in service during the year. State tax efile To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. State tax efile When to make election. State tax efile   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. State tax efile   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). State tax efile Attach the election statement to the amended return. State tax efile At the top of the election statement, write “Filed pursuant to section 301. State tax efile 9100–2. State tax efile ” Revoking an election. State tax efile   Once you elect not to deduct the special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. State tax efile A request to revoke the election is subject to a user fee. State tax efile Rules for Returns Filed Before June 1, 2002 The following rules apply if you placed qualified property in service after September 10, 2001, and filed your return before June 1, 2002. State tax efile The rules apply to returns for the following years. State tax efile 2000 fiscal years that end after September 10, 2001. State tax efile 2001 calendar and fiscal years. State tax efile Claiming the allowance. State tax efile   If you did not claim the allowance on your return and did not make the election not to claim the allowance, you can do either of the following to claim the allowance. State tax efile File an amended return by the due date (not including extensions) of your return for the year following the year the property was placed in service. State tax efile Write “Filed Pursuant to Rev. State tax efile Proc. State tax efile 2002–33” at the top of the amended return. State tax efile File Form 3115, Application for Change in Accounting Method, with your return for the year following the year the property was placed in service. State tax efile Your return must be filed by the due date (including extensions). State tax efile Write “Automatic Change Filed Under Rev. State tax efile Proc. State tax efile 2002–33” on the appropriate line of Form 3115. State tax efile You must also file a copy (with signature) of the completed Form 3115 with the IRS National Office no later than when you file the original with your return. State tax efile For more information about filing Form 3115, including the address to send it to, see Revenue Procedure 2002–9, Revenue Procedure 2002–19, and Revenue Procedure 2002–33. State tax efile Example 1. State tax efile You are an individual and you use the calendar year. State tax efile You placed qualified property in service for your business in December 2001. State tax efile You filed your 2001 income tax return before April 15, 2002. State tax efile You did not claim the special depreciation allowance for the property and did not make the election not to claim the allowance. State tax efile You can claim the special allowance by filing an amended 2001 return by April 15, 2003, with “Filed Pursuant to Rev. State tax efile Proc. State tax efile 2002–33” at the top of the amended return. State tax efile You must file an amended return by April 15, 2003, even if you get an extension of time to file your 2002 tax return. State tax efile Example 2. State tax efile The facts concerning your 2001 return are the same as in Example 1. State tax efile In addition, you got an automatic 4-month extension of time (to August 15, 2003) to file your 2002 return. State tax efile You can claim the special allowance by filing a Form 3115 (with “Filed Pursuant to Rev. State tax efile Proc. State tax efile 2002–33” on the appropriate line) with your 2002 return by August 15, 2003. State tax efile You must also file a copy of this Form 3115 with the IRS National Office no later than when you file your 2002 return. State tax efile Electing not to claim the allowance. State tax efile   Generally, you have elected not to claim the special depreciation allowance for a class of property if you: Filed your return timely (including extensions) for the year you placed qualified property in service and indicated on a statement with the return that you are not claiming the allowance, or Filed your return timely and filed an amended return within 6 months of the due date of the original return (not including extensions) and indicated on a statement with the amended return that you are not claiming the allowance. State tax efile The statement must indicate that you are not deducting the special depreciation allowance and the class of property to which the election applies. State tax efile The statement can be either attached to or written on the return. State tax efile You can, for example, write “not deducting 30%” on Form 4562. State tax efile Deemed election. State tax efile   If you have not followed either of the procedures described above to elect not to claim the allowance, you may still be treated as making the election. State tax efile You will be treated as making the election if you meet both of the following conditions. State tax efile You filed your return for the year you placed the property in service and claimed depreciation, but not the special allowance, for any class of property. State tax efile You do not file an amended return or a Form 3115 within the time prescribed for claiming the special allowance. State tax efile See Claiming the allowance, earlier. State tax efile Passenger Automobiles The limit on your depreciation deduction (including any section 179 deduction) for any passenger automobile that is qualified property (defined earlier) placed in service after September 10, 2001, and for which you claim the special depreciation allowance is increased. State tax efile Generally, the limit is increased from $3,060 to $7,660. State tax efile However, if the automobile is a qualified electric car, the limit is increased from $9,280 to $23,080 ($22,980 if placed in service in 2002). State tax efile Table 1 shows the maximum deduction amounts for 2001. State tax efile Table 1. State tax efile Maximum Deduction for 2001 Qualified Vehicle Placed in Service Before Sept. State tax efile 11 Placed in Service After Sept. State tax efile 10 Passenger automobile $3,060 $7,660 Electric car 9,280 23,080 1 1$22,980 if you place an electric car in service in 2002. State tax efile Election not to claim the allowance. State tax efile   The increased maximum depreciation deduction does not apply if you elected not to claim the special depreciation allowance as explained earlier under Election Not To Claim the Allowance and Rules for Returns Filed Before June 1, 2002. State tax efile New York Liberty Zone Benefits Several benefits are available for property you place in service in the New York Liberty Zone (Liberty Zone). State tax efile They include a special depreciation allowance for the year you place the property in service, an increased section 179 deduction, and the classification of certain leasehold improvement property as 5-year property. State tax efile Area defined. State tax efile   The New York Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway) in the Borough of Manhattan in the City of New York, New York. State tax efile Special Liberty Zone Depreciation Allowance You can take a special depreciation allowance for qualified Liberty Zone property you place in service after September 10, 2001. State tax efile The allowance is an additional deduction of 30% of the property's depreciable basis. State tax efile To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. State tax efile See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. State tax efile The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. State tax efile There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. State tax efile In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. State tax efile You cannot claim the special Liberty Zone depreciation allowance for property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. State tax efile Qualified property is eligible for only one special depreciation allowance. State tax efile Example 1. State tax efile On November 1, 2001, you bought and placed in service in your business, which is in the Liberty Zone, qualified Liberty Zone property that cost $200,000. State tax efile You did not elect to claim a section 179 deduction. State tax efile You can deduct 30% of the cost ($60,000) as a special Liberty Zone depreciation allowance for 2001. State tax efile You use the remaining $140,000 of cost to figure your regular depreciation deduction for 2001 and later years. State tax efile Example 2. State tax efile The facts are the same as in Example 1, except that you choose to deduct $59,000 of the property's cost as a section 179 deduction. State tax efile (See Increased Section 179 Deduction, later, for information concerning how this section 179 deduction amount is figured). State tax efile You use the remaining $141,000 of cost to figure your special Liberty Zone depreciation allowance of $42,300 ($141,000 × 30%). State tax efile You use the remaining $98,700 of cost to figure your regular depreciation deduction for 2001 and later years. State tax efile Qualified Liberty Zone Property For a 2001 calendar or fiscal year and a 2000 fiscal year that ends after September 10, 2001, property qualifies for the special Liberty Zone depreciation allowance if it meets the following requirements. State tax efile It is one of the following types of property. State tax efile Used property depreciated under MACRS with a recovery period of 20 years or less. State tax efile See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. State tax efile Used water utility property. State tax efile See 25-year property on page 22 in Publication 946. State tax efile Used computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. State tax efile (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. State tax efile ) Certain nonresidential real property and residential rental property (defined later). State tax efile It meets the following tests (explained later under Tests to be met). State tax efile Acquisition date test. State tax efile Placed in service date test. State tax efile Substantial use test. State tax efile Original use test. State tax efile It is not excepted property (explained later under Excepted property). State tax efile Nonresidential real property and residential rental property. State tax efile   This property is qualifying property only to the extent it rehabilitates real property damaged, or replaces real property destroyed or condemned, as a result of the terrorist attack of September 11, 2001. State tax efile Property is treated as replacing destroyed or condemned property if, as part of an integrated plan, such property replaces real property included in a continuous area that includes real property destroyed or condemned. State tax efile   For these purposes, real property is considered destroyed (or condemned) only if an entire building or structure was destroyed (or condemned) as a result of the terrorist attack. State tax efile Otherwise, the property is considered damaged real property. State tax efile For example, if certain structural components of a building (such as walls, floors, or plumbing fixtures) are damaged or destroyed as a result of the terrorist attack, but the building is not destroyed (or condemned), then only costs related to replacing the damaged or destroyed structural components qualify for the special Liberty Zone depreciation allowance. State tax efile Tests to be met. State tax efile   To qualify for the special Liberty Zone depreciation allowance, your property must meet all of the following tests. State tax efile Acquisition date test. State tax efile   You must have acquired the property by purchase after September 10, 2001, and there must not have been a binding written contract for the acquisition in effect before September 11, 2001. State tax efile   For information on the acquisition of property by purchase, see Property Acquired by Purchase on page 15 of Publication 946. State tax efile   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001. State tax efile Placed in service date test. State tax efile   Generally, the property must be placed in service for use in your trade or business or for the production of income before January 1, 2007 (January 1, 2010, in the case of qualifying nonresidential real property and residential rental property). State tax efile   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. State tax efile Substantial use test. State tax efile   Substantially all use of the property must be in the Liberty Zone and in the active conduct of your trade or business in the Liberty Zone. State tax efile Original use test. State tax efile   The original use of the property in the Liberty Zone must have begun with you after September 10, 2001. State tax efile   Used property can be qualified Liberty Zone property if it has not previously been used within the Liberty Zone. State tax efile Also, additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test if the original use of the property in the Liberty Zone began with you. State tax efile Excepted property. State tax efile   The following property does not qualify for the special Liberty Zone depreciation allowance. State tax efile Property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. State tax efile Property required to be depreciated using ADS. State tax efile This includes listed property used 50% or less in a qualified business use. State tax efile Qualified New York Liberty Zone leasehold improvement property (defined earlier in Excepted Property under Special Depreciation Allowance). State tax efile Example. State tax efile In December 2001, you bought and placed in service in your business in the Liberty Zone the following property. State tax efile New office furniture with a MACRS recovery period of 7 years. State tax efile A used computer with a MACRS recovery period of 5 years. State tax efile The computer had not previously been used within the Liberty Zone. State tax efile Because the office furniture is new property, it qualifies for the special depreciation allowance, but not the special Liberty Zone depreciation allowance. State tax efile Because the computer is used property that had not previously been used in the Liberty Zone, it qualifies for the special Liberty Zone depreciation allowance, but not the special depreciation allowance. State tax efile Election Not To Claim the Liberty Zone Allowance You can elect not to claim the special Liberty Zone depreciation allowance for qualified property. State tax efile If you make this election for any property, it applies to all property in the same property class placed in service during the year. State tax efile To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. State tax efile When to make the election. State tax efile   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. State tax efile   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). State tax efile Attach the election statement to the amended return. State tax efile At the top of the election statement, write “Filed pursuant to section 301. State tax efile 9100–2. State tax efile ” Revoking an election. State tax efile   Once you elect not to deduct the special Liberty Zone depreciation allowance for a class of property, you cannot revoke the election without IRS consent. State tax efile A request to revoke the election is subject to a user fee. State tax efile Returns filed before June 1, 2002. State tax efile   The rules that apply to the special depreciation allowance discussed earlier in Rules for Returns Filed Before June 1, 2002 under Special Depreciation Allowance also apply to the special Liberty Zone depreciation allowance. State tax efile Increased Section 179 Deduction Under section 179 of the Internal Revenue Code, you can choose to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. State tax efile For tax years beginning in 2000, that limit was $20,000. State tax efile For tax years beginning in 2001 and 2002, that limit is generally $24,000. State tax efile If the cost of qualifying section 179 property placed in service in a year is over $200,000, you must reduce the dollar limit (but not below zero) by the amount of the cost over $200,000. State tax efile Increased Dollar Limit The dollar limit on the section 179 deduction is increased for certain property placed in service in the Liberty Zone. State tax efile The increase is the smaller of the following amounts. State tax efile $35,000. State tax efile The cost of section 179 property that is qualified Liberty Zone property placed in service during the year. State tax efile If you use the revised 2001 Form 4562 (dated March 2002) for a tax year beginning in 2000, you must reduce the section 179 dollar limit to $20,000 before adding the additional amount for qualified property. State tax efile Qualified property. State tax efile   To qualify for the increased section 179 deduction, your property must be section 179 property that is either: Qualified Liberty Zone property, or Property that would be qualified Liberty Zone property except that it is eligible for the special depreciation allowance. State tax efile Qualified Liberty Zone property is explained earlier in Qualified Liberty Zone Property under Special Liberty Zone Depreciation Allowance. State tax efile Property eligible for the special depreciation allowance is explained earlier in Qualified Property under Special Depreciation Allowance. State tax efile For information on the requirements that must be met for property to qualify for the section 179 deduction, see What Property Qualifies? on page 14 of Publication 946. State tax efile Example 1. State tax efile In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $25,000. State tax efile Because this cost is less than $35,000, the dollar limit on the section 179 deduction is increased by $25,000 to $49,000 ($24,000 + $25,000). State tax efile Example 2. State tax efile In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $75,000. State tax efile Because $35,000 is less than the cost of the property you place in service, the dollar limit on the section 179 deduction you can claim is increased by $35,000 to $59,000 ($24,000 + $35,000). State tax efile Reduced Dollar Limit Generally, you must reduce the dollar limit for a year by the cost of qualifying section 179 property placed in service in the year that is more than $200,000. State tax efile However, if the cost of your Liberty Zone property exceeds $200,000, you take into account only 50% (instead of 100%) of the cost of qualified property placed in service in a year. State tax efile Example. State tax efile In 2002, you place in service in your business, which is in the Liberty Zone, qualified property costing $460,000. State tax efile Your increased dollar limit is $59,000 ($35,000 + $24,000). State tax efile Because 50% of the cost of the property you place in service ($230,000) is $30,000 more than $200,000, you must reduce your $59,000 dollar limit to $29,000 ($59,000 - $30,000). State tax efile Recapture Rules Rules similar to those explained on page 20 of Publication 946 under When Must You Recapture the Deduction? apply with respect to any qualified property you stop using in the Liberty Zone. State tax efile Returns Filed Before June 1, 2002 If you filed a return before June 1, 2002, and did not deduct the increased section 179 amount for qualified property placed in service after September 10, 2001, you can deduct the increased amount by filing an amended return by the due date (not including extensions) of the return for the year after the year the property was placed in service. State tax efile This rule applies to returns for the following years. State tax efile 2000 fiscal years that end after September 10, 2001. State tax efile 2001 calendar and fiscal years. State tax efile On the amended return, write “Filed Pursuant to Rev. State tax efile Proc. State tax efile 2002–33. State tax efile ” Liberty Zone Leasehold Improvement Property Qualified Liberty Zone leasehold improvement property (described earlier in Qualified Property under Special Depreciation Allowance) is 5-year property. State tax efile This means that it is depreciated over a recovery period of 5 years. State tax efile For information about recovery periods, see Which Recovery Period Applies? on page 23 of Publication 946. State tax efile The straight-line method must be used with respect to qualified Liberty Zone leasehold improvement property. State tax efile Under ADS, the recovery period for qualified Liberty Zone leasehold improvement property is 9 years. State tax efile Returns Filed Before June 1, 2002 If you filed either of the following returns before June 1, 2002, and did not depreciate qualified Liberty Zone leasehold improvement property placed in service during the tax year as 5-year property using the straight line method, you should file an amended return before you file your return for the year after the year the property was placed in service. State tax efile Your 2000 fiscal year return (for a 2000 fiscal year that ends after September 10, 2001). State tax efile Your 2001 calendar or fiscal year return. State tax efile On the amended return, write “Filed Pursuant to Rev. State tax efile Proc. State tax efile 2002–33. State tax efile ” Table 2. State tax efile Rules for Returns Filed Before June 1, 2002 Note:This chart highlights the rules for returns affected by the Job Creation and Worker Assistance Act of 2002 that were filed before June 1, 2002, without accounting for any of the new benefits under the law. State tax efile See the text for definitions and examples. State tax efile Do not rely on this chart alone. State tax efile IF you want to. State tax efile . State tax efile . State tax efile THEN you. State tax efile . State tax efile . State tax efile BY. State tax efile . State tax efile . State tax efile claim the special depreciation allowance or special Liberty Zone depreciation allowance • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service, or • must file Form 3115, Application for Change in Accounting Method, with your return for the year after the year the property was placed in service • the due date (including extensions) of your return for the year after the year the property was placed in service, and • must file a copy of your completed Form 3115 with the IRS National Office • the date you file the original Form 3115 with your return for the year after the year the property was placed in service. State tax efile elect not to claim the special depreciation allowance or the special Liberty Zone depreciation allowance 1 • must have filed your return timely for the year the property was placed in service, and   • must file an amended return stating you are not claiming the allowance • the date that is 6 months after the due date of the original return (not including extensions). State tax efile deduct the increased section 179 amount • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service. State tax efile use a 5-year recovery period for depreciating qualified Liberty Zone leasehold improvement property • should file an amended return • the date you file your return for the year after the year the property was placed in service. State tax efile 1See also Deemed election under Rules for Returns Filed Before June 1, 2002, earlier. 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