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Unemployment Tax Filing

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Unemployment Tax Filing

Unemployment tax filing Publication 463 - Introductory Material Table of Contents Future Developments What's New Reminder IntroductionUsers of employer-provided vehicles. Unemployment tax filing Volunteers. Unemployment tax filing Ordering forms and publications. Unemployment tax filing Tax questions. Unemployment tax filing Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 463, such as legislation enacted after it was published, go to www. Unemployment tax filing irs. Unemployment tax filing gov/pub463. Unemployment tax filing What's New Standard mileage rate. Unemployment tax filing  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. Unemployment tax filing Car expenses and use of the standard mileage rate are explained in chapter 4. Unemployment tax filing Depreciation limits on cars, trucks, and vans. Unemployment tax filing  For 2013, the first-year limit on the total depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). Unemployment tax filing For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). Unemployment tax filing Depreciation limits are explained in chapter 4. Unemployment tax filing Section 179 deduction. Unemployment tax filing  For 2013, the section 179 deduction limit on qualifying property purchases (including cars, trucks, and vans) is a total of $500,000 and the limit on those purchases at which the deduction begins to be phased out is $2,000,000. Unemployment tax filing Section 179 Deduction is explained in chapter 4. Unemployment tax filing Special depreciation allowance. Unemployment tax filing  For 2013, the special (“bonus”) depreciation allowance on qualified property (including cars, trucks, and vans) remains at 50%. Unemployment tax filing Special Depreciation Allowance is explained in chapter 4. Unemployment tax filing Reminder Photographs of missing children. Unemployment tax filing  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Unemployment tax filing Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Unemployment tax filing You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Unemployment tax filing Per diem rates. Unemployment tax filing  The IRS no longer updates Publication 1542, Per Diem Rates (For Travel Within the Continental United States). Unemployment tax filing Instead, current per diem rates may be found on the U. Unemployment tax filing S. Unemployment tax filing General Services Administration (GSA) website at www. Unemployment tax filing gsa. Unemployment tax filing gov/perdiem. Unemployment tax filing Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. Unemployment tax filing An ordinary expense is one that is common and accepted in your trade or business. Unemployment tax filing A necessary expense is one that is helpful and appropriate for your business. Unemployment tax filing An expense does not have to be required to be considered necessary. Unemployment tax filing This publication explains: What expenses are deductible, How to report them on your return, What records you need to prove your expenses, and How to treat any expense reimbursements you may receive. Unemployment tax filing Who should use this publication. Unemployment tax filing   You should read this publication if you are an employee or a sole proprietor who has business-related travel, entertainment, gift, or transportation expenses. Unemployment tax filing Users of employer-provided vehicles. Unemployment tax filing   If an employer-provided vehicle was available for your use, you received a fringe benefit. Unemployment tax filing Generally, your employer must include the value of the use or availability of the vehicle in your income. Unemployment tax filing However, there are exceptions if the use of the vehicle qualifies as a working condition fringe benefit (such as the use of a qualified nonpersonal use vehicle). Unemployment tax filing   A working condition fringe benefit is any property or service provided to you by your employer for which you could deduct the cost as an employee business expense if you had paid for it. Unemployment tax filing   A qualified nonpersonal use vehicle is one that is not likely to be used more than minimally for personal purposes because of its design. Unemployment tax filing See Qualified nonpersonal use vehicles under Actual Car Expenses in chapter 4. Unemployment tax filing   For information on how to report your car expenses that your employer did not provide or reimburse you for (such as when you pay for gas and maintenance for a car your employer provides), see Vehicle Provided by Your Employer in chapter 6. Unemployment tax filing Who does not need to use this publication. Unemployment tax filing   Partnerships, corporations, trusts, and employers who reimburse their employees for business expenses should refer to their tax form instructions and chapter 11 of Publication 535, Business Expenses, for information on deducting travel, meals, and entertainment expenses. Unemployment tax filing   If you are an employee, you will not need to read this publication if all of the following are true. Unemployment tax filing You fully accounted to your employer for your work-related expenses. Unemployment tax filing You received full reimbursement for your expenses. Unemployment tax filing Your employer required you to return any excess reimbursement and you did so. Unemployment tax filing There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. Unemployment tax filing If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. Unemployment tax filing If you would like more information on reimbursements and accounting to your employer, see chapter 6 . Unemployment tax filing    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. Unemployment tax filing Volunteers. Unemployment tax filing   If you perform services as a volunteer worker for a qualified charity, you may be able to deduct some of your costs as a charitable contribution. Unemployment tax filing See Out-of-Pocket Expenses in Giving Services in Publication 526, Charitable Contributions, for information on the expenses you can deduct. Unemployment tax filing Comments and suggestions. Unemployment tax filing   We welcome your comments about this publication and your suggestions for future editions. Unemployment tax filing   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Unemployment tax filing NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Unemployment tax filing Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Unemployment tax filing   You can send your comments from www. Unemployment tax filing irs. Unemployment tax filing gov/formspubs/. Unemployment tax filing Click on “More Information” and then on “Comment on Tax Forms and Publications. Unemployment tax filing ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Unemployment tax filing Ordering forms and publications. Unemployment tax filing   Visit www. Unemployment tax filing irs. Unemployment tax filing gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Unemployment tax filing Internal Revenue Service 1201 N. Unemployment tax filing Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Unemployment tax filing   If you have a tax question, check the information available on IRS. Unemployment tax filing gov or call 1-800-829-1040. Unemployment tax filing We cannot answer tax questions sent to either of the above addresses. Unemployment tax filing Useful Items - You may want to see: Publication 225 Farmer's Tax Guide 529 Miscellaneous Deductions 535 Business Expenses 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization See chapter 7, How To Get Tax Help , for information about getting these publications and forms. Unemployment tax filing Prev  Up  Next   Home   More Online Publications
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The Unemployment Tax Filing

Unemployment tax filing 36. Unemployment tax filing   Earned Income Credit (EIC) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. Unemployment tax filing Rules for EveryoneRule 1. Unemployment tax filing Your AGI Must Be Less Than: Rule 2. Unemployment tax filing You Must Have a Valid Social Security Number (SSN) Rule 3. Unemployment tax filing Your Filing Status Cannot Be Married Filing Separately Rule 4. Unemployment tax filing You Must Be a U. Unemployment tax filing S. Unemployment tax filing Citizen or Resident Alien All Year Rule 5. Unemployment tax filing You Cannot File Form 2555 or Form 2555-EZ Rule 6. Unemployment tax filing Your Investment Income Must Be $3,300 or Less Rule 7. Unemployment tax filing You Must Have Earned Income Part B. Unemployment tax filing Rules If You Have a Qualifying ChildRule 8. Unemployment tax filing Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. Unemployment tax filing Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. Unemployment tax filing You Cannot Be a Qualifying Child of Another Taxpayer Part C. Unemployment tax filing Rules If You Do Not Have a Qualifying ChildRule 11. Unemployment tax filing You Must Be at Least Age 25 but Under Age 65 Rule 12. Unemployment tax filing You Cannot Be the Dependent of Another Person Rule 13. Unemployment tax filing You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. Unemployment tax filing You Must Have Lived in the United States More Than Half of the Year Part D. Unemployment tax filing Figuring and Claiming the EICRule 15. Unemployment tax filing Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. Unemployment tax filing John and Janet Smith (Form 1040A) Example 2. Unemployment tax filing Kelly Green (Form 1040EZ) What's New Earned income amount is more. Unemployment tax filing  The maximum amount of income you can earn and still get the credit has increased. Unemployment tax filing You may be able to take the credit if: You have three or more qualifying children and you earned less than $46,227 ($51,567 if married filing jointly), You have two qualifying children and you earned less than $43,038 ($48,378 if married filing jointly), You have one qualifying child and you earned less than $37,870 ($43,210 if married filing jointly), or You do not have a qualifying child and you earned less than $14,340 ($19,680 if married filing jointly). Unemployment tax filing Your adjusted gross income also must be less than the amount in the above list that applies to you. Unemployment tax filing For details, see Rules 1 and 15. Unemployment tax filing Investment income amount is more. Unemployment tax filing  The maximum amount of investment income you can have and still get the credit has increased to $3,300. Unemployment tax filing See Rule 6. Unemployment tax filing Reminders Increased EIC on certain joint returns. Unemployment tax filing  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. Unemployment tax filing As a result, the EIC table has different columns for married persons filing jointly than for everyone else. Unemployment tax filing When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have. Unemployment tax filing Online help. Unemployment tax filing  You can use the EITC Assistant at www. Unemployment tax filing irs. Unemployment tax filing gov/eitc to find out if you are eligible for the credit. Unemployment tax filing The EITC Assistant is available in English and Spanish. Unemployment tax filing EIC questioned by IRS. Unemployment tax filing  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. Unemployment tax filing We will tell you what documents to send us. Unemployment tax filing These may include: birth certificates, school records, medical records, etc. Unemployment tax filing The process of establishing your eligibility will delay your refund. Unemployment tax filing Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. Unemployment tax filing A tax credit usually means more money in your pocket. Unemployment tax filing It reduces the amount of tax you owe. Unemployment tax filing The EIC may also give you a refund. Unemployment tax filing How do you get the earned income credit?   To claim the EIC, you must: Qualify by meeting certain rules, and File a tax return, even if you: Do not owe any tax, Did not earn enough money to file a return, or Did not have income taxes withheld from your pay. Unemployment tax filing When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. Unemployment tax filing Or, if you prefer, you can let the IRS figure the credit for you. Unemployment tax filing How will this chapter help you?   This chapter will explain the following. Unemployment tax filing The rules you must meet to qualify for the EIC. Unemployment tax filing How to figure the EIC. Unemployment tax filing Useful Items - You may want to see: Publication 596 Earned Income Credit (EIC) Form (and Instructions) Schedule EIC Earned Income Credit (Qualifying Child Information) 8862 Information To Claim Earned Income Credit After Disallowance Do You Qualify for the Credit? To qualify to claim the EIC, you must first meet all of the rules explained in Part A, Rules for Everyone . Unemployment tax filing Then you must meet the rules in Part B, Rules If You Have a Qualifying Child , or Part C, Rules If You Do Not Have a Qualifying Child . Unemployment tax filing There is one final rule you must meet in Part D, Figuring and Claiming the EIC . Unemployment tax filing You qualify for the credit if you meet all the rules in each part that applies to you. Unemployment tax filing If you have a qualifying child, the rules in Parts A, B, and D apply to you. Unemployment tax filing If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. Unemployment tax filing Table 36-1, Earned Income Credit in a Nutshell. Unemployment tax filing   Use Table 36–1 as a guide to Parts A, B, C, and D. Unemployment tax filing The table is a summary of all the rules in each part. Unemployment tax filing Do you have a qualifying child?   You have a qualifying child only if you have a child who meets the four tests described in Rule 8 and illustrated in Figure 36–1. Unemployment tax filing If Improper Claim Made in Prior Year If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. Unemployment tax filing You must also qualify to claim the EIC by meeting all the rules described in this chapter. Unemployment tax filing However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. Unemployment tax filing For example, if your arithmetic is incorrect, the IRS can correct it. Unemployment tax filing If you do not provide a correct social security number, the IRS can deny the EIC. Unemployment tax filing These kinds of errors are called math or clerical errors. Unemployment tax filing If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. Unemployment tax filing If your error was due to fraud, then you cannot claim the EIC for the next 10 years. Unemployment tax filing More information. Unemployment tax filing   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. Unemployment tax filing Part A. Unemployment tax filing Rules for Everyone This part of the chapter discusses Rules 1 through 7. Unemployment tax filing You must meet all seven rules to qualify for the earned income credit. Unemployment tax filing If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the chapter. Unemployment tax filing If you meet all seven rules in this part, then read either Part B or Part C (whichever applies) for more rules you must meet. Unemployment tax filing Rule 1. Unemployment tax filing Your AGI Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Unemployment tax filing Adjusted gross income (AGI). Unemployment tax filing   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). Unemployment tax filing If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Unemployment tax filing Example. Unemployment tax filing Your AGI is $38,550, you are single, and you have one qualifying child. Unemployment tax filing You cannot claim the EIC because your AGI is not less than $37,870. Unemployment tax filing However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. Unemployment tax filing Community property. Unemployment tax filing   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. Unemployment tax filing This is different from the community property rules that apply under Rule 7 . Unemployment tax filing Rule 2. Unemployment tax filing You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Unemployment tax filing Any qualifying child listed on Schedule EIC also must have a valid SSN. Unemployment tax filing (See Rule 8 if you have a qualifying child. Unemployment tax filing ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Unemployment tax filing An example of a federally funded benefit is Medicaid. Unemployment tax filing If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. Unemployment tax filing S. Unemployment tax filing citizen or permanent resident, ask the SSA for a new social security card without the legend. Unemployment tax filing U. Unemployment tax filing S. Unemployment tax filing citizen. Unemployment tax filing   If you were a U. Unemployment tax filing S. Unemployment tax filing citizen when you received your SSN, you have a valid SSN. Unemployment tax filing Valid for work only with INS or DHS authorization. Unemployment tax filing   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. Unemployment tax filing SSN missing or incorrect. Unemployment tax filing   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Unemployment tax filing Other taxpayer identification number. Unemployment tax filing   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). Unemployment tax filing ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Unemployment tax filing No SSN. Unemployment tax filing   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Unemployment tax filing You cannot claim the EIC. Unemployment tax filing Getting an SSN. Unemployment tax filing   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5, Application for a Social Security Card, with the SSA. Unemployment tax filing You can get Form SS-5 online at www. Unemployment tax filing socialsecurity. Unemployment tax filing gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Unemployment tax filing Filing deadline approaching and still no SSN. Unemployment tax filing   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Unemployment tax filing Request an automatic 6-month extension of time to file your return. Unemployment tax filing You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Unemployment tax filing S. Unemployment tax filing Individual Income Tax Return. Unemployment tax filing For more information, see chapter 1 . Unemployment tax filing File the return on time without claiming the EIC. Unemployment tax filing After receiving the SSN, file an amended return (Form 1040X, Amended U. Unemployment tax filing S. Unemployment tax filing Individual Income Tax Return) claiming the EIC. Unemployment tax filing Attach a filled-in Schedule EIC if you have a qualifying child. Unemployment tax filing Table 36-1. Unemployment tax filing Earned Income Credit in a Nutshell First, you must meet all the rules in this column. Unemployment tax filing Second, you must meet all the rules in one of these columns, whichever applies. Unemployment tax filing Third, you must meet the rule in this column. Unemployment tax filing Part A. Unemployment tax filing  Rules for Everyone Part B. Unemployment tax filing  Rules If You Have a Qualifying Child Part C. Unemployment tax filing  Rules If You Do Not Have a Qualifying Child Part D. Unemployment tax filing  Figuring and Claiming the EIC 1. Unemployment tax filing Your adjusted gross income (AGI) must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Unemployment tax filing 2. Unemployment tax filing You must have a valid social security number. Unemployment tax filing  3. Unemployment tax filing Your filing status cannot be “Married filing separately. Unemployment tax filing ” 4. Unemployment tax filing You must be a U. Unemployment tax filing S. Unemployment tax filing citizen or resident alien all year. Unemployment tax filing  5. Unemployment tax filing You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). Unemployment tax filing  6. Unemployment tax filing Your investment income must be $3,300 or less. Unemployment tax filing  7. Unemployment tax filing You must have earned income. Unemployment tax filing 8. Unemployment tax filing Your child must meet the relationship, age, residency, and joint return tests. Unemployment tax filing  9. Unemployment tax filing Your qualifying child cannot be used by more than one person to claim the EIC. Unemployment tax filing  10. Unemployment tax filing You cannot be a qualifying child of another person. Unemployment tax filing 11. Unemployment tax filing You must be at least age 25 but under age 65. Unemployment tax filing  12. Unemployment tax filing You cannot be the dependent of another person. Unemployment tax filing  13. Unemployment tax filing You cannot be a qualifying child of another person. Unemployment tax filing  14. Unemployment tax filing You must have lived in the United States more than half of the year. Unemployment tax filing 15. Unemployment tax filing Your earned income must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Unemployment tax filing Rule 3. Unemployment tax filing Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. Unemployment tax filing Your filing status cannot be “Married filing separately. Unemployment tax filing ” Spouse did not live with you. Unemployment tax filing   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. Unemployment tax filing In that case, you may be able to claim the EIC. Unemployment tax filing For detailed information about filing as head of household, see chapter 2 . Unemployment tax filing Rule 4. Unemployment tax filing You Must Be a U. Unemployment tax filing S. Unemployment tax filing Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. Unemployment tax filing You can use that filing status only if one spouse is a U. Unemployment tax filing S. Unemployment tax filing citizen or resident alien and you choose to treat the nonresident spouse as a U. Unemployment tax filing S. Unemployment tax filing resident. Unemployment tax filing If you make this choice, you and your spouse are taxed on your worldwide income. Unemployment tax filing If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). Unemployment tax filing If you need more information on making this choice, get Publication 519, U. Unemployment tax filing S. Unemployment tax filing Tax Guide for Aliens. Unemployment tax filing Rule 5. Unemployment tax filing You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Unemployment tax filing You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Unemployment tax filing U. Unemployment tax filing S. Unemployment tax filing possessions are not foreign countries. Unemployment tax filing See Publication 54, Tax Guide for U. Unemployment tax filing S. Unemployment tax filing Citizens and Resident Aliens Abroad, for more detailed information. Unemployment tax filing Rule 6. Unemployment tax filing Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. Unemployment tax filing If your investment income is more than $3,300, you cannot claim the credit. Unemployment tax filing For most people, investment income is the total of the following amounts. Unemployment tax filing Taxable interest (line 8a of Form 1040 or 1040A). Unemployment tax filing Tax-exempt interest (line 8b of Form 1040 or 1040A). Unemployment tax filing Dividend income (line 9a of Form 1040 or 1040A). Unemployment tax filing Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). Unemployment tax filing If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Unemployment tax filing However, see Rule 6 in chapter 1 of Publication 596 if: You are filing Schedule E (Form 1040), Form 4797, or Form 8814, or You are reporting income from the rental of personal property on Form 1040, line 21. Unemployment tax filing Rule 7. Unemployment tax filing You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Unemployment tax filing If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Unemployment tax filing If you are an employee, earned income includes all the taxable income you get from your employer. Unemployment tax filing If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040. Unemployment tax filing Earned Income Earned income includes all of the following types of income. Unemployment tax filing Wages, salaries, tips, and other taxable employee pay. Unemployment tax filing Employee pay is earned income only if it is taxable. Unemployment tax filing Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Unemployment tax filing But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. Unemployment tax filing Net earnings from self-employment. Unemployment tax filing Gross income received as a statutory employee. Unemployment tax filing Wages, salaries, and tips. Unemployment tax filing   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Unemployment tax filing You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Unemployment tax filing Nontaxable combat pay election. Unemployment tax filing   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Unemployment tax filing Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Unemployment tax filing Figure the credit with and without your nontaxable combat pay before making the election. Unemployment tax filing   If you make the election, you must include in earned income all nontaxable combat pay you received. Unemployment tax filing If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Unemployment tax filing In other words, if one of you makes the election, the other one can also make it but does not have to. Unemployment tax filing   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. Unemployment tax filing ” Self-employed persons and statutory employees. Unemployment tax filing   If you are self-employed or received income as a statutory employee, you must use the Form 1040 instructions to see if you qualify to get the EIC. Unemployment tax filing Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Unemployment tax filing Each approved form exempts certain income from social security taxes. Unemployment tax filing Each form is discussed here in terms of what is or is not earned income for the EIC. Unemployment tax filing Form 4361. Unemployment tax filing   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Unemployment tax filing This includes wages, salaries, tips, and other taxable employee compensation. Unemployment tax filing A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Unemployment tax filing Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Unemployment tax filing Examples include fees for performing marriages and honoraria for delivering speeches. Unemployment tax filing Form 4029. Unemployment tax filing   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Unemployment tax filing However, amounts you received as a self-employed individual do not count as earned income. Unemployment tax filing Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Unemployment tax filing Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Unemployment tax filing Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Unemployment tax filing You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Unemployment tax filing Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Unemployment tax filing Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). Unemployment tax filing Disability insurance payments. Unemployment tax filing   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Unemployment tax filing It does not matter whether you have reached minimum retirement age. Unemployment tax filing If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Unemployment tax filing ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Unemployment tax filing Do not include any of these items in your earned income. Unemployment tax filing Earnings while an inmate. Unemployment tax filing   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Unemployment tax filing This includes amounts for work performed while in a work release program or while in a halfway house. Unemployment tax filing Workfare payments. Unemployment tax filing   Nontaxable workfare payments are not earned income for the EIC. Unemployment tax filing These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if private sector employment is not available, or (2) community service program activities. Unemployment tax filing Community property. Unemployment tax filing   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. Unemployment tax filing That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Unemployment tax filing Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Unemployment tax filing Nevada, Washington, and California domestic partners. Unemployment tax filing   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Unemployment tax filing Your earned income for the EIC does not include any amount earned by your partner. Unemployment tax filing Your earned income includes the entire amount you earned. Unemployment tax filing For details, see Publication 555. Unemployment tax filing Conservation Reserve Program (CRP) payments. Unemployment tax filing   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. Unemployment tax filing Nontaxable military pay. Unemployment tax filing   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Unemployment tax filing Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Unemployment tax filing See Publication 3, Armed Forces' Tax Guide, for more information. Unemployment tax filing    Combat pay. Unemployment tax filing You can elect to include your nontaxable combat pay in earned income for the EIC. Unemployment tax filing See Nontaxable combat pay election, earlier. Unemployment tax filing Part B. Unemployment tax filing Rules If You Have a Qualifying Child If you have met all of the rules in Part A , read Part B to see if you have a qualifying child. Unemployment tax filing Part B discusses Rules 8 through 10. Unemployment tax filing You must meet all three of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit with a qualifying child. Unemployment tax filing You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Unemployment tax filing (You cannot file Form 1040EZ. Unemployment tax filing ) You also must complete Schedule EIC and attach it to your return. Unemployment tax filing If you meet all the rules in Part A and this part, read Part D to find out what to do next. Unemployment tax filing If you do not meet Rule 8, you do not have a qualifying child. Unemployment tax filing Read Part C to find out if you can get the earned income credit without a qualifying child. Unemployment tax filing Rule 8. Unemployment tax filing Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Unemployment tax filing The four tests are: Relationship, Age, Residency, and Joint return. Unemployment tax filing The four tests are illustrated in Figure 36–1. Unemployment tax filing The paragraphs that follow contain more information about each test. Unemployment tax filing Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). Unemployment tax filing The following definitions clarify the relationship test. Unemployment tax filing Adopted child. Unemployment tax filing   An adopted child is always treated as your own child. Unemployment tax filing The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Unemployment tax filing Foster child. Unemployment tax filing   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction. Unemployment tax filing An authorized placement agency includes a state or local government agency. Unemployment tax filing It also includes a tax-exempt organization licensed by a state. Unemployment tax filing In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Unemployment tax filing Example. Unemployment tax filing Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. Unemployment tax filing Debbie is your foster child. Unemployment tax filing Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during 2013, regardless of age. Unemployment tax filing    The following examples and definitions clarify the age test. Unemployment tax filing Example 1—child not under age 19. Unemployment tax filing Your son turned 19 on December 10. Unemployment tax filing Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. Unemployment tax filing Example 2—child not younger than you or your spouse. Unemployment tax filing Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Unemployment tax filing He is not disabled. Unemployment tax filing Both you and your spouse are 21 years old and you file a joint return. Unemployment tax filing Your brother is not your qualifying child because he is not younger than you or your spouse. Unemployment tax filing Example 3—child younger than your spouse but not younger than you. Unemployment tax filing The facts are the same as in Example 2 except that your spouse is 25 years old. Unemployment tax filing Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. Unemployment tax filing Student defined. Unemployment tax filing   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. Unemployment tax filing The 5 calendar months need not be consecutive. Unemployment tax filing   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Unemployment tax filing School defined. Unemployment tax filing   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Unemployment tax filing However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Unemployment tax filing Vocational high school students. Unemployment tax filing   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Unemployment tax filing Permanently and totally disabled. Unemployment tax filing   Your child is permanently and totally disabled if both of the following apply. Unemployment tax filing He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Unemployment tax filing A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Unemployment tax filing Residency Test Your child must have lived with you in the United States for more than half of 2013. Unemployment tax filing The following definitions clarify the residency test. Unemployment tax filing United States. Unemployment tax filing   This means the 50 states and the District of Columbia. Unemployment tax filing It does not include Puerto Rico or U. Unemployment tax filing S. Unemployment tax filing possessions such as Guam. Unemployment tax filing Homeless shelter. Unemployment tax filing   Your home can be any location where you regularly live. Unemployment tax filing You do not need a traditional home. Unemployment tax filing For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. Unemployment tax filing Military personnel stationed outside the United States. Unemployment tax filing    U. Unemployment tax filing S. Unemployment tax filing military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Unemployment tax filing Figure 36-1. Unemployment tax filing Tests for Qualifying Child Please click here for the text description of the image. Unemployment tax filing Qualifying child Extended active duty. Unemployment tax filing   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Unemployment tax filing Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Unemployment tax filing Birth or death of a child. Unemployment tax filing   A child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. Unemployment tax filing Temporary absences. Unemployment tax filing   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Unemployment tax filing Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Unemployment tax filing Kidnapped child. Unemployment tax filing    A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. Unemployment tax filing The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or your child's family. Unemployment tax filing This treatment applies for all years until the child is returned. Unemployment tax filing However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. Unemployment tax filing   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Unemployment tax filing Joint Return Test To meet this test, the child cannot file a joint return for the year. Unemployment tax filing Exception. Unemployment tax filing   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Unemployment tax filing Example 1—child files joint return. Unemployment tax filing You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Unemployment tax filing He earned $25,000 for the year. Unemployment tax filing The couple files a joint return. Unemployment tax filing Because your daughter and her husband filed a joint return, she is not your qualifying child. Unemployment tax filing Example 2—child files joint return only to claim a refund of withheld tax. Unemployment tax filing Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Unemployment tax filing They do not have a child. Unemployment tax filing Neither is required to file a tax return. Unemployment tax filing Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. Unemployment tax filing The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Unemployment tax filing Example 3—child files joint return to claim American opportunity credit. Unemployment tax filing The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Unemployment tax filing He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Unemployment tax filing Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Unemployment tax filing The exception to the joint return test does not apply, so your son is not your qualifying child. Unemployment tax filing Married child. Unemployment tax filing   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) , described later. Unemployment tax filing Social security number. Unemployment tax filing   The qualifying child must have a valid social security number (SSN) unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. Unemployment tax filing You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), which is issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Unemployment tax filing   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. Unemployment tax filing For more information about SSNs, see Rule 2 . Unemployment tax filing Rule 9. Unemployment tax filing Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. Unemployment tax filing However, only one of these persons can actually treat the child as a qualifying child. Unemployment tax filing Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Unemployment tax filing The exemption for the child. Unemployment tax filing The child tax credit. Unemployment tax filing Head of household filing status. Unemployment tax filing The credit for child and dependent care expenses. Unemployment tax filing The exclusion for dependent care benefits. Unemployment tax filing The EIC. Unemployment tax filing The other person cannot take any of these benefits based on this qualifying child. Unemployment tax filing In other words, you and the other person cannot agree to divide these tax benefits between you. Unemployment tax filing The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Unemployment tax filing The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Unemployment tax filing However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Unemployment tax filing Tiebreaker rules. Unemployment tax filing   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. Unemployment tax filing If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Unemployment tax filing If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Unemployment tax filing If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Unemployment tax filing If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Unemployment tax filing If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Unemployment tax filing If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Unemployment tax filing If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. Unemployment tax filing See Example 8 . Unemployment tax filing   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Unemployment tax filing See Examples 1 through 13 . Unemployment tax filing   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in Part C for people who do not have a qualifying child. Unemployment tax filing If the other person cannot claim the EIC. Unemployment tax filing   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. Unemployment tax filing See Examples 6 and 7 . Unemployment tax filing But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier. Unemployment tax filing Examples. Unemployment tax filing The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Unemployment tax filing Example 1. Unemployment tax filing You and your 2-year-old son Jimmy lived with your mother all year. Unemployment tax filing You are 25 years old, unmarried, and your AGI is $9,000. Unemployment tax filing Your only income was $9,000 from a part-time job. Unemployment tax filing Your mother's only income was $20,000 from her job, and her AGI is $20,000. Unemployment tax filing Jimmy's father did not live with you or Jimmy. Unemployment tax filing The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Unemployment tax filing Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. Unemployment tax filing However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier for which that person qualifies). Unemployment tax filing He is not a qualifying child of anyone else, including his father. Unemployment tax filing If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). Unemployment tax filing Example 2. Unemployment tax filing The facts are the same as in Example 1 except your AGI is $25,000. Unemployment tax filing Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Unemployment tax filing Only you can claim him. Unemployment tax filing Example 3. Unemployment tax filing The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Unemployment tax filing In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. Unemployment tax filing The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. Unemployment tax filing Example 4. Unemployment tax filing The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. Unemployment tax filing Only one of you can claim each child. Unemployment tax filing However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Unemployment tax filing For example, if you claim one child, your mother can claim the other two. Unemployment tax filing Example 5. Unemployment tax filing The facts are the same as in Example 1 except that you are only 18 years old. Unemployment tax filing This means you are a qualifying child of your mother. Unemployment tax filing Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. Unemployment tax filing Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Unemployment tax filing If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. Unemployment tax filing Example 6. Unemployment tax filing The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Unemployment tax filing Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Unemployment tax filing Example 7. Unemployment tax filing The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Unemployment tax filing Your earned income is too high for you to claim the EIC. Unemployment tax filing But your mother cannot claim the EIC either, because her AGI is not higher than yours. Unemployment tax filing Example 8. Unemployment tax filing The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have an AGI of $30,000 on a joint return. Unemployment tax filing If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. Unemployment tax filing Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. Unemployment tax filing In other words, each parent's AGI can be treated as $15,000. Unemployment tax filing Example 9. Unemployment tax filing You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Unemployment tax filing In August and September, Joey lived with you. Unemployment tax filing For the rest of the year, Joey lived with your husband, who is Joey's father. Unemployment tax filing Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. Unemployment tax filing At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. Unemployment tax filing You and your husband will file separate returns. Unemployment tax filing Your husband agrees to let you treat Joey as a qualifying child. Unemployment tax filing This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. Unemployment tax filing However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Unemployment tax filing See Rule 3 . Unemployment tax filing Example 10. Unemployment tax filing The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Unemployment tax filing In this case, only your husband will be allowed to treat Joey as a qualifying child. Unemployment tax filing This is because, during 2013, the boy lived with him longer than with you. Unemployment tax filing You cannot claim the EIC (either with or without a qualifying child). Unemployment tax filing However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. Unemployment tax filing See Rule 3 . Unemployment tax filing Example 11. Unemployment tax filing You, your 5-year-old son and your son's father lived together all year. Unemployment tax filing You and your son's father are not married. Unemployment tax filing Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. Unemployment tax filing Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Unemployment tax filing Neither of you had any other income. Unemployment tax filing Your son's father agrees to let you treat the child as a qualifying child. Unemployment tax filing This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. Unemployment tax filing Example 12. Unemployment tax filing The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. Unemployment tax filing In this case, only your son's father will be allowed to treat your son as a qualifying child. Unemployment tax filing This is because his AGI, $14,000, is more than your AGI, $12,000. Unemployment tax filing You cannot claim the EIC (either with or without a qualifying child). Unemployment tax filing Example 13. Unemployment tax filing You and your 7-year-old niece, your sister's child, lived with your mother all year. Unemployment tax filing You are 25 years old, and your AGI is $9,300. Unemployment tax filing Your only income was from a part-time job. Unemployment tax filing Your mother's AGI is $15,000. Unemployment tax filing Her only income was from her job. Unemployment tax filing Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Unemployment tax filing Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. Unemployment tax filing However, only your mother can treat her as a qualifying child. Unemployment tax filing This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Unemployment tax filing Special rule for divorced or separated parents (or parents who live apart). Unemployment tax filing   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. Unemployment tax filing The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of 2013, whether or not they are or were married. Unemployment tax filing The child received over half of his or her support for the year from the parents. Unemployment tax filing The child is in the custody of one or both parents for more than half of 2013. Unemployment tax filing Either of the following statements is true. Unemployment tax filing The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. Unemployment tax filing If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Unemployment tax filing A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. Unemployment tax filing  For details, see chapter 3. Unemployment tax filing Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. Unemployment tax filing Applying Rule 9 to divorced or separated parents (or parents who live apart). Unemployment tax filing   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Unemployment tax filing However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. Unemployment tax filing If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. Unemployment tax filing Example 1. Unemployment tax filing You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Unemployment tax filing Your AGI is $10,000. Unemployment tax filing Your mother’s AGI is $25,000. Unemployment tax filing Your son's father did not live with you or your son. Unemployment tax filing Under the special rule for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. Unemployment tax filing However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. Unemployment tax filing You and your mother did not have any child care expenses or dependent care benefits. Unemployment tax filing If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. Unemployment tax filing Example 2. Unemployment tax filing The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Unemployment tax filing Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Unemployment tax filing Example 3. Unemployment tax filing The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. Unemployment tax filing Your mother also claims him as a qualifying child for head of household filing status. Unemployment tax filing You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Unemployment tax filing The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Unemployment tax filing Rule 10. Unemployment tax filing You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Unemployment tax filing ) if all of the following statements are true. Unemployment tax filing You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Unemployment tax filing Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Unemployment tax filing You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Unemployment tax filing You lived with that person in the United States for more than half of the year. Unemployment tax filing You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Unemployment tax filing For more details about the tests to be a qualifying child, see Rule 8 . Unemployment tax filing If you are a qualifying child of another taxpayer, you cannot claim the EIC. Unemployment tax filing This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Unemployment tax filing Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Unemployment tax filing Example. Unemployment tax filing You and your daughter lived with your mother all year. Unemployment tax filing You are 22 years old, unmarried, and attended a trade school full time. Unemployment tax filing You had a part-time job and earned $5,700. Unemployment tax filing You had no other income. Unemployment tax filing Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Unemployment tax filing She can claim the EIC if she meets all the other requirements. Unemployment tax filing Because you are your mother's qualifying child, you cannot claim the EIC. Unemployment tax filing This is so even if your mother cannot or does not claim the EIC. Unemployment tax filing Child of person not required to file a return. Unemployment tax filing   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Unemployment tax filing Example. Unemployment tax filing The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Unemployment tax filing As a result, you are not your mother's qualifying child. Unemployment tax filing You can claim the EIC if you meet all the other requirements to do so. Unemployment tax filing   See Rule 10 in Publication 596 for additional examples. Unemployment tax filing Part C. Unemployment tax filing Rules If You Do Not Have a Qualifying Child Read this part if you: Do not have a qualifying child, and Have met all the rules in Part A . Unemployment tax filing  Part C discusses Rules 11 through 14. Unemployment tax filing You must meet all four of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit without a qualifying child. Unemployment tax filing If you have a qualifying child, the rules in this part do not apply to you. Unemployment tax filing You can claim the credit only if you meet all the rules in Parts A, B, and D. Unemployment tax filing See Rule 8 to find out if you have a qualifying child. Unemployment tax filing Rule 11. Unemployment tax filing You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. Unemployment tax filing If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. Unemployment tax filing It does not matter which spouse meets the age test, as long as one of the spouses does. Unemployment tax filing You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Unemployment tax filing If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. Unemployment tax filing If neither you nor your spouse meets the age test, you cannot claim the EIC. Unemployment tax filing Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Unemployment tax filing Death of spouse. Unemployment tax filing   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. Unemployment tax filing Example 1. Unemployment tax filing You are age 28 and unmarried. Unemployment tax filing You meet the age test. Unemployment tax filing Example 2—spouse meets age test. Unemployment tax filing You are married and filing a joint return. Unemployment tax filing You are age 23 and your spouse is age 27. Unemployment tax filing You meet the age test because your spouse is at least age 25 but under age 65. Unemployment tax filing Example 3—spouse dies in 2013. Unemployment tax filing You are married and filing a joint return with your spouse who died in August 2013. Unemployment tax filing You are age 67. Unemployment tax filing Your spouse would have become age 65 in November 2013. Unemployment tax filing Because your spouse was under age 65 when she died, you meet the age test. Unemployment tax filing Rule 12. Unemployment tax filing You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. Unemployment tax filing If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. Unemployment tax filing If you are not sure whether someone else can claim you (or your spouse, if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3. Unemployment tax filing If someone else can claim you (or your spouse, if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit. Unemployment tax filing Example 1. Unemployment tax filing In 2013, you were age 25, single, and living at home with your parents. Unemployment tax filing You worked and were not a student. Unemployment tax filing You earned $7,500. Unemployment tax filing Your parents cannot claim you as a dependent. Unemployment tax filing When you file your return, you claim an exemption for yourself by not checking the “You” box on line 5 of your Form 1040EZ and by entering $10,000 on that line. Unemployment tax filing You meet this rule. Unemployment tax filing You can claim the EIC if you meet all the other requirements. Unemployment tax filing Example 2. Unemployment tax filing The facts are the same as in Example 1 , except that you earned $2,000. Unemployment tax filing Your parents can claim you as a dependent but decide not to. Unemployment tax filing You do not meet this rule. Unemployment tax filing You cannot claim the credit because your parents could have claimed you as a dependent. Unemployment tax filing Joint returns. Unemployment tax filing   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Unemployment tax filing   However, another person may be able to claim you as a dependent if you and your spouse file a joint return only to get a refund of income tax withheld or estimated tax paid. Unemployment tax filing But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Unemployment tax filing Example 1. Unemployment tax filing You are 26 years old. Unemployment tax filing You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Unemployment tax filing Neither you nor your wife is required to file a tax return. Unemployment tax filing You do not have a child. Unemployment tax filing Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. Unemployment tax filing Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Unemployment tax filing They can claim exemptions for you and your wife if all the other tests to do so are met. Unemployment tax filing Example 2. Unemployment tax filing The facts are the same as in Example 1 except no taxes were taken out of your pay. Unemployment tax filing Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. Unemployment tax filing Because claiming the EIC is your reason for filing the return, you are not filing it only to get a refund of income tax withheld or estimated tax paid. Unemployment tax filing Your parents cannot claim an exemption for either you or your wife. Unemployment tax filing Rule 13. Unemployment tax filing You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Unemployment tax filing ) if all of the following statements are true. Unemployment tax filing You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Unemployment tax filing Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Unemployment tax filing You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student (as defined in Rule 8 ), and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Unemployment tax filing You lived with that person in the United States for more than half of the year. Unemployment tax filing You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Unemployment tax filing For more details about the tests to be a qualifying child, see Rule 8 . Unemployment tax filing If you are a qualifying child of another taxpayer, you cannot claim the EIC. Unemployment tax filing This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Unemployment tax filing Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Unemployment tax filing Example. Unemployment tax filing You lived with your mother all year. Unemployment tax filing You are age 26, unmarried, and permanently and totally disabled. Unemployment tax filing Your only income was from a community center where you went three days a week to answer telephones. Unemployment tax filing You earned $5,000 for the year and provided more than half of your own support. Unemployment tax filing Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Unemployment tax filing She can claim the EIC if she meets all the other requirements. Unemployment tax filing Because you are a qualifying child of your mother, you cannot claim the EIC. Unemployment tax filing This is so even if your mother cannot or does not claim the EIC. Unemployment tax filing Joint returns. Unemployment tax filing   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Unemployment tax filing   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return for the year only to get a refund of income tax withheld or estimated tax paid. Unemployment tax filing But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Unemployment tax filing Child of person not required to file a return. Unemployment tax filing   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Unemployment tax filing Example. Unemployment tax filing You lived all year with your father. Unemployment tax filing You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Unemployment tax filing You have no other income, no children, and provided more than half of your own support. Unemployment tax filing Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Unemployment tax filing As a result, you are not your father's qualifying child. Unemployment tax filing You can claim the EIC if you meet all the other requirements to do so. Unemployment tax filing   See Rule 13 in Publication 596 for additional examples. Unemployment tax filing Rule 14. Unemployment tax filing You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. Unemployment tax filing If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Unemployment tax filing United States. Unemployment tax filing   This means the 50 states and the District of Columbia. Unemployment tax filing It does not include Puerto Rico or U. Unemployment tax filing S. Unemployment tax filing possessions such as Guam. Unemployment tax filing Homeless shelter. Unemployment tax filing   Your home can be any location where you regularly live. Unemployment tax filing You do not need a traditional home. Unemployment tax filing If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Unemployment tax filing Military personnel stationed outside the United States. Unemployment tax filing   U. Unemployment tax filing S. Unemployment tax filing military personnel stationed outside the United States on extended active duty (defined in Rule 8 ) are considered to live in the United States during that duty period for purposes of the EIC. Unemployment tax filing Part D. Unemployment tax filing Figuring and Claiming the EIC Read this part if you have met all the rules in Parts A and B, or all the rules in Parts A and C. Unemployment tax filing Part D discusses Rule 15 . Unemployment tax filing You must meet this rule, in addition to the rules in Parts A and B , or Parts A and C , to qualify for the earned income credit. Unemployment tax filing This part of the chapter also explains how to figure the amount of your credit. Unemployment tax filing You have two choices. Unemployment tax filing Have the IRS figure the EIC for you. Unemployment tax filing If you want to do this, see IRS Will Figure the EIC for You . Unemployment tax filing Figure the EIC yourself. Unemployment tax filing If you want to do this, see How To Figure the EIC Yourself . Unemployment tax filing Rule 15. Unemployment tax filing Your Earned Income Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Unemployment tax filing Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Unemployment tax filing Employee pay is earned income only if it is taxable. Unemployment tax filing Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Unemployment tax filing But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Unemployment tax filing Earned income is explained in detail in Rule 7 . Unemployment tax filing Figuring earned income. Unemployment tax filing   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. Unemployment tax filing   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. Unemployment tax filing   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Unemployment tax filing You will then reduce that amount by any amount included on that line and described in the following list: Scholarship or fellowship grants not reported on a Form W-2, Inmate's income, and Pension or annuity from deferred compensation plans. Unemployment tax filing Scholarship or fellowship grants not reported on a Form W-2. Unemployment tax filing   A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. Unemployment tax filing Inmate's income. Unemployment tax filing   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Unemployment tax filing This includes amounts received for work performed while in a work release program or while in a halfway house. Unemployment tax filing If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Unemployment tax filing Pension or annuity from deferred compensation plans. Unemployment tax filing   A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. Unemployment tax filing If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Unemployment tax filing This amount may be reported in box 11 of your Form W-2. Unemployment tax filing If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. Unemployment tax filing Clergy. Unemployment tax filing   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also reported on line 7 (Form 1040), subtract that amount from the amount on line 7 (Form 1040) and enter the result in the first space of the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b. Unemployment tax filing Put “Clergy” on the dotted line next to line 64a (Form 1040). Unemployment tax filing Church employees. Unemployment tax filing    A church employee means an employee (other than a minister or member of a religious order) of a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. Unemployment tax filing If you received wages as a