Publication 501 |
2008 Tax Year |
Publication 501 - Main Content
If you are a U.S. citizen or resident alien, whether you must file a federal income tax return depends on your gross income,
your filing status, your age, and whether you are a dependent. For details, see Table 1 and Table 2. You also must file if one of the situations described in Table 3 applies. The filing requirements apply even if you owe no tax.
You may have to pay a penalty if you are required to file a return but fail to do so. If you willfully fail to file a return,
you may be subject to criminal prosecution.
For information on what form to use — Form 1040EZ, Form 1040A, or Form 1040 — see the instructions in your tax package.
Gross income.
Gross income is all income you receive in the form of money, goods, property, and services that is not exempt from
tax. If you are married and live with your spouse in a community property state, half of any income defined by state law as
community income may be considered yours. For a list of community property states, see
Community property states
under
Married Filing Separately,
later.
Self-employed persons.
If you are self-employed in a business that provides services (where products are not a factor), your gross income
from that business is the gross receipts. If you are self-employed in a business involving manufacturing, merchandising, or
mining, your gross income from that business is the total sales minus the cost of goods sold. To this figure, you add any
income from investments and from incidental or outside operations or sources.
You must file Form 1040 if you owe any self-employment tax.
Filing status.
Your filing status generally depends on whether you are single or married. In some cases, it depends on other factors
as well. Whether you are single or married is determined as of the last day of your tax year, which is December 31 for most
taxpayers. Filing status is discussed in detail later in this publication.
Age.
Age is a factor in determining if you must file a return only if you are 65 or older at the end of your tax year.
For 2008, you are 65 or older if you were born before January 2, 1944.
Filing Requirements for Most Taxpayers
You must file a return if your gross income for the year was at least the amount shown on the appropriate line in Table 1. Dependents should seeTable 2 instead.
You must file an income tax return for a decedent (a person who died) if both of the following are true.
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You are the surviving spouse, executor, administrator, or legal representative.
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The decedent met the filing requirements described in this publication at the time of his or her death.
For more information, see Final Return for Decedent in Publication 559.
Table 2.2008 Filing Requirements for Dependents
If your parent (or someone else) can claim you as a dependent, use this table to see if you must file a return. |
In this table, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes
unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from
a trust. Earned income includes wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income
is the total of your unearned and earned income.
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Caution.If your gross income was $3,500 or more, you usually cannot be claimed as a dependent unless you are a qualifying child. For
details, see Exemptions for Dependents.
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Single dependents— Were you either age 65 or older or blind?
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No. You must file a return if any of the following apply.
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Your unearned income was more than $900.
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Your earned income was more than $5,450.
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Your gross income was more than the larger of —
-
$900, or
-
Your earned income (up to $5,150) plus $300.
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Yes. You must file a return if any of the following apply.
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Your unearned income was more than $2,250 ($3,600 if 65 or older and blind).
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Your earned income was more than $6,800 ($8,150 if 65 or older and blind).
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Your gross income was more than the larger of–
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$2,250 ($3,600 if 65 or older and blind), or
-
Your earned income (up to $5,150) plus $1,650 ($3,000 if 65 or older and blind).
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Married dependents—Were you either age 65 or older or blind?
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No. You must file a return if any of the following apply.
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Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
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Your unearned income was more than $900.
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Your earned income was more than $5,450.
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Your gross income was more than the larger of —
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$900, or
-
Your earned income (up to $5,150) plus $300.
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Yes. You must file a return if any of the following apply.
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Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
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Your unearned income was more than $1,950 ($3,000 if 65 or older and blind).
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Your earned income was more than $6,500 ($7,550 if 65 or older and blind).
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Your gross income was more than the larger of–
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$1,950 ($3,000 if 65 or older and blind), or
-
Your earned income (up to $5,150) plus $1,350 ($2,400 if 65 or older and blind).
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U.S. Citizens or Resident Aliens Living Abroad
For purposes of determining whether you must file a return, you must include in your gross income all of the income you earned
or received abroad, including any income you can exclude under the foreign earned income exclusion. For more information on
special tax rules that may apply to you, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.
Generally, if you are a U.S. citizen and a bona fide resident of Puerto Rico, you must file a U.S. income tax return if you
meet the income requirements. This is in addition to any legal requirement you may have to file an income tax return with
Puerto Rico.
If you are a bona fide resident of Puerto Rico for the whole year, your U.S. gross income does not include income from sources
within Puerto Rico. However, include in your U.S. gross income any income you received for your services as an employee of
the United States or any U.S. agency. If you receive income from Puerto Rican sources that is not subject to U.S. tax, you
must reduce your standard deduction, which reduces the amount of income you can have before you must file a U.S. income tax
return.
For more information, see Publication 570, Tax Guide for Individuals With Income From U.S. Possessions.
Individuals With Income From U.S. Possessions
If you had income from Guam, the Commonwealth of Northern Mariana Islands, American Samoa, or the U.S. Virgin Islands, special
rules may apply when determining whether you must file a U.S. federal income tax return. In addition, you may have to file
a return with the individual possession government. See Publication 570 for more information.
A person who is a dependent may still have to file a return. This depends on the amount of the dependent's earned income,
unearned income, and gross income. For details, see Table 2. A dependent may also have to file if one of the situations described
in Table 3 applies.
Responsibility of parent.
If a dependent child who must file an income tax return cannot file it for any reason, such as age, a parent, guardian,
or other legally responsible person must file it for the child. If the child cannot sign the return, the parent or guardian
must sign the child's name followed by the words “ By (your signature), parent for minor child.”
Earned income.
This is salaries, wages, professional fees, and other amounts received as pay for work you actually perform. Earned income
(only for purposes of filing requirements and the standard deduction) also includes any part of a scholarship that you must
include in your gross income. See chapter 1 of Publication 970, Tax Benefits for Education, for more information on taxable
and nontaxable scholarships.
Child's earnings.
Amounts a child earns by performing services are his or her gross income. This is true even if under local law the
child's parents have the right to the earnings and may actually have received them. If the child does not pay the tax due
on this income, the parent is liable for the tax.
Unearned income.
This is income such as interest, dividends, and capital gains. Trust distributions of interest, dividends, capital
gains, and survivor annuities are considered unearned income also.
Election to report child's unearned income on parent's return.
You may be able to include your child's interest and dividend income on your tax return. If you choose to do this, your child
will not have to file a return. However, all of the following conditions must be met.
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Your child was under age 19 (or under age 24 if a full-time student). (A child born on January 1, 1990, is considered to be
age 19 at the end of 2008; you cannot make the election for this child unless the child was a full-time student. Similarly,
a child born on January 1, 1985, is considered to be age 24 at the end of 2008; you cannot make the election for this child.)
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Your child had gross income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund
dividends).
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The interest and dividend income was less than $9,000.
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Your child is required to file a return for 2008 unless you make this election.
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Your child does not file a joint return for 2008.
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No estimated tax payment was made for 2008 and no 2007 overpayment was applied to 2008 under your child's name and social
security number.
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No federal income tax was withheld from your child's income under the backup withholding rules.
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You are the parent whose return must be used when making the election to report your child's unearned income.
For more information, see Form 8814 and Parent's Election To Report Child's Interest and Dividends in Publication 929.
You may have to file a tax return even if your gross income is less than the amount shown in Table 1 or Table 2 for your filing status. See Table 3 for those other situations when you must file.
Table 3.Other Situations When You Must File a 2008 Return
If any of the four conditions listed below applied to you for 2008, you must file a return. |
1. |
You owe any special taxes, including any of the following. |
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a. |
Alternative minimum tax. (See the Form 1040 instructions for line 45.) |
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b. |
Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. (See
Publication 590, Individual Retirement Arrangements (IRAs), and Publication 969, Health Savings Accounts and Other Tax-Favored
Health Plans.) But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.
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c. |
Social security or Medicare tax on tips you did not report to your employer (see Publication 531, Reporting Tip Income) or
on wages you received from an employer who did not withhold these taxes (see Form 8919).
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d. |
Write-in taxes, including uncollected social security, Medicare, or railroad retirement tax on tips you reported to your employer
or on group-term life insurance and additional tax on health savings accounts. (See Publication 531, Publication 969, and
the Form 1040 instructions for line 61.)
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e. |
Household employment taxes. But if you are filing a return only because you owe these taxes, you can file Schedule H by itself. |
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f. |
Recapture taxes. (See the Form 1040 instructions for lines 44 and 61.) |
2. |
You received any advance earned income credit (EIC) payments from your employer. These payments should be shown in box 9 of
your Form W-2. (See Publication 596, Earned Income Credit (EIC).)
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3. |
You had net earnings from self-employment of at least $400. (See Schedule SE (Form 1040) and its instructions.) |
4. |
You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social
security and Medicare taxes. (See Schedule SE (Form 1040) and its instructions.)
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Even if you do not have to file, you should file a tax return if you can get money back. For example, you should file if one
of the following applies.
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You had income tax withheld from your pay.
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You made estimated tax payments for the year or had any of your overpayment for last year applied to this year's estimated
tax.
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You qualify for the earned income credit. See Publication 596, Earned Income Credit (EIC), for more information.
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You qualify for the additional child tax credit. See the instructions in your tax forms package for more information on this
credit.
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You qualify for the health coverage tax credit. For information about this credit, see Form 8885, Health Coverage Tax Credit.
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You qualify for the refundable credit for prior year minimum tax. See Form 8801, Credit for Prior Year Minimum Tax — Individuals,
Estates, and Trusts.
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You qualify for the recovery rebate credit. See the instructions in your tax forms package for information about this credit.
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You qualify for the first-time homebuyer credit. See Form 5405, First-Time Homebuyer Credit.
You must determine your filing status before you can determine your filing requirements, standard deduction (discussed later),
and correct tax. You figure your correct tax by using the section of the Tax Computation Worksheet or the column in the Tax
Table that applies to your filing status.
You also use your filing status in determining whether you are eligible to claim certain other deductions and credits.
There are five filing statuses:
If more than one filing status applies to you, choose the one that will give you the lowest tax.
In general, your filing status depends on whether you are considered unmarried or married. For federal tax purposes, a marriage
means only a legal union between a man and a woman as husband and wife.
Unmarried persons.
You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally
separated from your spouse under a divorce or separate maintenance decree.
State law governs whether you are married or legally separated under a divorce or separate maintenance decree.
Divorced persons.
If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole
year.
Divorce and remarriage.
If you obtain a divorce in one year for the sole purpose of filing tax returns as unmarried individuals, and at the
time of divorce you intended to and did remarry each other in the next tax year, you and your spouse must file as married
individuals.
Annulled marriages.
If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried
even if you filed joint returns for earlier years. You must file amended returns (Form 1040X) claiming single or head of household
status for all tax years affected by the annulment that are not closed by the statute of limitations for filing a tax return.
The statute of limitations generally does not expire until 3 years after your original return was filed.
Married persons.
If you are considered married for the whole year, you and your spouse can file a joint return, or you can file separate
returns.
Considered married.
You are considered married for the whole year if on the last day of your tax year you and your spouse meet any one
of the following tests.
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You are married and living together as husband and wife.
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You are living together in a common law marriage that is recognized in the state where you now live or in the state where
the common law marriage began.
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You are married and living apart, but not legally separated under a decree of divorce or separate maintenance.
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You are separated under an interlocutory (not final) decree of divorce. For purposes of filing a joint return, you are not
considered divorced.
Spouse died during the year.
If your spouse died during the year, you are considered married for the whole year for filing status purposes.
If you did not remarry before the end of the tax year, you can file a joint return for yourself and your deceased
spouse. For the next 2 years, you may be entitled to the special benefits described later under
Qualifying Widow(er) With Dependent Child
.
If you remarried before the end of the tax year, you can file a joint return with your new spouse. Your deceased spouse's
filing status is married filing separately for that year.
Married persons living apart.
If you live apart from your spouse and meet certain tests, you may be considered unmarried. If this applies to you,
you can file as head of household even though you are not divorced or legally separated. If you qualify to file as head of
household instead of as married filing separately, your standard deduction will be higher. Also, your tax may be lower, and
you may be able to claim the earned income credit. See
Head of Household
, later.
Your filing status is single if, on the last day of the year, you are unmarried or legally separated from your spouse under
a divorce or separate maintenance decree, and you do not qualify for another filing status. To determine your marital status
on the last day of the year, see
Marital Status
, earlier.
Widow(er).
Your filing status may be single if you were widowed before January 1, 2008, and did not remarry before the end of
2008. However, you might be able to use another filing status that will give you a lower tax. See
Head of Household
and
Qualifying Widow(er) With Dependent Child
, later, to see if you qualify.
How to file.
You can file Form 1040EZ (if you have no dependents, are under 65 and not blind, and meet other requirements), Form
1040A, or Form 1040. If you file Form 1040A or Form 1040, show your filing status as single by checking the box on line 1.
Use the Single column of the Tax Table, or Section A of the Tax Computation Worksheet, to figure your tax.
You can choose married filing jointly as your filing status if you are married and both you and your spouse agree to file
a joint return. On a joint return, you report your combined income and deduct your combined allowable expenses. You can file
a joint return even if one of you had no income or deductions.
If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses.
Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that
do not apply to other filing statuses.
If you and your spouse each have income, you may want to figure your tax both on a joint return and on separate returns (using
the filing status of married filing separately). You can choose the method that gives the two of you the lower combined tax.
How to file.
If you file as married filing jointly, you can use Form 1040 or Form 1040A. If you have no dependents, are under 65
and not blind, and meet other requirements, you can file Form 1040EZ. If you file Form 1040 or Form 1040A, show this filing
status by checking the box on line 2. Use the Married filing jointly column of the Tax Table, or Section B of the Tax Computation Worksheet, to figure your tax.
Spouse died during the year.
If your spouse died during the year, you are considered married for the whole year and can choose married filing jointly
as your filing status. See
Spouse died during the year
, under
Married persons
, earlier.
Divorced persons.
If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year
and you cannot choose married filing jointly as your filing status.
Both you and your spouse must include all of your income, exemptions, and deductions on your joint return.
Accounting period.
Both of you must use the same accounting period, but you can use different accounting methods.
Joint responsibility.
Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your
joint return. One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse.
Divorced taxpayer.
You may be held jointly and individually responsible for any tax, interest, and penalties due on a joint return filed
before your divorce. This responsibility may apply even if your divorce decree states that your former spouse will be responsible
for any amounts due on previously filed joint returns.
Relief from joint responsibility.
In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return for
items of the other spouse which were incorrectly reported on the joint return. You can ask for relief no matter how small
the liability.
There are three types of relief available.
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Innocent spouse relief.
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Separation of liability, which applies to joint filers who are divorced, widowed, legally separated, or who have not lived
together for the 12 months ending on the date election of this relief is filed.
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Equitable relief.
You must file Form 8857, Request for Innocent Spouse Relief, to request any of these kinds of relief. Publication 971, Innocent
Spouse Relief, explains these kinds of relief and who may qualify for them.
Signing a joint return.
For a return to be considered a joint return, both husband and wife generally must sign the return.
Spouse died before signing.
If your spouse died before signing the return, the executor or administrator must sign the return for your spouse.
If neither you nor anyone else has yet been appointed as executor or administrator, you can sign the return for your spouse
and enter “ Filing as surviving spouse” in the area where you sign the return.
Spouse away from home.
If your spouse is away from home, you should prepare the return, sign it, and send it to your spouse to sign so that
it can be filed on time.
Injury or disease prevents signing.
If your spouse cannot sign because of injury or disease and tells you to sign, you can sign your spouse's name in
the proper space on the return followed by the words “ By (your name), Husband (or Wife).” Be sure to also sign in the space provided for your signature. Attach a dated statement, signed by you, to the return. The
statement should include the form number of the return you are filing, the tax year, the reason your spouse cannot sign, and
that your spouse has agreed to your signing for him or her.
Signing as guardian of spouse.
If you are the guardian of your spouse who is mentally incompetent, you can sign the return for your spouse as guardian.
Spouse in combat zone.
If your spouse is unable to sign the return because he or she is serving in a combat zone (such as the Persian Gulf
area, Yugoslavia, or Afghanistan), or a qualified hazardous duty area (Bosnia and Herzegovina, Croatia, or Macedonia), and
you do not have a power of attorney or other statement, you can sign for your spouse. Attach a signed statement to your return
that explains that your spouse is serving in a combat zone. For more information on special tax rules for persons who are
serving in a combat zone, or who are in missing status as a result of serving in a combat zone, see Publication 3, Armed Forces'
Tax Guide.
Other reasons spouse cannot sign.
If your spouse cannot sign the joint return for any other reason, you can sign for your spouse only if you are given
a valid power of attorney (a legal document giving you permission to act for your spouse). Attach the power of attorney (or
a copy of it) to your tax return. You can use Form 2848.
Nonresident alien or dual-status alien.
A joint return generally cannot be filed if either spouse is a nonresident alien at any time during the tax year.
However, if one spouse was a nonresident alien or dual-status alien who was married to a U.S. citizen or resident alien at
the end of the year, the spouses can choose to file a joint return. If you do file a joint return, you and your spouse are
both treated as U.S. residents for the entire tax year. See chapter 1 of Publication 519.
Married Filing Separately
You can choose married filing separately as your filing status if you are married. This filing status may benefit you if you
want to be responsible only for your own tax or if it results in less tax than filing a joint return.
If you and your spouse do not agree to file a joint return, you have to use this filing status unless you qualify for head
of household status, discussed next.
You may be able to choose head of household filing status if you live apart from your spouse, meet certain tests, and are
considered unmarried (explained later, under
Head of Household
). This can apply to you even if you are not divorced or legally separated. If you qualify to file as head of household, instead
of as married filing separately, your tax may be lower, you may be able to claim the earned income credit and certain other
credits, and your standard deduction will be higher. The head of household filing status allows you to choose the standard
deduction even if your spouse chooses to itemize deductions. See
Head of Household
, later, for more information.
Unless you are required to file separately, you should figure your tax both ways (on a joint return and on separate returns).
This way you can make sure you are using the filing status that results in the lowest combined tax. However, you will generally
pay more combined tax on separate returns than you would on a joint return for the reasons listed under Special Rules, later.
How to file.
If you file a separate return, you generally report only your own income, exemptions, credits, and deductions on your
individual return. You can claim an exemption for your spouse if your spouse had no gross income and was not the dependent
of another person. However, if your spouse had any gross income or was the dependent of someone else, you cannot claim an
exemption for him or her on your separate return.
If you file as married filing separately, you can use Form 1040A or Form 1040. Select this filing status by checking
the box on line 3 of either form. You also must enter your spouse's full name in the space provided and must enter your spouse's
SSN or ITIN in the space provided unless your spouse does not have and is not required to have an SSN or ITIN. Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax.
If you choose married filing separately as your filing status, the following special rules apply. Because of these special
rules, you will usually pay more tax on a separate return than if you used another filing status that you qualify for.
-
Your tax rate generally will be higher than it would be on a joint return.
-
Your exemption amount for figuring the alternative minimum tax will be half that allowed to a joint return filer.
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You cannot take the credit for child and dependent care expenses in most cases, and the amount that you can exclude from income
under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000 if you filed a joint return).
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You cannot take the earned income credit.
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You cannot take the exclusion or credit for adoption expenses in most cases.
-
You cannot take the education credits (the Hope credit and the lifetime learning credit), the deduction for student loan interest,
or the tuition and fees deduction.
-
You cannot exclude any interest income from qualified U.S. savings bonds that you used for higher education expenses.
-
If you lived with your spouse at any time during the tax year:
-
You cannot claim the credit for the elderly or the disabled.
-
You will have to include in income more (up to 85%) of any social security or equivalent railroad retirement benefits you
received, and
-
You cannot roll over amounts from a traditional IRA into a Roth IRA.
-
The following credits and deductions are reduced at income levels that are half of those for a joint return:
-
The child tax credit,
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The retirement savings contributions credit,
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Itemized deductions, and
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The deduction for personal exemptions.
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Your capital loss deduction limit is $1,500 (instead of $3,000 if you filed a joint return).
-
If your spouse itemizes deductions, you cannot claim the standard deduction. If you can claim the standard deduction, your
basic standard deduction is half the amount allowed on a joint return.
-
Your first-time homebuyer credit is limited to $3,750 (instead of $7,500 if you filed a joint return).
Individual retirement arrangements (IRAs).
You may not be able to deduct all or part of your contributions to a traditional IRA if you or your spouse was covered
by an employee retirement plan at work during the year. Your deduction is reduced or eliminated if your income is more than
a certain amount. This amount is much lower for married individuals who file separately and lived together at any time during
the year. For more information, see How Much Can You Deduct? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs).
Rental activity losses.
If you actively participated in a passive rental real estate activity that produced a loss, you generally can deduct
the loss from your nonpassive income up to $25,000. This is called a special allowance. However, married persons filing separate
returns who lived together at any time during the year cannot claim this special allowance. Married persons filing separate
returns who lived apart at all times during the year are each allowed a $12,500 maximum special allowance for losses from
passive real estate activities. See Rental Activities in Publication 925, Passive Activity and At-Risk Rules.
Community property states.
If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file
separately, your income may be considered separate income or community income for income tax purposes. See Publication 555,
Community Property.
Joint Return After Separate Returns
You can change your filing status by filing an amended return using Form 1040X.
If you or your spouse (or both of you) file a separate return, you generally can change to a joint return any time within
3 years from the due date of the separate return or returns. This does not include any extensions. A separate return includes
a return filed by you or your spouse claiming married filing separately, single, or head of household filing status.
Separate Returns After Joint Return
Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return.
Exception.
A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate
return for the decedent. The personal representative has 1 year from the due date (including extensions) of the return to
make the change. See Publication 559 for more information on filing income tax returns for a decedent.
You may be able to file as head of household if you meet all the following requirements.
-
You are unmarried or “considered unmarried” on the last day of the year.
-
You paid more than half the cost of keeping up a home for the year.
-
A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the
“qualifying person” is your dependent parent, he or she does not have to live with you. See
Special rule for parent
, later, under
Qualifying Person
.
If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing
separately. You will also receive a higher standard deduction than if you file as single or married filing separately.
How to file.
If you file as head of household, you can use either Form 1040A or Form 1040. Indicate your choice of this filing
status by checking the box on line 4 of either form. Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax.
To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year.
You are considered unmarried on the last day of the tax year if you meet all the following tests.
If you were considered married for part of the year and lived in a community property state (listed earlier under
Married Filing Separately
), special rules may apply in determining your income and expenses. See Publication 555 for more information.
Nonresident alien spouse.
You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during
the year and you do not choose to treat your nonresident spouse as a resident alien. However, your spouse is not a qualifying
person for head of household purposes. You must have another qualifying person and meet the other tests to be eligible to
file as a head of household.
Earned income credit.
Even if you are considered unmarried for head of household purposes because you are married to a nonresident alien,
you are still considered married for purposes of the earned income credit (unless you meet the five tests listed earlier under
Considered Unmarried
).You are not entitled to the credit unless you file a joint return with your spouse and meet other qualifications.
See Publication 596 for more information.
Choice to treat spouse as resident.
You are considered married if you choose to treat your spouse as a resident alien. See chapter 1 of Publication 519.
To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year. You can
determine whether you paid more than half of the cost of keeping up a home by using the following worksheet.
Cost of Keeping Up a Home
|
|
|
|
Amount You
Paid
|
Total
Cost
|
Property taxes |
$ |
$ |
Mortgage interest expense |
|
|
Rent |
|
|
Utility charges |
|
|
Upkeep and repairs |
|
|
Property insurance |
|
|
Food consumed on the premises
|
|
|
Other household expenses |
|
|
Totals |
$ |
$ |
|
|
|
Minus total amount you paid |
|
( )
|
|
|
|
Amount others paid |
|
$ |
|
|
|
If the total amount you paid is more than the amount others paid, you meet the requirement of paying more than half the cost
of keeping up the home.
|
Costs you include.
Include in the cost of upkeep expenses such as rent, mortgage interest, real estate taxes, insurance on the home,
repairs, utilities, and food eaten in the home.
If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance
programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. However, you must include
them in the total cost of keeping up your home to figure if you paid over half the cost.
Costs you do not include.
Do not include in the cost of upkeep expenses such as clothing, education, medical treatment, vacations, life insurance,
or transportation. Also, do not include the rental value of a home you own or the value of your services or those of a member
of your household.
Also do not include any government or charitable assistance you received because of your temporary relocation due
to the storms, tornadoes, or flooding in a Midwestern disaster area.
See Table 4, earlier, to see who is a qualifying person.
Any person not described in Table 4 is not a qualifying person.
Example 1—child.
Your unmarried son lived with you all year and was 18 years old at the end of the year. He did not provide more than half
of his own support and does not meet the tests to be a qualifying child of anyone else. As a result, he is your qualifying
child (see
Qualifying Child
, later) and, because he is single, is a qualifying person for you to claim head of household filing status.
Example 2—child who is not qualifying person.
The facts are the same as in Example 1 except your son was 25 years old at the end of the year and his gross income was $5,000.
Because he does not meet the age test (explained later under
Qualifying Child
), your son is not your qualifying child. Because he does not meet the gross income test (explained later under
Qualifying Relative)
, he is not your qualifying relative. As a result, he is not your qualifying person for head of household purposes.
Example 3—girlfriend.
Your girlfriend lived with you all year. Even though she may be your qualifying relative if the gross income and support tests
(explained later) are met, she is not your qualifying person for head of household purposes because she is not related to
you in one of the ways listed under
Relatives who do not have to live with you. See Table 4.
Example 4—girlfriend's child.
The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. He is not your
qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see
Not a Qualifying Child Test
, later). As a result, he is not your qualifying person for head of household purposes.
Home of qualifying person.
Generally, the qualifying person must live with you for more than half of the year.
Special rule for parent.
If your qualifying person is your father or mother, you may be eligible to file as head of household even if your
father or mother does not live with you. However, you must be able to claim an exemption for your father or mother. Also,
you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother.
You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest
home or home for the elderly.
Death or birth.
You may be eligible to file as head of household if the individual who qualifies you for this filing status is born
or dies during the year. You must have provided more than half of the cost of keeping up a home that was the individual's
main home for more than half of the year, or, if less, the period during which the individual lived.
Example.
You are unmarried. Your mother, for whom you can claim an exemption, lived in an apartment by herself. She died on September
2. The cost of the upkeep of her apartment for the year until her death was $6,000. You paid $4,000 and your brother paid
$2,000. Your brother made no other payments towards your mother's support. Your mother had no income. Because you paid more
than half of the cost of keeping up your mother's apartment from January 1 until her death, and you can claim an exemption
for her, you can file as a head of household.
Temporary absences.
You and your qualifying person are considered to live together even if one or both of you are temporarily absent from
your home due to special circumstances such as illness, education, business, vacation, or military service. It must be reasonable
to assume that the absent person will return to the home after the temporary absence. You must continue to keep up the home
during the absence.
Kidnapped child.
You may be eligible to file as head of household even if the child who is your qualifying person has been kidnapped.
You can claim head of household filing status if all the following statements are true.
-
The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family
or the child's family.
-
In the year of the kidnapping, the child lived with you for more than half the part of the year before the kidnapping.
-
You would have qualified for head of household filing status if the child had not been kidnapped.
This treatment applies for all years until the child is returned. 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.
Qualifying Widow(er) With Dependent Child
If your spouse died in 2008, you can use married filing jointly as your filing status for 2008 if you otherwise qualify to
use that status. The year of death is the last year for which you can file jointly with your deceased spouse. See
Married Filing Jointly
, earlier.
You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year
your spouse died. For example, if your spouse died in 2007 and you have not remarried, you may be able to use this filing
status for 2008 and 2009. The rules for using this filing status are explained in detail here.
This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize
deductions). This status does not entitle you to file a joint return.
How to file.
If you file as a qualifying widow(er) with dependent child, you can use either Form 1040A or Form 1040. Indicate your
filing status by checking the box on line 5 of either form. Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax.
Table 4. Who Is a Qualifying Person Qualifying You To File as Head of Household?1
Caution. See the text of this publication for the other requirements you must meet to claim head of household filing status.
|
IF the person is your . . . |
|
AND . . . |
|
THEN that person is . . . |
qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other
tests)2 |
|
he or she is single |
|
a qualifying person, whether or not you can claim an exemption for the person. |
|
he or she is married and you can claim an exemption for him or her
|
|
a qualifying person. |
|
he or she is married and you cannot claim an exemption for him or her
|
|
not a qualifying person.3 |
qualifying relative4 who is your father or mother
|
|
you can claim an exemption for him or her5 |
|
a qualifying person.6 |
|
you cannot claim an exemption for him or her |
|
not a qualifying person. |
qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests).
|
|
he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under
Relatives who do not have to live with you
on page 15, and you can claim an exemption for him or her5 |
|
a qualifying person. |
|
he or she did not live with you more than half the year |
|
not a qualifying person. |
|
he or she is not related to you in one of the ways listed under
Relatives who do not have to live with you
on page 15 and is your qualifying relative only because he or she lived with you all year as a member of your household
|
|
not a qualifying person |
|
you cannot claim an exemption for him or her |
|
not a qualifying person. |
Eligibility rules.
You are eligible to file your 2008 return as a qualifying widow(er) with dependent child if you meet all the following
tests.
-
You were entitled to file a joint return with your spouse for the year your spouse died. It does not matter whether you actually
filed a joint return.
-
Your spouse died in 2006 or 2007 and you did not remarry before the end of 2008.
-
You have a child or stepchild for whom you can claim an exemption. This does not include a foster child.
-
This child lived in your home all year, except for temporary absences. See
Temporary absences
, earlier, under
Head of Household
. There are also exceptions, described later, for a child who was born or died during the year and for a kidnapped child.
-
You paid more than half the cost of keeping up a home for the year. See
Keeping Up a Home
, earlier, under
Head of Household
.
Example.
John Reed's wife died in 2006. John has not remarried. He has continued during 2007 and 2008 to keep up a home for himself
and his child, who lives with him and for whom he can claim an exemption. For 2006 he was entitled to file a joint return
for himself and his deceased wife. For 2007 and 2008, he can file as a qualifying widower with a dependent child. After 2008,
he can file as head of household if he qualifies.
Death or birth.
You may be eligible to file as a qualifying widow(er) with dependent child if the child who qualifies you for this
filing status is born or dies during the year. You must have provided more than half of the cost of keeping up a home that
was the child's main home during the entire part of the year he or she was alive.
Kidnapped child.
You may be eligible to file as a qualifying widow(er) with dependent child, even if the child who qualifies you for
this filing status has been kidnapped. You can claim qualifying widow(er) with dependent child filing status if all the following
statements are true.
-
The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family
or the child's family.
-
In the year of the kidnapping, the child lived with you for more than half the part of the year before the kidnapping.
-
You would have qualified for qualifying widow(er) with dependent child filing status if the child had not been kidnapped.
As mentioned earlier, this filing status is available for only 2 years following the year your spouse died.
Exemptions reduce your taxable income. Generally, you can deduct $3,500 for each exemption you claim in 2008. If you are entitled
to two exemptions for 2008, you would deduct $7,000 ($3,500 × 2). But you may lose part of the dollar amount of your exemptions
if your adjusted gross income is above a certain amount. See
Phaseout of Exemptions
, later.
You usually can claim exemptions for yourself, your spouse, and each person you can claim as a dependent.
Types of exemptions.
There are two types of exemptions: personal exemptions and exemptions for dependents. While each is worth the same
amount ($3,500 for 2008), different rules, discussed later, apply to each type.
Who cannot claim a personal exemption.
If you are entitled to claim an exemption for a dependent (such as your child), that dependent cannot claim a personal
exemption on his or her own tax return.
How to claim exemptions.
How you claim an exemption on your tax return depends on which form you file.
Form 1040EZ filers.
If you file Form 1040EZ, the exemption amount is combined with the standard deduction and entered on line 5.
Form 1040A filers.
If you file Form 1040A, complete lines 6a through 6d. The total number of exemptions you can claim is the total in
the box on line 6d. Also complete line 26.
Form 1040 filers.
If you file Form 1040, complete lines 6a through 6d.The total number of exemptions you can claim is the total in the
box on line 6d. Also complete line 42.
U.S. citizen or resident alien.
If you are a U.S. citizen, U.S. resident alien, U.S. national (defined later) or a resident of Canada or Mexico, you may qualify
for any of the exemptions discussed here.
Nonresident aliens.
Generally, if you are a nonresident alien (other than a resident of Canada or Mexico, or certain residents of India or Korea),
you can qualify for only one personal exemption for yourself. You cannot claim exemptions for a spouse or dependents.
These restrictions do not apply if you are a nonresident alien married to a U. S. citizen or resident alien and have
chosen to be treated as a resident of the United States.
More information.
For more information on exemptions if you are a nonresident alien, see chapter 5 in Publication 519.
Dual-status taxpayers.
If you have been both a nonresident alien and a resident alien in the same tax year, you should see Publication 519
for information on determining your exemptions.
You are generally allowed one exemption for yourself and, if you are married, one exemption for your spouse. These are called
personal exemptions.
You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. If another taxpayer
is entitled to claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer does not actually
claim you as a dependent.
Your spouse is never considered your dependent.
Joint return.
On a joint return, you can claim one exemption for yourself and one for your spouse.
Separate return.
If you file a separate return, you can claim the exemption for your spouse only if your spouse had no gross income,
is not filing a return, and was not the dependent of another taxpayer. This is true even if the other taxpayer does not actually
claim your spouse as a dependent. This is also true if your spouse is a nonresident alien.
Head of household.
If you qualify for head of household filing status because you are considered unmarried, you can claim an exemption
for your spouse if the conditions described in the preceding paragraph are satisfied.
To claim the exemption for your spouse, check the box on line 6b of Form 1040 or Form 1040A and enter the name of
your spouse in the space to the right of the box. Enter the SSN or ITIN of your spouse in the space provided at the top of
Form 1040 or Form 1040A.
Death of spouse.
If your spouse died during the year, you generally can claim your spouse's exemption under the rules just explained
in Joint return. If you file a separate return for the year, you may be able to claim your spouse's exemption under the rules just described
in
Separate return
.
If you remarried during the year, you cannot take an exemption for your deceased spouse.
If you are a surviving spouse without gross income and you remarry in the year your spouse died, you can be claimed
as an exemption on both the final separate return of your deceased spouse and the separate return of your new spouse for that
year. If you file a joint return with your new spouse, you can be claimed as an exemption only on that return.
Divorced or separated spouse.
If you obtained a final decree of divorce or separate maintenance by the end of the year, you cannot take your former
spouse's exemption. This rule applies even if you provided all of your former spouse's support.
Exemption for Individual Displaced by a Midwestern Disaster
You may be able to take an additional exemption amount of $500 for providing housing to a person displaced by the storms,
tornadoes, or flooding in a Midwestern disaster area. You cannot claim this amount for housing your spouse or any of your
dependents.
You can take this exemption for up to four individuals. Since the exemption is $500 per person, the maximum you can claim
is $2,000. You may be able to take this exemption if all of the following are true.
-
You provided housing in your main home for a period of at least 60 consecutive days to a person displaced by the storms, tornadoes,
or flooding in a Midwestern disaster area.
-
The person lived in a Midwestern disaster area when the disaster occurred.
-
You did not receive rent or any other amount for providing the housing.
To claim the additional exemption amount, file Form 8914, Exemption Amount for Taxpayers Housing Midwestern Displaced Individuals.
For more information, see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas.
Exemptions for Dependents
You are allowed one exemption for each person you can claim as a dependent. You can claim an exemption for a dependent even
if your dependent files a return.
The term “dependent” means:
-
A qualifying child, or
-
A qualifying relative.
The terms “qualifying child” and “qualifying relative” are defined later.
You can claim an exemption for a qualifying child or qualifying relative only if these three tests are met.
-
Dependent taxpayer test.
-
Joint return test.
-
Citizen or resident test.
These three tests are explained in detail later.
All the requirements for claiming an exemption for a dependent are summarized in Table 5.
Table 5. Overview of the Rules for Claiming an Exemption for a Dependent
Caution. This table is only an overview of the rules. For details, see the rest of this publication.
|
-
You cannot claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer.
-
You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund
and there would be no tax liability for either spouse on separate returns.
-
You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident
of Canada or Mexico, for some part of the year.1
-
You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative.
|
Tests To Be a Qualifying Child |
Tests To Be a Qualifying Relative |
-
The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister,
or a descendant of any of them.
-
The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student,
or (c) any age if permanently and totally disabled.
-
The child must have lived with you for more than half of the year.2
-
The child must not have provided more than half of his or her own support for the year.
-
If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the
child as a qualifying child.
|
-
The person cannot be your qualifying child or the qualifying child of any other taxpayer.
-
The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you, or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law).
-
The person's gross income for the year must be less than $3,500.3
-
You must provide more than half of the person's total support for the year.4
|
1There is an exception for certain adopted children.
|
2There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated
parents, and
|
kidnapped children. |
3There is an exception if the person is disabled and has income from a sheltered workshop.
|
4There are exceptions for multiple support agreements, children of divorced or separated parents, and kidnapped children.
|
Dependent not allowed a personal exemption. If you can claim an exemption for your dependent, the dependent cannot claim his or her own exemption on his or her own tax
return. This is true even if you do not claim the dependent's exemption on your return or if the exemption will be reduced
under the phaseout rule described under Phaseout of Exemptions, later.
Housekeepers, maids, or servants.
If these people work for you, you cannot claim exemptions for them.
Child tax credit.
You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year. For
more information, see the instructions in your tax forms package.
If you could be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Even if you have a
qualifying child or qualifying relative, you cannot claim that person as a dependent.
If you are filing a joint return and your spouse could be claimed as a dependent by someone else, you and your spouse cannot
claim any dependents on your joint return.
You generally cannot claim a married person as a dependent if he or she files a joint return.
Example.
You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. The couple
files a joint return. Even though your daughter is your qualifying child, you cannot take an exemption for her.
Exception.
The joint return test does not apply if a joint return is filed by the dependent and his or her spouse merely as a
claim for refund and no tax liability would exist for either spouse on separate returns.
Example.
Your son and his wife each had less than $3,000 of wages and no unearned income. Neither is required to file a tax return.
Taxes were taken out of their pay, so they filed a joint return to get a refund. The exception to the joint return test applies,
so you are not disqualified from claiming their exemptions just because they filed a joint return. You can claim their exemptions
if you meet all the other requirements to do so.
You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident
of Canada or Mexico, for some part of the year. However, there is an exception for certain adopted children, as explained
next.
Adopted child.
If you are a U.S. citizen or U.S. national who has legally adopted a child who is not a U.S. citizen, U.S. resident
alien, or U.S. national, this test is met if the child lived with you as a member of your household all year. This also applies
if the child was lawfully placed with you for legal adoption.
Child's place of residence.
Children usually are citizens or residents of the country of their parents.
If you were a U.S. citizen when your child was born, the child may be a U.S. citizen even if the other parent was
a nonresident alien and the child was born in a foreign country. If so, this test is met.
Foreign students' place of residence.
Foreign students brought to this country under a qualified international education exchange program and placed in
American homes for a temporary period generally are not U.S. residents and do not meet this test. You cannot claim an exemption
for them. However, if you provided a home for a foreign student, you may be able to take a charitable contribution deduction.
See Expenses Paid for Student Living With You in Publication 526, Charitable Contributions.
U.S. national.
A U.S. national is an individual who, although not a U.S. citizen, owes his or her allegiance to the United States.
U.S. nationals include American Samoans and Northern Mariana Islanders who chose to become U.S. nationals instead of U.S.
citizens.
There are five tests that must be met for a child to be your qualifying child. The five tests are:
-
Relationship,
-
Age,
-
Residency,
-
Support, and
-
Special test for qualifying child of more than one person.
These tests are explained next.
To meet this test, a child must be:
-
Your son, daughter, stepchild, foster child, or a descendant (for example, your grandchild) of any of them, or
-
Your brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew)
of any of them.
Adopted child.
An adopted child is always treated as your own child. The term “ adopted child” includes a child who was lawfully placed with you for legal adoption.
Foster child.
A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or
other order of any court of competent jurisdiction.
To meet this test, a child must be:
-
Under age 19 at the end of the year,
-
A full-time student under age 24 at the end of the year, or
-
Permanently and totally disabled at any time during the year, regardless of age.
Example.
Your son turned 19 on December 10. Unless he was permanently and totally disabled or a full-time student, he does not meet
the age test because, at the end of the year, he was not under age 19.
Full-time student.
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.
Student defined.
To qualify as a student, your child must be, during some part of each of any 5 calendar months of the year:
-
A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body
at the school, or
-
A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local
government agency.
The 5 calendar months do not have to be consecutive.
Special rules may apply for people who had to relocate because of the Midwestern storms, tornadoes, or flooding. For details,
see Publication 4492-B. School defined.
A school can be an elementary school, junior and senior high school, college, university, or technical, trade, or
mechanical school. However, an on-the-job training course, correspondence school, or school offering courses only through
the Internet does not count as a school.
Vocational high school students.
Students who work on “ 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.
Permanently and totally disabled.
Your child is permanently and totally disabled if both of the following apply.
-
He or she cannot engage in any substantial gainful activity because of a physical or mental condition.
-
A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.
To meet this test, your child must have lived with you for more than half of the year. There are exceptions for temporary
absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents.
Temporary absences.
Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent
due to special circumstances such as:
-
Illness,
-
Education,
-
Business,
-
Vacation, or
-
Military service.
Death or birth of child.
A child who was born or died during the year is treated as having lived with you all year if your home was the child's
home the entire time he or she was alive during the year. The same is true if the child lived with you all year except for
any required hospital stay following birth.
Child born alive.
You may be able to claim an exemption for a child who was born alive during the year, even if the child lived only
for a moment. State or local law must treat the child as having been born alive. There must be proof of a live birth shown
by an official document, such as a birth certificate. The child must be your qualifying child or qualifying relative, and
all the other tests to claim an exemption for a dependent must be met.
Stillborn child.
You cannot claim an exemption for a stillborn child.
Kidnapped child.
You can treat your child as meeting the residency test even if the child has been kidnapped, but both of the following
statements must be true.
-
The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family
or the child's family.
-
In the year the kidnapping occurred, the child lived with you for more than half of the part of the year before the date of
the kidnapping.
This treatment applies for all years until the child is returned. 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.
Children of divorced or separated parents.
In most cases, because of the residency test, a child of divorced or separated parents is the qualifying child of
the custodial parent. However, the child will be treated as the qualifying child of the noncustodial parent if all four of
the following statements are true.
-
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 the year.
-
The child received over half of his or her support for the year from the parents.
-
The child is in the custody of one or both parents for more than half of the year.
-
Either of the following statements is true.
-
The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent
for the year, and the noncustodial parent attaches this written declaration to his or her return. (If the decree or agreement
went into effect after 1984, see
Divorce decree or separation agreement made after 1984
, later.)
-
A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2008 states that the
noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial
parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during
the year.
Custodial parent and noncustodial parent.
The custodial parent is the parent with whom the child lived for the greater part of the year. The other parent is
the noncustodial parent.
If the parents divorced or separated during the year and the child lived with both parents before the separation,
the custodial parent is the one with whom the child lived for the greater part of the rest of the year.
Example.
Your child lived with you for 10 months of the year. The child lived with your former spouse for the other 2 months. You are
considered the custodial parent.
Written declaration.
The custodial parent may use either Form 8332 or a similar statement (containing the same information required by
the form) to make the written declaration to release the exemption to the noncustodial parent. The noncustodial parent must
attach the form or statement to his or her tax return.
The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all
future years, as specified in the declaration. If the exemption is released for more than 1 year, the original release must
be attached to the return of the noncustodial parent for the first year, and a copy must be attached for each later year.
Divorce decree or separation agreement made after 1984.
If the divorce decree or separation agreement went into effect after 1984, the noncustodial parent can attach certain
pages from the decree or agreement instead of Form 8332. The decree or agreement must state all three of the following.
-
The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
-
The custodial parent will not claim the child as a dependent for the year.
-
The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent.
The noncustodial parent must attach all of the following pages of the decree or agreement to his or her tax return.
-
The cover page (write the other parent's social security number on this page).
-
The pages that include all of the information identified in items (1) through (3) above.
-
The signature page with the other parent's signature and the date of the agreement.
The noncustodial parent must attach the required information even if it was filed with a return in an earlier year.
Beginning with 2009 tax returns, the noncustodial parent will no longer be able to attach pages from the decree or agreement
instead of Form 8332 if the decree or agreement was made after 2008. The noncustodial parent will have to attach Form 8332
or a similar statement signed by the custodial parent and whose only purpose is to release a claim to exemption.
Remarried parent.
If you remarry, the support provided by your new spouse is treated as provided by you.
Parents who never married.
This special rule for divorced or separated parents also applies to parents who never married.
Support Test (To Be a Qualifying Child)
To meet this test, the child cannot have provided more than half of his or her own support for the year.
This test is different from the support test to be a qualifying relative, which is described later. However, to see what is
or is not support, see
Support Test (To Be a Qualifying Relative)
, later. If you are not sure whether a child provided more than half of his or her own support, you may find Worksheet 1 helpful.
Scholarships.
A scholarship received by a child who is a full-time student is not taken into account in determining whether the
child provided more than half of his or her own support.
Special Test for Qualifying Child of More Than One Person
If your qualifying child is not a qualifying child for anyone else, this test does not apply to you and you do not need to
read about it. This is also true if your qualifying child is not a qualifying child for anyone else except your spouse with
whom you file a joint return.
If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced or separated
parents described earlier, see Applying this special test to divorced or separated parents, later.
Sometimes, a child meets the relationship, age, residency, and support tests to be a qualifying child of more than one person.
Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying
child. To meet this special test, you must be the person who can treat the child as a qualifying child.
If you and another person have the same qualifying child, you and the other person(s) can decide which of you will treat the
child as a qualifying child. That person can take all of the following tax benefits (provided the person is eligible for each
benefit) based on the qualifying child.
-
The exemption for the child.
-
The child tax credit.
-
Head of household filing status.
-
The credit for child and dependent care expenses.
-
The exclusion from income for dependent care benefits.
-
The earned income credit.
The other person cannot take any of these benefits based on this qualifying child. In other words, you and the other person
cannot agree to divide these tax benefits between you.
If you and the other person(s) cannot agree on who will claim the child and more than one person files a return claiming the
same child, the IRS will disallow all but one of the claims using the tie-breaker rule in Table 6.
Table 6. When More Than One Person Files a Return Claiming the Same Qualifying Child (Tie-Breaker Rule)
IF more than one person files a return claiming the same qualifying child and . . . |
|
THEN the child will be treated as the qualifying child of the. . . |
only one of the persons is the child's parent, |
|
parent. |
two of the persons are parents of the child and they do not file a joint return together, |
|
parent with whom the child lived for the longer period of time during the year. |
|
two of the persons are parents of the child, they do not file a joint return together, and the child lived with each parent
the same amount of time during the year,
|
|
parent with the higher adjusted gross income (AGI). |
none of the persons are the child's parent, |
|
person with the highest AGI. |
Example 1—child lived with parent and grandparent.
You and your 3-year-old daughter Jane lived with your mother all year. You are 25 years old and earned $9,000 for the year.
Your mother is not your dependent. Jane is a qualifying child of both you and your mother because she meets the relationship,
age, residency, and support tests for both you and your mother. However, only one of you can claim her. You agree to let your
mother claim Jane. This means your mother can claim Jane as a dependent and can claim her as a qualifying child for the child
tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits,
and the earned income credit, if she qualifies for each of those tax benefits (and if you do not claim Jane as a dependent
or as a qualifying child for any of those tax benefits).
Example 2—two persons claim same child.
The facts are the same as in Example 1 except that you and your mother both claim Jane as a dependent and as a qualifying
child. In this case, you as the child's parent will be the only one allowed to claim Jane as a dependent and as a qualifying
child. The IRS will disallow your mother's claim to these tax benefits unless she has another qualifying child.
Example 3—qualifying children split between two persons.
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. Only one of you can claim each child as a dependent. However, you and your mother can split the three
qualifying children between you. For example, you can claim one child as a dependent and your mother can claim the other two.
Example 4—taxpayer who is a qualifying child.
The facts are the same as in Example 1 except that you are only 18 years old and did not provide more than half of your own
support for the year. This means you are your mother's qualifying child and she could claim you as a dependent. Because of
the
Dependent Taxpayer Test
explained earlier, you cannot treat your daughter as a qualifying child and cannot claim her as a dependent. Only your mother
can treat your daughter as a qualifying child.
Example 5—separated parents.
You, your husband, and your 10-year-old son lived together until August 1, 2008, when your husband moved out of the household.
In August and September, your son lived with you. For the rest of the year, your son lived with your husband, the boy's father.
Your son is a qualifying child of both you and your husband because your son lived with each of you for more than half the
year and because he met the relationship, age, and support tests for both of you. 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 does not apply.
You and your husband will file separate returns. Your husband agrees to let you treat your son as a qualifying child. This
means, if your husband does not claim your son as a qualifying child, you can claim your son as a dependent and treat him
as a qualifying child for the child tax credit and exclusion for dependent care benefits, if you qualify for each of those
tax benefits. However, you cannot claim head of household filing status because you and your husband did not live apart the
last 6 months of the year. As a result, your filing status is married filing separately, so you cannot claim the earned income
credit or the credit for child and dependent care expenses.
Example 6—separated parents claim same child.
The facts are the same as in Example 5 except that you and your husband both claim your son as a qualifying child. In this
case, only your husband will be allowed to treat your son as a qualifying child. This is because, during 2008, the boy lived
with him longer than with you. If you claimed an exemption, the child tax credit, head of household filing status, credit
for child and dependent care expenses, exclusion for dependent care benefits, or the earned income credit for your son, the
IRS will disallow your claim to all these tax benefits. In addition, because you and your husband did not live apart the last
6 months of the year, your husband cannot claim head of household filing status. As a result, his filing status is married
filing separately, so he cannot claim the earned income credit or the credit for child and dependent care expenses.
Example 7—unmarried parents.
You, your 5-year-old son, and your son's father lived together all year. You and your son's father are not married. Your son
is a qualifying child of both you and his father because he meets the relationship, age, residency, and support tests for
both you and his father. Your adjusted gross income (AGI) is $12,000 and your son's father's AGI is $14,000. Your son's father
agrees to let you treat the child as a qualifying child. This means you can claim him as a dependent and treat him as a qualifying
child for the child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for
dependent care benefits, and the earned income credit, if you qualify for each of those tax benefits (and if your son's father
does not claim your son as a dependent or as a qualifying child for any of those tax benefits).
Example 8—unmarried parents claim same child.
The facts are the same as in Example 7 except that you and your son's father both claim your son as a qualifying child. In
this case, only your son's father will be allowed to treat your son as a qualifying child. This is because his AGI, $14,000,
is more than your AGI, $12,000. If you claimed an exemption, the child tax credit, head of household filing status, credit
for child and dependent care expenses, exclusion for dependent care benefits, or the earned income credit for your son, the
IRS will disallow your claim to all these tax benefits.
Example 9—child did not live with a parent.
You and your 7-year-old niece, your sister's child, lived with your mother all year. You are 25 years old, and your AGI is
$9,300. Your mother's AGI is $15,000. Your niece is a qualifying child of both you and your mother because she meets the relationship,
age, residency, and support tests for both you and your mother. However, only one of you can treat her as a qualifying child.
Your mother agrees to let you treat the child as a qualifying child.
Example 10—child did not live with a parent.
The facts are the same as in Example 9 except that you and your mother both claim your niece as a qualifying child. In this
case, only your mother will be allowed to treat your niece as a qualifying child. This is because your mother's AGI, $15,000,
is more than your AGI, $9,300. If you claimed an exemption, the child tax credit, head of household filing status, credit
for child and dependent care expenses, exclusion for dependent care benefits, or the earned income credit for your niece,
the IRS will disallow your claim to all these tax benefits.
Applying this special test to divorced or separated parents.
If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced
or separated parents described earlier, only the noncustodial parent can claim an exemption and the child tax credit for the
child. However, the noncustodial parent cannot claim the child as a qualifying child for head of household filing status,
the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit.
Only the custodial parent or another eligible taxpayer can claim the child as a qualifying child for these four tax benefits.
If the custodial parent and another eligible taxpayer both claim the child as a qualifying child for any of these four tax
benefits, the IRS will disallow all but one of the claims using the tie-breaker rule in Table 6.
Example 1.
You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Under the rules
for children of divorced or separated parents, your son is treated as the qualifying child of his father, who can claim an
exemption and the child tax credit for the child if he meets all the requirements to do so. Because of this, you cannot claim
an exemption or the child tax credit for your son. 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 earned income credit. You and your mother did not have any child care expenses or dependent care benefits, but the
boy is a qualifying child of both you and your mother for head of household filing status and the earned income credit because
he meets the relationship, age, residency, and support tests for both you and your mother. (Note: The support test does not
apply for the earned income credit.) However, you agree to let your mother claim your son. This means she can claim him for
head of household filing status and the earned income credit if she qualifies for each and if you do not claim him as a qualifying
child for the earned income credit. (You cannot claim head of household filing status because your mother paid the entire
cost of keeping up the home.)
Example 2.
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 earned income credit. Your mother also
claims him as a qualifying child for head of household filing status. You as the child's parent will be the only one allowed
to claim your son as a qualifying child for the earned income credit. The IRS will disallow your mother's claim to the earned
income credit and head of household filing status unless she has another qualifying child.
There are four tests that must be met for a person to be your qualifying relative. The four tests are:
-
Not a qualifying child test,
-
Member of household or relationship test,
-
Gross income test, and
-
Support test.
Age.
Unlike a qualifying child, a qualifying relative can be any age. There is no age test for a qualifying relative.
Kidnapped child.
You can treat a child as your qualifying relative even if the child has been kidnapped, but both of the following
statements must be true.
-
The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family
or the child's family.
-
In the year the kidnapping occurred, the child met the tests to be your qualifying relative for the part of the year before
the date of the kidnapping.
This treatment applies for all years until the child is returned. 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.
Not a Qualifying Child Test
A child is not your qualifying relative if the child is your qualifying child or the qualifying child of any other taxpayer.
Example 1.
Your 22-year-old daughter, who is a full-time student, lives with you and meets all the tests to be your qualifying child.
She is not your qualifying relative.
Example 2.
Your 2-year-old son lives with your parents and meets all the tests to be their qualifying child. He is not your qualifying
relative.
Example 3.
Your son lives with you but is not your qualifying child because he is 30 years old and does not meet the age test. He may
be your qualifying relative if the gross income test and the support test are met.
Example 4.
Your 13-year-old grandson lived with his mother for 3 months, with his uncle for 4 months, and with you for 5 months during
the year. He is not your qualifying child because he does not meet the residency test. He may be your qualifying relative
if the gross income test and the support test are met.
Child of person not required to file a return.
A child is not the qualifying child of any other taxpayer and so may qualify as your qualifying relative if the child's
parent (or other person for whom the child is defined as a qualifying child) is not required to file an income tax return
and either:
Example 1—return not required.
You support an unrelated friend and her 3-year-old child, who lived with you all year in your home. Your friend has no gross
income, is not required to file a 2008 tax return, and does not file a 2008 tax return. Both your friend and her child are
your qualifying relatives if the member of household or relationship test, gross income test, and support test are met.
Example 2—return filed to claim refund.
The facts are the same as in Example 1 except your friend had wages of $1,500 during the year and had income tax withheld from her wages. She files a return only
to get a refund of the income tax withheld and does not claim the earned income credit or any other tax credits or deductions.
Both your friend and her child are your qualifying relatives if the member of household or relationship test, gross income
test, and support test are met.
Example 3—earned income credit claimed.
The facts are the same as in Example 2 except your friend had wages of $8,000 during the year and claimed the earned income credit on her return. Your friend's child
is the qualifying child of another taxpayer (your friend), so you cannot claim your friend's child as your qualifying relative.
Child in Canada or Mexico.
A child who lives in Canada or Mexico may be your qualifying relative, and you may be able to claim the child as a
dependent. If the child does not live with you, the child does not meet the residency test to be your qualifying child. If
the persons the child does live with are not U.S. citizens and have no U.S. gross income, those persons are not “ taxpayers,” so the child is not the qualifying child of any other taxpayer. If the child is not your qualifying child or the qualifying
child of any other taxpayer, the child is your qualifying relative if the gross income test and the support test are met.
You cannot claim as a dependent a child who lives in a foreign country other than Canada or Mexico, unless the child
is a U.S. citizen, U.S. resident alien, or U.S. national for some part of the year. There is an exception for certain adopted
children who lived with you all year. See
Citizen or Resident Test
, earlier.
Example.
You provide all the support of your children, ages 6, 8, and 12, who live in Mexico with your mother and have no income. You
are single and live in the United States. Your mother is not a U.S. citizen and has no U.S. income, so she is not a “taxpayer.” Your children are not your qualifying children because they do not meet the residency test. Also, they are not the qualifying
children of any other taxpayer, so they are your qualifying relatives and you can claim them as dependents if all the tests
are met. You may also be able to claim your mother as a dependent if all the tests are met, including the gross income test
and the support test.
Member of Household or Relationship Test
To meet this test, a person must either:
If at any time during the year the person was your spouse, that person cannot be your qualifying relative. However, see
Personal Exemptions,
earlier.
Relatives who do not have to live with you.
A person related to you in any of the following ways does not have to live with you all year as a member of your household
to meet this test.
-
Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). (A legally adopted child
is considered your child.)
-
Your brother, sister, half brother, half sister, stepbrother, or stepsister.
-
Your father, mother, grandparent, or other direct ancestor, but not foster parent.
-
Your stepfather or stepmother.
-
A son or daughter of your brother or sister.
-
A brother or sister of your father or mother.
-
Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
Any of these relationships that were established by marriage are not ended by death or divorce.
Example.
You and your wife began supporting your wife's father, a widower, in 2002. Your wife died in 2007. In spite of your wife's
death, your father-in-law continues to meet this test, even if he does not live with you. You can claim him as a dependent
if all other tests are met, including the gross income test and support test.
Foster child.
A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or
other order of any court of competent jurisdiction.
Joint return.
If you file a joint return, the person can be related to either you or your spouse. Also, the person does not need
to be related to the spouse who provides support.
For example, your spouse's uncle who receives more than half of his support from you may be your qualifying relative,
even though he does not live with you. However, if you and your spouse file separate returns, your spouse's uncle can be your
qualifying relative only if he lives with you all year as a member of your household.
Temporary absences.
A person is considered to live with you as a member of your household during periods of time when one of you, or both,
are temporarily absent due to special circumstances such as:
-
Illness,
-
Education,
-
Business,
-
Vacation, or
-
Military service.
If the person is placed in a nursing home for an indefinite period of time to receive constant medical care, the absence
may be considered temporary.
Death or birth.
A person who died during the year, but lived with you as a member of your household until death, will meet this test.
The same is true for a child who was born during the year and lived with you as a member of your household for the rest of
the year. The test is also met if a child lived with you as a member of your household except for any required hospital stay
following birth.
If your dependent died during the year and you otherwise qualified to claim an exemption for the dependent, you can
still claim the exemption.
Example.
Your dependent mother died on January 15. She met the tests to be your qualifying relative. The other tests to claim an exemption
for a dependent were also met. You can claim an exemption for her on your return.
Local law violated.
A person does not meet this test if at any time during the year the relationship between you and that person violates
local law.
Example.
Your girlfriend lived with you as a member of your household all year. However, your relationship with her violated the laws
of the state where you live, because she was married to someone else. Therefore, she does not meet this test and you cannot
claim her as a dependent.
Adopted child.
An adopted child is always treated as your own child. The term “ adopted child” includes a child who was lawfully placed with you for legal adoption.
Cousin.
Your cousin meets this test only if he or she lives with you all year as a member of your household. A cousin is a
descendant of a brother or sister of your father or mother.
To meet this test, a person's gross income for the year must be less than $3,500.
Gross income defined.
Gross income is all income in the form of money, property, and services that is not exempt from tax.
In a manufacturing, merchandising, or mining business, gross income is the total net sales minus the cost of goods
sold, plus any miscellaneous income from the business.
Gross receipts from rental property are gross income. Do not deduct taxes, repairs, etc., to determine the gross income
from rental property.
Gross income includes a partner's share of the gross (not a share of the net) partnership income.
Gross income also includes all unemployment compensation and certain scholarship and fellowship grants. Scholarships received
by degree candidates that are used for tuition, fees, supplies, books, and equipment required for particular courses may not
be included in gross income. For more information about scholarships, see chapter 1 of Publication 970, Tax Benefits for Education.
Tax-exempt income, such as certain social security benefits, is not included in gross income.
Disabled dependent working at sheltered workshop.
For purposes of this test (the gross income test), the gross income of an individual who is permanently and totally
disabled at any time during the year does not include income for services the individual performs at a sheltered workshop.
The availability of medical care at the workshop must be the main reason for the individual's presence there. Also, the income
must come solely from activities at the workshop that are incident to this medical care.
A “ sheltered workshop” is a school that:
-
Provides special instruction or training designed to alleviate the disability of the individual, and
-
Is operated by certain tax-exempt organizations or by a state, a U.S. possession, a political subdivision of a state or possession,
the United States, or the District of Columbia.
“ Permanently and totally disabled” has the same meaning here as under
Qualifying Child,
earlier.
Support Test (To Be a Qualifying Relative)
To meet this test, you generally must provide more than half of a person's total support during the calendar year.
However, if two or more persons provide support, but no one person provides more than half of a person's total support, see
Multiple Support Agreement
, later.
How to determine if support test is met.
You figure whether you have provided more than half of a person's total support by comparing the amount you contributed
to that person's support with the entire amount of support that person received from all sources. This includes support the
person provided from his or her own funds.
You may find Worksheet 1 helpful in figuring whether you provided more than half of a person's support.
Person's own funds not used for support.
A person's own funds are not support unless they are actually spent for support.
Example.
Your mother received $2,400 in social security benefits and $300 in interest. She paid $2,000 for lodging and $400 for recreation.
She put $300 in a savings account.
Even though your mother received a total of $2,700 ($2,400 + $300), she spent only $2,400 ($2,000 + $400) for her own support.
If you spent more than $2,400 for her support and no other support was received, you have provided more than half of her support.
Child's wages used for own support.
You cannot include in your contribution to your child's support any support that is paid for by the child with the
child's own wages, even if you paid the wages.
Year support is provided.
The year you provide the support is the year you pay for it, even if you do so with borrowed money that you repay
in a later year.
If you use a fiscal year to report your income, you must provide more than half of the dependent's support for the
calendar year in which your fiscal year begins.
Armed Forces dependency allotments.
The part of the allotment contributed by the government and the part taken out of your military pay are both considered
provided by you in figuring whether you provide more than half of the support. If your allotment is used to support persons
other than those you name, you can take the exemptions for them if they otherwise qualify.
Example.
You are in the Armed Forces. You authorize an allotment for your widowed mother that she uses to support herself and her sister.
If the allotment provides more than half of each person's support, you can take an exemption for each of them, if they otherwise
qualify, even though you authorize the allotment only for your mother.
Tax-exempt military quarters allowances.
These allowances are treated the same way as dependency allotments in figuring support. The allotment of pay and the
tax-exempt basic allowance for quarters are both considered as provided by you for support.
Tax-exempt income.
In figuring a person's total support, include tax-exempt income, savings, and borrowed amounts used to support that
person. Tax-exempt income includes certain social security benefits, welfare benefits, nontaxable life insurance proceeds,
Armed Forces family allotments, nontaxable pensions, and tax-exempt interest.
Example 1.
You provide $4,000 toward your mother's support during the year. She has earned income of $600, nontaxable social security
benefits of $4,800, and tax-exempt interest of $200. She uses all these for her support. You cannot claim an exemption for
your mother because the $4,000 you provide is not more than half of her total support of $9,600.
Example 2.
Your brother's daughter takes out a student loan of $2,500 and uses it to pay her college tuition. She is personally responsible
for the loan. You provide $2,000 toward her total support. You cannot claim an exemption for her because you provide less
than half of her support.
Social security benefits.
If a husband and wife each receive benefits that are paid by one check made out to both of them, half of the total
paid is considered to be for the support of each spouse, unless they can show otherwise.
If a child receives social security benefits and uses them toward his or her own support, the benefits are considered
as provided by the child.
Support provided by the state (welfare, food stamps, housing, etc.).
Benefits provided by the state to a needy person generally are considered support provided by the state. However,
payments based on the needs of the recipient will not be considered as used entirely for that person's support if it is shown
that part of the payments were not used for that purpose.
Foster care payments and expenses.
Payments you receive for the support of a foster child from a child placement agency are considered support provided
by the agency. Similarly, payments you receive for the support of a foster child from a state or county are considered support
provided by the state or county.
If you are not in the trade or business of providing foster care and your unreimbursed out-of-pocket expenses in caring
for a foster child were mainly to benefit an organization qualified to receive deductible charitable contributions, the expenses
are deductible as charitable contributions but are not considered support you provided. For more information about the deduction
for charitable contributions, see Publication 526. If your unreimbursed expenses are not deductible as charitable contributions,
they are considered support you provided.
If you are in the trade or business of providing foster care, your unreimbursed expenses are not considered support
provided by you.
Example.
Lauren, a foster child, lived with Mr. and Mrs. Smith for the last 3 months of the year. The Smiths cared for Lauren because
they wanted to adopt her (although she had not been placed with them for adoption). They did not care for her as a trade or
business or to benefit the agency that placed her in their home. The Smiths' unreimbursed expenses are not deductible as charitable
contributions but are considered support they provided for Lauren.
Home for the aged.
If you make a lump-sum advance payment to a home for the aged to take care of your relative for life and the payment
is based on that person's life expectancy, the amount of support you provide each year is the lump-sum payment divided by
the relative's life expectancy. The amount of support you provide also includes any other amounts you provided during the
year.
To figure if you provided more than half of a person's support, you must first determine the total support provided for that
person. Total support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation,
transportation, and similar necessities.
Generally, the amount of an item of support is the amount of the expense incurred in providing that item. For lodging, the
amount of support is the fair rental value of the lodging.
Expenses that are not directly related to any one member of a household, such as the cost of food for the household, must
be divided among the members of the household.
Example 1.
Grace Brown, mother of Mary Miller, lives with Frank and Mary Miller and their two children. Grace gets social security benefits
of $2,400, which she spends for clothing, transportation, and recreation. Grace has no other income. Frank and Mary's total
food expense for the household is $5,200. They pay Grace's medical and drug expenses of $1,200. The fair rental value of the
lodging provided for Grace is $1,800 a year, based on the cost of similar rooming facilities. Figure Grace's total support
as follows:
The support Frank and Mary provide ($1,800 lodging + $1,200 medical expenses + $1,040 food = $4,040) is more than half of
Grace's $6,440 total support.
Example 2.
Your parents live with you, your spouse, and your two children in a house you own. The fair rental value of your parents'
share of the lodging is $2,000 a year ($1,000 each), which includes furnishings and utilities. Your father receives a nontaxable
pension of $4,200, which he spends equally between your mother and himself for items of support such as clothing, transportation,
and recreation. Your total food expense for the household is $6,000. Your heat and utility bills amount to $1,200. Your mother
has hospital and medical expenses of $600, which you pay during the year. Figure your parents' total support as follows:
You must apply the support test separately to each parent. You provide $2,000 ($1,000 lodging, $1,000 food) of your father's
total support of $4,100 — less than half. You provide $2,600 to your mother ($1,000 lodging, $1,000 food, $600 medical) —
more than half of her total support of $4,700. You meet the support test for your mother, but not your father. Heat and utility
costs are included in the fair rental value of the lodging, so these are not considered separately.
Lodging.
If you provide a person with lodging, you are considered to provide support equal to the fair rental value of the
room, apartment, house, or other shelter in which the person lives. Fair rental value includes a reasonable allowance for
the use of furniture and appliances, and for heat and other utilities that are provided.
Fair rental value defined.
This is the amount you could reasonably expect to receive from a stranger for the same kind of lodging. It is used
instead of actual expenses such as taxes, interest, depreciation, paint, insurance, utilities, cost of furniture and appliances,
etc. In some cases, fair rental value may be equal to the rent paid.
If you provide the total lodging, the amount of support you provide is the fair rental value of the room the person
uses, or a share of the fair rental value of the entire dwelling if the person has use of your entire home. If you do not
provide the total lodging, the total fair rental value must be divided depending on how much of the total lodging you provide.
If you provide only a part and the person supplies the rest, the fair rental value must be divided between both of you according
to the amount each provides.
Example.
Your parents live rent free in a house you own. It has a fair rental value of $5,400 a year furnished, which includes a fair
rental value of $3,600 for the house and $1,800 for the furniture. This does not include heat and utilities. The house is
completely furnished with furniture belonging to your parents. You pay $600 for their utility bills. Utilities are not usually
included in rent for houses in the area where your parents live. Therefore, you consider the total fair rental value of the
lodging to be $6,000 ($3,600 fair rental value of the unfurnished house, $1,800 allowance for the furnishings provided by
your parents, and $600 cost of utilities) of which you are considered to provide $4,200 ($3,600 + $600).
Person living in his or her own home.
The total fair rental value of a person's home that he or she owns is considered support contributed by that person.
Living with someone rent free.
If you live with a person rent free in his or her home, you must reduce the amount you provide for support of that
person by the fair rental value of lodging he or she provides you.
Property.
Property provided as support is measured by its fair market value. Fair market value is the price that property would
sell for on the open market. It is the price that would be agreed upon between a willing buyer and a willing seller, with
neither being required to act, and both having reasonable knowledge of the relevant facts.
Capital expenses.
Capital items, such as furniture, appliances, and cars, that are bought for a person during the year can be included
in total support under certain circumstances.
The following examples show when a capital item is or is not support.
Example 1.
You buy a $200 power lawn mower for your 13-year-old child. The child is given the duty of keeping the lawn trimmed. Because
the lawn mower benefits all members of the household, you cannot include the cost of the lawn mower in the support of your
child.
Example 2.
You buy a $150 television set as a birthday present for your 12-year-old child. The television set is placed in your child's
bedroom. You can include the cost of the television set in the support of your child.
Example 3.
You pay $5,000 for a car and register it in your name. You and your 17-year-old daughter use the car equally. Because you
own the car and do not give it to your daughter but merely let her use it, you cannot include the cost of the car in your
daughter's total support. However, you can include in your daughter's support your out-of-pocket expenses of operating the
car for her benefit.
Example 4.
Your 17-year-old son, using personal funds, buys a car for $4,500. You provide all the rest of your son's support — $4,000.
Since the car is bought and owned by your son, the car's fair market value ($4,500) must be included in his support. Your
son has provided more than half of his own total support of $8,500 ($4,500 + $4,000), so he is not your qualifying child.
You did not provide more than half of his total support, so he is not your qualifying relative. You cannot claim an exemption
for your son.
Medical insurance premiums.
Medical insurance premiums you pay, including premiums for supplementary Medicare coverage, are included in the support
you provide.
Medical insurance benefits.
Medical insurance benefits, including basic and supplementary Medicare benefits, are not part of support.
Tuition payments and allowances under the GI Bill.
Amounts veterans receive under the GI Bill for tuition payments and allowances while they attend school are included
in total support.
Example.
During the year, your son receives $2,200 from the government under the GI Bill. He uses this amount for his education. You
provide the rest of his support — $2,000. Because GI benefits are included in total support, your son's total support is $4,200
($2,200 + $2,000). You have not provided more than half of his support.
Child care expenses.
If you pay someone to provide child or dependent care, you can include these payments in the amount you provided for
the support of your child or disabled dependent, even if you claim a credit for the payments. For information on the credit,
see Publication 503, Child and Dependent Care Expenses.
Other support items.
Other items may be considered as support depending on the facts in each case.
Do Not Include in Total Support
The following items are not included in total support.
-
Federal, state, and local income taxes paid by persons from their own income.
-
Social security and Medicare taxes paid by persons from their own income.
-
Life insurance premiums.
-
Funeral expenses.
-
Scholarships received by your child if your child is a full-time student.
-
Survivors' and Dependents' Educational Assistance payments used for the support of the child who receives them.
Government or charitable assistance you received because of your temporary relocation due to the storms, tornadoes, or flooding
in a Midwestern disaster area is not included in total support. Disregard these amounts in determining who provided a person's
support.
Multiple Support Agreement
Sometimes no one provides more than half of the support of a person. Instead, two or more persons, each of whom would be able
to take the exemption but for the support test, together provide more than half of the person's support.
When this happens, you can agree that any one of you who individually provides more than 10% of the person's support, but
only one, can claim an exemption for that person as a qualifying relative. Each of the others must sign a statement agreeing
not to claim the exemption for that year. The person who claims the exemption must keep these signed statements for his or
her records. A multiple support declaration identifying each of the others who agreed not to claim the exemption must be attached
to the return of the person claiming the exemption. Form 2120, Multiple Support Declaration, can be used for this purpose.
You can claim an exemption under a multiple support agreement for someone related to you or for someone who lived with you
all year as a member of your household.
Example 1.
You, your sister, and your two brothers provide the entire support of your mother for the year. You provide 45%, your sister
35%, and your two brothers each provide 10%. Either you or your sister can claim an exemption for your mother. The other must
sign a statement agreeing not to take an exemption for your mother. The one who claims the exemption must attach Form 2120,
or a similar declaration, to his or her return and must keep the statement signed by the other for his or her records. Because
neither brother provides more than 10% of the support, neither can take the exemption and neither has to sign a statement.
Example 2.
You and your brother each provide 20% of your mother's support for the year. The remaining 60% of her support is provided
equally by two persons who are not related to her. She does not live with them. Because more than half of her support is provided
by persons who cannot claim an exemption for her, no one can take the exemption.
Example 3.
Your father lives with you and receives 25% of his support from social security, 40% from you, 24% from his brother (your
uncle), and 11% from a friend. Either you or your uncle can take the exemption for your father if the other signs a statement
agreeing not to. The one who takes the exemption must attach Form 2120, or a similar declaration, to his return and must keep
for his records the signed statement from the one agreeing not to take the exemption.
Support Test for Children of Divorced or Separated Parents
In most cases, a child of divorced or separated parents will be a qualifying child of one of the parents. See
Children of divorced or separated parents
under
Qualifying Child,
earlier. However, if the child does not meet the requirements to be a qualifying child of either parent, the child may be
a qualifying relative of one of the parents. In that case, the following rules must be used in applying the support test.
A child will be treated as being the qualifying relative of his or her noncustodial parent if all four of the following statements
are true.
-
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 the year.
-
The child received over half of his or her support for the year from the parents.
-
The child is in the custody of one or both parents for more than half of the year.
-
Either of the following statements is true.
-
The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent
for the year, and the noncustodial parent attaches this written declaration to his or her return. (If the decree or agreement
went into effect after 1984, see
Divorce decree or separation agreement made after 1984
, later.)
-
A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2008 states that the
noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial
parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during
the year.
Custodial parent and noncustodial parent.
The custodial parent is the parent with whom the child lived for the greater part of the year. The other parent is
the noncustodial parent.
If the parents divorced or separated during the year and the child lived with both parents before the separation,
the custodial parent is the one with whom the child lived for the greater part of the rest of the year.
Example.
Your child lived with you for 10 months of the year. The child lived with your former spouse for the other 2 months. You are
considered the custodial parent.
Written declaration.
The custodial parent may use either Form 8332 or a similar statement (containing the same information required by
the form) to make the written declaration to release the exemption to the noncustodial parent. The noncustodial parent must
attach the form or statement to his or her tax return.
The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all
future years, as specified in the declaration. If the exemption is released for more than 1 year, the original release must
be attached to the return of the noncustodial parent for the first year, and a copy must be attached for each later year.
Divorce decree or separation agreement made after 1984.
If the divorce decree or separation agreement went into effect after 1984, the noncustodial parent can attach certain
pages from the decree or agreement instead of Form 8332. The decree or agreement must state all three of the following.
-
The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
-
The custodial parent will not claim the child as a dependent for the year.
-
The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent.
The noncustodial parent must attach all of the following pages of the decree or agreement to his or her tax return.
-
The cover page (write the other parent's social security number on this page).
-
The pages that include all of the information identified in items (1) through (3) above.
-
The signature page with the other parent's signature and the date of the agreement.
The noncustodial parent must attach the required information even if it was filed with a return in an earlier year.
Beginning with 2009 tax returns, the noncustodial parent will no longer be able to attach pages from the decree or agreement
instead of Form 8332 if the decree or agreement was made after 2008. The noncustodial parent will have to attach Form 8332
or a similar statement signed by the custodial parent and whose only purpose is to release a claim to exemption.
Remarried parent.
If you remarry, the support provided by your new spouse is treated as provided by you.
Child support under pre-1985 agreement.
All child support payments actually received from the noncustodial parent under a pre-1985 agreement are considered
used for the support of the child.
Example.
Under a pre-1985 agreement, the noncustodial parent provides $1,200 for the child's support. This amount is considered support
provided by the noncustodial parent even if the $1,200 was actually spent on things other than support.
Alimony.
Payments to a spouse that are includible in the spouse's gross income as either alimony, separate maintenance payments,
or similar payments from an estate or trust, are not treated as a payment for the support of a dependent.
Parents who never married.
This special rule for divorced or separated parents also applies to parents who never married.
Multiple support agreement.
If the support of the child is determined under a multiple support agreement, this special support test for divorced
or separated parents does not apply.
Worksheet 1.Worksheet for Determining Support
Funds Belonging to the Person You Supported |
|
|
|
1. |
Enter the total funds belonging to the person you supported, including income received (taxable and nontaxable) and amounts
borrowed during the year, plus the amount in savings and other accounts at the beginning of the year
|
1. |
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|
2. |
Enter the amount on line 1 that was used for the person's support |
2. |
|
|
3. |
Enter the amount on line 1 that was used for other purposes |
3. |
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|
4. |
Enter the total amount in the person's savings and other accounts at the end of the year |
4. |
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5. |
Add lines 2 through 4. (This amount should equal line 1.) |
5. |
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|
Expenses for Entire Household (where the person you supported lived)
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6. |
Lodging (complete line 6a or 6b): |
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6a. Enter the total rent paid
|
6a. |
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|
6b. Enter the fair rental value of the home. If the person you supported owned the home, also include this amount in line 21.
|
6b. |
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|
7. |
Enter the total food expenses |
7. |
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8. |
Enter the total amount of utilities (heat, light, water, etc. not included in line 6a or 6b) |
8. |
|
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9. |
Enter the total amount of repairs (not included in line 6a or 6b) |
9. |
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10. |
Enter the total of other expenses. Do not include expenses of maintaining the home, such as mortgage interest, real estate
taxes, and insurance.
|
10. |
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11. |
Add lines 6a through 10. These are the total household expenses |
11. |
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12. |
Enter total number of persons who lived in the household |
12. |
|
|
Expenses for the Person You Supported |
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13. |
Divide line 11 by line 12. This is the person's share of the household expenses |
13. |
|
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14. |
Enter the person's total clothing expenses |
14. |
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15. |
Enter the person's total education expenses |
15. |
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16. |
Enter the person's total medical and dental expenses not paid for or reimbursed by insurance |
16. |
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17. |
Enter the person's total travel and recreation expenses |
17. |
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18. |
Enter the total of the person's other expenses |
18. |
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19. |
Add lines 13 through 18. This is the total cost of the person's support for the year |
19. |
|
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Did the Person Provide More Than Half of His or Her Own Support? |
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20. |
Multiply line 19 by 50% (.50) |
20. |
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21. |
Enter the amount from line 2, plus the amount from line 6b if the person you supported owned the home. This is the amount the person provided for his or her own support
|
21. |
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|
22. |
Is line 21 more than line 20?
No. You meet the support test for this person to be your qualifying child. If this person also meets the other tests to be a
qualifying child, stop here; do not complete lines 23–26. Otherwise, go to line 23 and fill out the rest of the worksheet
to determine if this person is your qualifying relative.
Yes. You do not meet the support test for this person to be either your qualifying child or your qualifying relative. Stop here.
|
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Did You Provide More Than Half? |
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23. |
Enter the amount others provided for the person's support. Include amounts provided by state, local, and other welfare societies
or agencies. Do not include any amounts included on line 1.
|
23. |
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24. |
Add lines 21 and 23 |
24. |
|
|
25. |
Subtract line 24 from line 19. This is the amount you provided for the person's support |
25. |
|
|
26. |
Is line 25 more than line 20?
Yes. You meet the support test for this person to be your qualifying relative.
No. You do not meet the support test for this person to be your qualifying relative. You cannot claim an exemption for this person
unless you can do so under a multiple support agreement, the support test for children of divorced or separated parents, or
the special rule for kidnapped children. See
Multiple Support Agreement
,
Support Test for Children of Divorced or Separated Parents
, or
Kidnapped child
under
Qualifying Relative.
.
|
|
The amount you can claim as a deduction for exemptions is reduced once your adjusted gross income (AGI) goes above a certain
level for your filing status. These levels are as follows:
You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing
separately), that your AGI exceeds the amount shown above for your filing status. However, you can lose no more than of the
dollar amount of your exemptions. In other words, each exemption cannot be reduced to less than $2,333.
If your AGI exceeds the level for your filing status, use Worksheet 2 to figure the amount of your deduction for exemptions. However, if you are claiming a $500 exemption for housing a Midwestern
displaced individual, use Form 8914 instead.
Worksheet 2. Worksheet for Determining the Deduction for Exemptions
1. |
Is the amount on Form 1040, line 38, or Form 1040A, line 22, more than the amount on line 4 below for your filing status?
|
|
|
□ |
No. |
Stop. Multiply $3,500 by the total number of exemptions claimed on line 6d of Form 1040 or Form 1040A and enter the result
on Form 1040, line 42, or Form 1040A, line 26.
|
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|
□ |
Yes. |
Continue. |
|
|
2. |
Multiply $3,500 by the total number of exemptions claimed on line 6d of Form 1040 or Form 1040A. |
2. |
|
3. |
Enter the amount from Form 1040, line 38, or Form 1040A, line 22 |
3. |
|
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|
4. |
Enter the amount shown below for your filing status: |
|
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|
-
Married filing separately—$119,975
-
Single—$159,950
-
Head of household—$199,950
-
Married filing jointly or Qualifying widow(er)—$239,950
|
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4. |
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5. |
Subtract line 4 from line 3. . |
5. |
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6. |
Is line 5 more than $122,500 ($61,250 if married filing separately)? |
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□ |
Yes. |
Multiply $2,333 by the total number of exemptions claimed on line 6d of Form 1040 or Form 1040A. Enter the result here and
on Form 1040, line 42, or Form 1040A, line 26. Do not complete the rest of this worksheet.
|
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□ |
No. |
Divide line 5 by $2,500 ($1,250 if married filing separately). If the result is not a whole number, increase it to the next
whole number (for example, increase 0.0004 to 1).
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6. |
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7. |
Multiply line 6 by 2% (.02) and enter the result as a decimal . |
7. |
|
8. |
Multiply line 2 by line 7 |
8. |
|
9. |
Divide line 8 by 3.0 |
9. |
|
10. |
Deduction for exemptions. Subtract line 9 from line 2. Enter the result here and on Form 1040, line 42, or Form 1040A, line 26
|
10. |
|
Social Security Numbers for Dependents
You must list the social security number (SSN) of any dependent for whom you claim an exemption in column (2) of line 6c of
your Form 1040 or Form 1040A.
If you do not list the dependent's SSN when required or if you list an incorrect SSN, the exemption may be disallowed.
No SSN.
If a person for whom you expect to claim an exemption on your return does not have an SSN, either you or that person
should apply for an SSN as soon as possible by filing Form SS-5, Application for a Social Security Card, with the Social Security
Administration (SSA). You can get Form SS-5 online at www.socialsecurity.gov or at your local SSA office.
It usually takes about 2 weeks to get an SSN. If you do not have a required SSN by the filing due date, you can file
Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, for an extension of time
to file.
Born and died in 2008.
If your child was born and died in 2008, and you do not have an SSN for the child, you may attach a copy of the child's
birth certificate, death certificate, or hospital records instead. The document must show the child was born alive. If you
do this, enter “ DIED” in column (2) of line 6c of your Form 1040 or Form 1040A.
Alien or adoptee with no SSN.
If your dependent does not have and cannot get an SSN, you must list the individual taxpayer identification number
(ITIN) or adoption taxpayer identification number (ATIN) instead of an SSN.
Taxpayer identification numbers for aliens.
If your dependent is a resident or nonresident alien who does not have and is not eligible to get an SSN, your dependent
must apply for an individual taxpayer identification number (ITIN). For details on how to apply, see Form W-7, Application
for IRS Individual Taxpayer Identification Number.
Taxpayer identification numbers for adoptees.
If you have a child who was placed with you by an authorized placement agency, you may be able to claim an exemption for the
child. However, if you cannot get an SSN or an ITIN for the child, you must get an adoption taxpayer identification number
(ATIN) for the child from the IRS. See Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions,
for details.
Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. If you have a choice, you
can use the method that gives you the lower tax.
The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. It is a benefit that eliminates
the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on
Schedule A of Form 1040. The standard deduction is higher for taxpayers who:
-
Are 65 or older,
-
Are blind,
-
Pay state or local real estate taxes, or
-
Have a net disaster loss from a federally declared disaster.
You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions.
Persons not eligible for the standard deduction.
Your standard deduction is zero and you should itemize any deductions you have if:
-
You are married, filing a separate return, and your spouse itemizes deductions,
-
You are filing a tax return for a short tax year because of a change in your annual accounting period, or
-
You are a nonresident or dual-status alien during the year. You are considered a dual-status alien if you were both a nonresident
and resident alien during the year.
If you are a nonresident alien who is married to a U.S. citizen or resident alien at the end of the year, you can choose to
be treated as a U.S. resident. (See Publication 519.) If you make this choice, you can take the standard deduction.
If an exemption for you can be claimed on another person's return (such as your parents' return), your standard deduction
may be limited. See Standard Deduction for Dependents, later.
Standard Deduction Amount
The standard deduction amount depends on your filing status, whether you are 65 or older or blind, whether an exemption can
be claimed for you by another taxpayer, whether you pay state or local real estate taxes, and whether you have a net disaster
loss from a federally declared disaster. Generally, the standard deduction amounts are adjusted each year for inflation. Use
Worksheet 3 to figure your standard deduction amount.
The amount of the standard deduction for a decedent's final tax return is the same as it would have been had the decedent
continued to live. However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age
cannot be claimed.
Higher Standard Deduction for Age (65 or Older)
If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of
the year. You are considered 65 on the day before your 65th birthday.
Therefore, you can take a higher standard deduction for 2008 if you were born before January 2, 1944.
Higher Standard Deduction for Blindness
If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction.
You qualify for this benefit if you are totally or partly blind.
Partly blind.
If you are partly blind, you must get a certified statement from an eye doctor or registered optometrist that:
-
You cannot see better than 20/200 in the better eye with glasses or contact lenses, or
-
Your field of vision is not more than 20 degrees.
If your eye condition will never improve beyond these limits, the statement should include this fact. You must keep
the statement in your records.
If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because
of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify.
Spouse 65 or Older or Blind
You can take the higher standard deduction if your spouse is age 65 or older or blind and:
-
You file a joint return, or
-
You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and an exemption
for your spouse could not be claimed by another taxpayer.
You cannot claim the higher standard deduction for an individual other than yourself and your spouse.
Higher Standard Deduction for Real Estate Taxes
Your standard deduction is increased by any state and local real estate taxes you paid in 2008, up to $500 ($1,000 if married
filing jointly). The taxes must be state or local real estate taxes that would be deductible on Form 1040 (Schedule A) if
you were itemizing your deductions. Taxes deductible in arriving at adjusted gross income, such as taxes on business real
estate, and taxes on foreign real estate cannot be used to increase your standard deduction.
If you are increasing your standard deduction by the amount of real estate taxes you paid, be sure to check the box on line
39c of Form 1040 or line 23c of Form 1040A.
Higher Standard Deduction for Net Disaster Loss
Your standard deduction is increased by any net disaster loss from a federally declared disaster that occurred in 2008. This
amount is on Form 4684, line 18a.
If you are increasing your standard deduction by the amount of your net disaster loss, be sure to check the box on line 39c
of Form 1040.
See the instructions for Form 4684, Casualties and Thefts, and Publication 4492-B, Information for Affected Taxpayers in the
Midwestern Disaster Areas, for more information.
The following examples illustrate how to determine your standard deduction using Worksheet 3.
Example 1.
Larry, 46, and Donna, 33, are filing a joint return for 2008. Neither is blind, and neither can be claimed as a dependent.
They did not pay real estate taxes or have a net disaster loss. They decide not to itemize their deductions. Because they
are married filing jointly, they enter $10,900 on line 1 of Worksheet 3. They check the “No” box on line 2, so they also enter $10,900 on lines 4 and 10. Their standard deduction is $10,900.
Example 2.
The facts are the same as in Example 1, except that Larry is blind at the end of 2008, so he and Donna enter $1,050 on line
5 of Worksheet 3. They then enter $11,950 ($10,900 + $1,050) on line 10, so their standard deduction is $11,950.
Example 3.
Bill and Lisa are filing a joint return for 2008. Both are over age 65. Neither is blind, and neither can be claimed as a
dependent. They did not pay real estate taxes or have a net disaster loss. They do not itemize deductions, so they use Worksheet
3. Because they are married filing jointly, they enter $10,900 on line 1. They check the “No” box on line 2, so they also enter $10,900 on line 4. Because they are both over age 65, they enter $2,100 ($1,050 × 2) on
line 5. They enter $13,000 ($10,900 + $2,100) on line 10, so their standard deduction is $13,000.
Example 4.
The facts are the same as in Example 3 except that Bill and Lisa paid $3,000 in local real estate taxes on their home in 2008,
so they enter $3,000 on line 7 of the worksheet. They then enter $1,000 on lines 8 and 9 and $14,000 ($10,900 + $2,100 + $1,000)
on line 10. Their standard deduction is $14,000.
Example 5.
The facts are the same as in Example 4 except that Bill and Lisa had a net disaster loss from a federally declared disaster
of $8,000. That is the amount on line 18a of their Form 4684. They enter $8,000 on line 6 of their standard deduction worksheet.
On line 10 of the worksheet, they enter $22,000 ($10,900 + $2,100 + $8,000 + $1,000), which is their standard deduction.
Standard Deduction for Dependents
The standard deduction for an individual for whom an exemption can be claimed on another person's tax return is generally
limited to the greater of:
-
$900, or
-
The individual's earned income for the year plus $300 (but not more than the regular standard deduction amount, generally
$5,450).
However, if the individual is 65 or older or blind, paid state or local real estate taxes, or had a net disaster loss from
a federally declared disaster, the standard deduction may be higher.
If an exemption for you (or your spouse if you are married filing jointly) can be claimed on someone else's return, use Worksheet
3 to determine your standard deduction.
Earned income defined.
Earned income is salaries, wages, tips, professional fees, and other amounts received as pay for work you actually
perform.
For purposes of the standard deduction, earned income also includes any part of a scholarship or fellowship grant that you
must include in your gross income. See chapter 1 of Publication 970 for more information on what qualifies as a scholarship
or fellowship grant.
Example 1.
Michael is single. His parents claim an exemption for him on their 2008 tax return. He has interest income of $780 and wages
of $150. He did not pay real estate taxes or have a net disaster loss. He has no itemized deductions. Michael uses Worksheet
3 to find his standard deduction. Because he is single, he enters $5,450 on line 1. He checks the “Yes” box on line 2, enters $900 on line 3, and also enters $900 (the smaller of line 1 and line 3) on line 4. He leaves lines
5, 6, 7, 8, and 9 blank and enters $900 on line 10. His standard deduction is $900.
Example 2.
Joe, a 22-year-old full-time college student, is claimed on his parents' 2008 tax return. Joe is married and files a separate
return. His wife does not itemize deductions on her separate return. Joe has $1,500 in interest income and wages of $3,800.
He did not pay real estate taxes or have a net disaster loss. He has no itemized deductions. Joe finds his standard deduction
by using Worksheet 3. Because he is married filing a separate return, he enters $5,450 on line 1. He checks the “Yes” box on line 2, enters $4,100 ($3,800 + $300) on line 3, and also enters $4,100 (the smaller of line 1 and line 3) on line
4. He leaves lines 5, 6, 7, 8, and 9 blank and enters $4,100 on line 10. His standard deduction is $4,100.
Example 3.
Amy, who is single, is claimed on her parents' 2008 return. She is 18 years old and blind. She has interest income of $1,300
and wages of $2,900. She did not pay real estate taxes or have a net disaster loss. She has no itemized deductions. Amy finds
her standard deduction by using Worksheet 3. Because she is single, she enters $5,450 on line 1. She checks the “Yes” box on line 2, enters $3,200 ($2,900 + $300) on line 3, and also enters $3,200 (the smaller of line 1 and line 3) on line
4. Because she is blind, she enters $1,350 on line 5. Because she did not pay real estate taxes or have a net disaster loss,
she does not fill out lines 6, 7, 8, and 9. She enters $4,550 ($3,200 + $1,350) on line 10. Her standard deduction is $4,550.
You should itemize deductions if your total deductions are more than the standard deduction amount. Also, you should itemize
if you do not qualify for the standard deduction, as discussed earlier under
Persons not eligible for the standard deduction
.
You should first figure your itemized deductions and compare that amount to your standard deduction to make sure you are using
the method that gives you the greater benefit.
You may be subject to a limit on some of your itemized deductions if your adjusted gross income (AGI) is more than $159,950
($79,975 if you are married filing separately). See the instructions for Schedule A (Form 1040), line 29, for more information
on figuring the correct amount of your itemized deductions.
When to itemize.
You may benefit from itemizing your deductions on Schedule A (Form 1040) if you:
-
Do not qualify for the standard deduction, or the amount you can claim is limited,
-
Had large uninsured medical and dental expenses during the year,
-
Paid interest and taxes on your home,
-
Had large unreimbursed employee business expenses or other miscellaneous deductions,
-
Had large uninsured casualty or theft losses,
-
Made large contributions to qualified charities, or
-
Have total itemized deductions that are more than the standard deduction to which you otherwise are entitled.
If you decide to itemize your deductions, complete Schedule A and attach it to your Form 1040. Enter the amount from
Schedule A, line 29, on Form 1040, line 40.
Electing to itemize for state tax or other purposes.
Even if your itemized deductions are less than the amount of your standard deduction, you can elect to itemize deductions
on your federal return rather than take the standard deduction. You may want to do this, for example, if the tax benefit of
being able to itemize your deductions on your state tax return is greater than the tax benefit you lose on your federal return
by not taking the standard deduction. To make this election, you must check the box on line 30 of Schedule A.
Changing your mind.
If you do not itemize your deductions and later find that you should have itemized — or if you itemize your deductions
and later find you should not have — you can change your return by filing Form 1040X.
Married persons who filed separate returns.
You can change methods of taking deductions only if you and your spouse both make the same changes. Both of you must
file a consent to assessment for any additional tax either one may owe as a result of the change.
You and your spouse can use the method that gives you the lower total tax, even though one of you may pay more tax than you
would have paid by using the other method. You both must use the same method of claiming deductions. If one itemizes deductions,
the other should itemize because he or she will not qualify for the standard deduction. See
Persons not eligible for the standard deduction
, earlier.
Worksheet 3. 2008 Standard Deduction Worksheet
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from
the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
Contacting your Taxpayer Advocate.
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers
who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal
channels, or who believe that an IRS system or procedure is not working as it should.
You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059
to see if you are eligible for assistance. You can also call or write your local taxpayer advocate, whose phone number and
address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service—Your Voice at the
IRS. You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order),
or ask an IRS employee to complete it on your behalf. For more information, go to www.irs.gov/advocate.
Low Income Taxpayer Clinics (LITCs).
LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies
with the IRS for free or for a nominal charge. The clinics also provide tax education and outreach for taxpayers who speak
English as a second language. Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area.
It is available at www.irs.gov or your local IRS office.
Free tax services.
To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. It contains lists of
free tax information sources, including publications, services, and free tax education and assistance programs. It also has
an index of over 100 TeleTax topics (recorded tax information) you can listen to on your telephone.
Accessible versions of IRS published products are available on request in a variety of alternative formats for people
with disabilities.
Free help with your return.
Free help in preparing your return is available nationwide from IRS-trained volunteers. The Volunteer Income Tax Assistance
(VITA) program is designed to help low-income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to
assist taxpayers age 60 and older with their tax returns. Many VITA sites offer free electronic filing and all volunteers
will let you know about credits and deductions you may be entitled to claim. To find the nearest VITA or TCE site, call 1-800-829-1040.
As part of the TCE program, AARP offers the Tax-Aide counseling program. To find the nearest AARP Tax-Aide site, call
1-888-227-7669 or visit AARP's website at www.aarp.org/money/taxaide.
For more information on these programs, go to www.irs.gov and enter keyword “ VITA” in the upper right-hand corner.
Internet. You can access the IRS website at www.irs.gov 24 hours a day, 7 days a week to:
-
E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
-
Check the status of your 2008 refund. Go to www.irs.gov and click on Where's My Refund. Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper
return. If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Have your 2008 tax
return available so you can provide your social security number, your filing status, and the exact whole dollar amount of
your refund.
-
Download forms, instructions, and publications.
-
Order IRS products online.
-
Research your tax questions online.
-
Search publications online by topic or keyword.
-
View Internal Revenue Bulletins (IRBs) published in the last few years.
-
Figure your withholding allowances using the withholding calculator online at www.irs.gov/individuals.
-
Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant.
-
Sign up to receive local and national tax news by email.
-
Get information on starting and operating a small business.
Phone. Many services are available by phone.
-
Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You
should receive your order within 10 days.
-
Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
-
Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can
explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance
Center for an appointment. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
-
TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
-
TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
-
Refund information. To check the status of your 2008 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information
24 hours a day, 7 days a week). Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to
4 weeks after mailing a paper return. If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically).
Have your 2008 tax return available so you can provide your social security number, your filing status, and the exact whole
dollar amount of your refund. Refunds are sent out weekly on Fridays. If you check the status of your refund and are not given
the date it will be issued, please wait until the next week before checking back.
-
Other refund information. To check the status of a prior year refund or amended return refund, call 1-800-829-1954.
Evaluating the quality of our telephone services. To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality
of our telephone services. One method is for a second IRS representative to listen in on or record random telephone calls.
Another is to ask some callers to complete a short survey at the end of the call.
Walk-in. Many products and services are available on a walk-in basis.
-
Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications.
Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply
stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices
and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available
for research purposes.
-
Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee
can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need to resolve
a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking
with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an
IRS representative face-to-face. No appointment is necessary—just walk in. If you prefer, you can call your local Center and
leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business
days to schedule an in-person appointment at your convenience. If you have an ongoing, complex tax account problem or a special
need, such as a disability, an appointment can be requested. All other issues will be handled without an appointment. To find
the number of your local office, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
Mail. You can send your order for forms, instructions, and publications to the address below. You should receive a response within
10 days after your request is received.
Internal Revenue Service 1201 N. Mitsubishi Motorway Bloomington, IL 61705-6613
DVD for tax products. You can order Publication 1796, IRS Tax Products DVD, and obtain:
-
Current-year forms, instructions, and publications.
-
Prior-year forms, instructions, and publications.
-
Tax Map: an electronic research tool and finding aid.
-
Tax law frequently asked questions.
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Tax Topics from the IRS telephone response system.
-
Internal Revenue Code—Title 26 of the U.S. Code.
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Fill-in, print, and save features for most tax forms.
-
Internal Revenue Bulletins.
-
Toll-free and email technical support.
-
Two releases during the year. – The first release will ship the beginning of January 2009. – The final release will ship the beginning of March 2009.
Purchase the DVD from National Technical Information Service (NTIS) at www.irs.gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). The price is
discounted to $25 for orders placed prior to December 1, 2008.
Small Business Resource Guide 2009. This online guide is a must for every small business owner or any taxpayer about to start a business. This year's guide includes:
-
Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
-
All the business tax forms, instructions, and publications needed to successfully manage a business.
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Tax law changes for 2009.
-
Tax Map: an electronic research tool and finding aid.
-
Web links to various government agencies, business associations, and IRS organizations.
-
“Rate the Product” survey—your opportunity to suggest changes for future editions.
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A site map of the guide to help you navigate the pages with ease.
-
An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes.
The information is updated during the year. Visit www.irs.gov and enter keyword “ SBRG” in the upper right-hand corner for more information.
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