Intermediate Credits
Maximum Eligible expenses for CDCC
3,000 for one qualifying individual, 6,000 for two or more Expenses do not have to be evenly distributed
Residential Energy Efficiency Property (REEP) credit
30% of cost of property plus installation Nonrefundable Solar, small wind, geothermal, natural gas, propane or oil furnaces
Retirement Saving Contribution Credit
Nonrefundable credit for Voluntary contributions to eligible retirement savings account Up to $1000 per tp, $2000 for MFJ Form 8880
Amount of tp's contributions...
is reduced by distributions in the previous two years, current year and period following credit year return
CTC - Reduction for AGI above threshold
$50 for ever $1000 of income
LLC Phaseout
$54,000 MFJ $108,000
ACTC based on income
15% of earned income over $3,000 CANNOT exceed CTC amount
AOC Phaseout
$90,000 or $180,000 for MFJ
Eligible taxpayers for RSCC
At least 18 May NOT be full-time student Cannot be claimed as a dependent
Nonbusiness Energy Property Credit (NEPC)
10% of cost of energy improvements Insulation, Exterior Windows, Doors, Metal Roofs Lifetime limit of $500
AOC Credit Amount
100% of first $2000 25% of second $2000 40% refundable
Qualified Expenses for AC
Adoption fees Court costs Attorney fees Travel Expenses (including meals and lodging) Re-adoption expenses for foreign child
Foreign adoption finalized in US
Adoption order or decree must be retained
ACTC based on 3 or more qualifying children
After calculating 15%, still does not get max credit Can qualify if SS and Medicare taxes exceed EIC
AOC Qualified Explenses
Also include course-related books, supplies and equipment
Education Credits
American Opportunity Credit and Lifetime Learning Credit May be limited by tax MAGI and tax liability MFS tp's DO NOT qualify for either credit Form 8863
EITC Requirements for tp's with no qualifying children
At least 25, buy younger than 65 Cannot be dependent, includes spouse if married Must live in US for more than half the year: 50 states and DC only
CDCC credit amount
Based on percentage of earned income Full-time student or disabled ind deemed to earn $250 per month for purposes of this credit Ranges from 35% to 20% with no phaseout
Phaseout
Between $197,880 and $237,880
Lifetime Learning Credit Expenses
Books, supplies and equipment ONLY when expenses must be paid directly to institution as condition of enrol
If child turns 13 during tax year..
Can claim care expenses incurred before birthday
Qualifying Individual Req for CDCC
Child under Age 13 Spouse unable to care for self and lives with the tp more than half the year Individual of any age who is unable to care for self, lives with tp more than half the year, and is tp's dependent
EITC Due Diligence Requirements
Completion of Form 8867 or equivalent Computation of credit Knowledge Record Retention: 8867 and EITC worksheet for 3 years after June 30th
Lifetime Learning Credit
Courses do not have to lead to degree or cert Do not need to be enrolled at least half time 20% of eligible expenses up to $10,000
Plug in Electric Vehicle Credit
Credit for purchase of qualified vehicle Manufacturer's certification
Home purchased between April 8, 2008 and January 1, 2009
Credit must be paid back in 15 equal installments
IRS has right to request copy of documentation. Qualifying documents:
Decree of Adoption (if final) ATIN for child Home study Placement agreement Hospital authorizing release of newborn Court - placement
To qualify for D or S parent exception
Decree, written separation agreement, or lived apart for last 6 months Parent's together provide more than 1/2 of support Total time in parental custody must be > 1/2 year Form 8332 must be filled out
Additional CTC Requirements
Earned income >$3,000 OR 3 or more qualifying children
Eligible Institution
Eligible to participate in Financial Aid Program administered by DOE
TP's who paid care-related expenses are eligible for Child and Dependent care credit if they are:
Employed Self-Employed Actively searching for employment Full-time student
Eligible expenses for CDCC
Employment-related and for the care of qualifying individual Education or transportation expenses do not qualify
Non-Qualified Expenses for AC
Fees paid to adopt a spouses child Payments for surrogate parenting Payments for activities in violation of law Reimbursed expenses
Foreign, but not Hague docs
Foreign adoption decree IR-2 or IR-3 Visa
Foreign adoption covered by Hague Convention docs
Hague Adoption Certificate IH3-Visa Foreign Adoption decree, translated into english
Homebuyer's Credit
Homes purchased between April 9, 2008 and April 30, 2010
Divorced or Separated Parent Exception
If custodial parent releases claim to exemption: Noncustodial parent can claim dependency and CTC Custodial parent can still claim HH, EITC and CDCC
CTC - Phaseout Thresholds (Modified AGI)
MFS $55,00 S, HH, QW $75,000 MFJ $110,000
Adoption Credit
Maximum for 2014 is $1390 MFS not eligible Form 8839 used to calculate credit Can carryover for up to 5 yrs
Taxpayer with child or dependent care FSA
May direct up to $5000 from both employer and employee funds TP who uses funds from FSA for care expenses MAY NOT claim those funds for CDCC
If EITC disallowed because of fraud..
May not claim EITC for net ten tax years
If EITC disallowed..
May not claim EITC for next two tax years
Special needs child - Ac amount
May take up to maximum credit regardless of expenses
TP with previous dis-allowance of EITC
Must file form 8862: Information to Claim Earned Income Credit after disallowance Unless disallowance was due to a qualifying child and new EITC claim does not include that chile
For daycare provider..
Must supply EIN or SSN
For married tp's claiming CDCC, each must meet one requirement
Neither spouse can be stay-at-home, unless incapable of self-care
Eligibility Period of Expenses
See chart
Employer-Provided Adoption Benefits
Shown in box 12 or W-2 Excluded from taxable income Maximum exclusion is the same as the adoption credit
Qualified Expenses
Student Loans - paid by individual responsible for repaying Tuition and fees for course(s) taken during year and following 3 months
If adoption expenses extend over more than two years,
Subtract credit taken in previous years from maximum
If two unmarried tp's pay qualifying expenses to adopt a child..
They can divide the credit any way they choose
Other Tax Benefits for Education
Tuition and Fees Deduction Schedule A - Unreimbursed Business Expenses
Three requirements for special needs child:
US Citizen or Resident State agency - ineligible to return to parental custody State agency - child will not be adopted unless additional assistance is provided.
Earned Income Tax Credit (EITC) Requirements
US Citizen or Resident all year SSN's File a tax return Have earned income Have less than 3350 of investment income
Eligible child for AC
Under 18 OR Adult but unable to provide self-care
CTC - Qualifying Child: Additional Requirements
Under age 17 US Citizen, National or Resident (NOT Canada or Mex)
Non-special needs child - AC amount
Up to expenses or maximum credit
CDCC expense are eligible in..
Year paid.
Amount of RSCC is...
a percentage of taxpayers contribution based on status and modified AGI
Contributions to IRA's
can be made up to filing date Can be used to increase saver's credit
After December 31, 2008 HBC must be repaid...
if house is no longer principal residence for three years after credit taken, and sold at a gain Exception for military members required to relocate