The Income Tax Return

The four chapters in this part provide basic information on the tax system. They take you through the first steps of filling out a tax return — such as deciding what your filing status is, how many exemptions you can take, and what form to file. They also discuss recordkeeping requirements, IRS e-file (electronic filing), certain penalties, and the two methods used to pay tax during the year: withholding and estimated tax.

1. Filing Information

What’s New

At the time this publication went to print, Congress was considering legislation that would do the following.

Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires.
Extend certain tax benefits that expired at the end of 2016 and that currently can’t be claimed on your 2017 tax return.
Change certain other tax provisions.

To learn whether this legislation was enacted resulting in changes that affect your 2017 tax return, go to Recent Developments at IRS.gov/Pub17.

Due date of return. The due date to file your tax return is April 17, 2018. The due date is April 17 because April 15 is a Sunday and the Emancipation Day holiday in the District of Columbia is observed on April 16—even if you do not live in the District of Columbia.

Who must file. Generally, the amount of income you can receive before you must file a return has been increased. See Table 1-1, Table 1-2, and Table 1-3 for the specific amounts.

Secure access. To combat identity fraud, the IRS has upgraded its identity verification process for certain self-help tools on IRS.gov. To find out what types of information new users will need, go to IRS.gov/SecureAccess.

Access your online account. You must authenticate your identity. To securely log in to your federal tax account, go to IRS.gov/Account. View the amount you owe, review 18 months of payment history, access online payment options, and create or modify an online payment agreement. You can also access your tax records online.

Mailing your return. If you live in Connecticut, the District of Columbia, Maryland, Pennsylvania, Rhode Island, or West Virginia and you are mailing in your return, you will need to mail it to a different address this year. See Where To File near the end of this publication.

Reminders

File online. Rather than filing a return on paper, you may be able to file electronically using IRS e-file. For more information, see Why Should I File Electronically , later.

Change of address. If you change your address, you should notify the IRS. You can use Form 8822 to notify the IRS of the change. See Change of Address , later, under What Happens After I File.

Enter your social security number. You must enter your social security number (SSN) in the spaces provided on your tax return. If you file a joint return, enter the SSNs in the same order as the names.

Direct deposit of refund. Instead of getting a paper check, you may be able to have your refund deposited directly into your account at a bank or other financial institution. See Direct Deposit under Refunds, later. If you choose direct deposit of your refund, you may be able to split the refund among two or three accounts.

Pay online or by phone. If you owe additional tax, you may be able to pay online or by phone. See How To Pay , later.

Installment agreement. If you can’t pay the full amount due with your return, you may ask to make monthly installment payments. See Installment Agreement , later, under Amount You Owe. You may be able to apply online for a payment agreement if you owe federal tax, interest, and penalties.

Automatic 6-month extension. You can get an automatic 6-month extension to file your tax return if, no later than the date your return is due, you file Form 4868. See Automatic Extension , later.

Service in combat zone. You are allowed extra time to take care of your tax matters if you are a member of the Armed Forces who served in a combat zone, or if you served in a combat zone in support of the Armed Forces. See Individuals Serving in Combat Zone , later, under When Do I Have To File.

Adoption taxpayer identification number. If a child has been placed in your home for purposes of legal adoption and you won’t be able to get a social security number for the child in time to file your return, you may be able to get an adoption taxpayer identification number (ATIN). For more information, see Social Security Number (SSN) , later.

Taxpayer identification number for aliens. If you or your dependent is a nonresident or resident alien who doesn’t have and isn’t eligible to get a social security number, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. For more information, see Social Security Number (SSN) , later.

Individual taxpayer identification number (ITIN) renewal. Some ITINs must be renewed. If you haven’t used your ITIN on a U.S. tax return at least once for tax years 2014, 2015 or 2016, or if your ITIN has the middle digits 70, 71, 72, or 80 (9NN-70-NNNN), it will expire at the end of 2017 and must be renewed if you need to file a U.S. federal tax return in 2018. You don’t need to renew your ITIN if you don’t need to file a federal tax return. You can find more information at IRS.gov/ITIN.

Frivolous tax submissions. The IRS has published a list of positions that are identified as frivolous. The penalty for filing a frivolous tax return is $5,000. Also, the $5,000 penalty will apply to other specified frivolous submissions. For more information, see Civil Penalties , later.

Introduction

This chapter discusses the following topics.

Whether you have to file a return.
Which form to use.
How to file electronically.
How to file for free.
When, how, and where to file your return.
What happens if you pay too little or too much tax.
What records you should keep and how long you should keep them.
How you can change a return you have already filed.

Do I Have To File a Return?

You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico and you meet the filing requirements for any of the following categories that apply to you.

Individuals in general. (There are special rules for surviving spouses, executors, administrators, legal representatives, U.S. citizens and residents living outside the United States, residents of Puerto Rico, and individuals with income from U.S. possessions.)
Certain children under age 19 or full-time students.
Self-employed persons.
Aliens

The filing requirements for each category are explained in this chapter.

The filing requirements apply even if you don’t owe tax.

Even if you don’t have to file a return, it may be to your advantage to do so. See Who Should File, later.

File only one federal income tax return for the year regardless of how many jobs you had, how many Forms W-2 you received, or how many states you lived in during the year. Don’t file more than one original return for the same year, even if you have not gotten your refund or have not heard from the IRS since you filed.

Individuals—In General

If you are a U.S. citizen or resident, whether you must file a return depends on three factors.

Your gross income.
Your filing status.
Your age.

To find out whether you must file, see Table 1-1, Table 1-2, and Table 1-3. Even if no table shows that you must file, you may need to file to get money back. See Who Should File , later.

Gross income.

This includes all income you receive in the form of money, goods, property, and services that isn’t exempt from tax. It also includes income from sources outside the United States or from the sale of your main home (even if you can exclude all or part of it). Include part of your social security benefits if:

You were married, filing a separate return, and you lived with your spouse at any time during 2017; or
Half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly).

If either (1) or (2) applies, see the instructions for Form 1040 or 1040A, or Pub. 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the social security benefits you must include in gross income.

Common types of income are discussed in Part Two of this publication.

Community income.

If you are married and your permanent home is in a community property state, half of any income described by state law as community income may be considered yours. This affects your federal taxes, including whether you must file if you don’t file a joint return with your spouse. See Pub. 555 for more information.

Nevada, Washington, and California domestic partners.

A registered domestic partner in Nevada, Washington, or California generally must report half the combined community income of the individual and his or her domestic partner. See Pub. 555.

Self-employed individuals.

If you are self-employed, your gross income includes the amount on line 7 of Schedule C (Form 1040), Profit or Loss From Business; line 1 of Schedule C-EZ (Form 1040), Net Profit From Business; and line 9 of Schedule F (Form 1040), Profit or Loss From Farming. See Self-Employed Persons , later, for more information about your filing requirements.

If you don’t report all of your self-employment income, your social security benefits may be lower when you retire.

Filing status.

Your filing status depends on whether you are single or married and on your family situation. Your filing status is determined on the last day of your tax year, which is December 31 for most taxpayers. See chapter 2 for an explanation of each filing status.

Age.

If you are 65 or older at the end of the year, you generally can have a higher amount of gross income than other taxpayers before you must file. See Table 1-1. You are considered 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2018, you are considered 65 for 2017.

Table 1-1. 2017 Filing Requirements for Most Taxpayers

IF your filing status is…		AND at the end of 2017 you were…*	THEN file a return if your gross income was at least…**
Single		under 65	$10,400
		65 or older	$11,950
Married filing jointly***		under 65 (both spouses)	$20,800
		65 or older (one spouse)	$22,050
		65 or older (both spouses)	$23,300
Married filing separately		any age	$ 4,050
Head of household		under 65	$13,400
		65 or older	$14,950
Qualifying widow(er)		under 65	$16,750
Qualifying widow(er)		65 or older	$18,000
*	If you were born on January 1, 1953, you are considered to be age 65 at the end of 2017. (If your spouse died in 2017 or if you are preparing a return for someone who died in 2017, see Pub. 501.)
**	Gross income means all income you received in the form of money, goods, property, and services that isn’t exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Don’t include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2017 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for Form 1040 or 1040A or Pub. 915 to figure the taxable part of social security benefits you must include in gross income. Gross income includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, don’t reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9.
***	If you didn’t live with your spouse at the end of 2017 (or on the date your spouse died) and your gross income was at least $4,050, you must file a return regardless of your age.

Surviving Spouses, Executors, Administrators, and Legal Representatives

You must file a final return for a decedent (a person who died) if both of the following are true.

You are the surviving spouse, executor, administrator, or legal representative.

The decedent met the filing requirements at the date of death.

For more information on rules for filing a decedent’s final return, see Pub. 559.

U.S. Citizens and Resident Aliens Living Abroad

To determine whether you must file a return, include in your gross income any income you received abroad, including any income you can exclude under the foreign earned income exclusion. For information on special tax rules that may apply to you, see Pub. 54. It is available online and at most U.S. embassies and consulates. See How To Get Tax Help in the back of this publication.

Residents of Puerto Rico

If you are a U.S. citizen and also a bona fide resident of Puerto Rico, you generally must file a U.S. income tax return for any year in which 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 entire year, your U.S. gross income doesn’t include income from sources within
Puerto Rico. It does, however, include any income you received for your services as an employee of the United States or a U.S. agency. If you receive income from Puerto Rican sources that isn’t subject to U.S. tax, you must reduce your standard deduction. As a result, the amount of income you must have before you are required to file a U.S. income tax return is lower than the applicable amount in Table 1-1 or Table 1-2. For more information, see Pub. 570.

Individuals With Income From U.S. Possessions

If you had income from Guam, the Commonwealth of the 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 island government. See Pub. 570 for more information.

Dependents

If you are a dependent (one who meets the dependency tests in chapter 3), see Table 1-2 to find out whether you must file a return. You also must file if your situation is described in Table 1-3.

Responsibility of parent.

Generally, a child is responsible for filing his or her own tax return and for paying any tax on the return. If a dependent child must file an income tax return but can’t file due to age or any other reason, then a parent, guardian, or other legally responsible person must file it for the child. If the child can’t sign the return, the parent or guardian must sign the child’s name followed by the words “By (your signature), parent for minor child.”

Child’s earnings.

Amounts a child earns by performing services are included in his or her gross income and not the gross income of the parent. This is true even if under local law the child’s parent has the right to the earnings and may actually have received them. But if the child doesn’t pay the tax due on this income, the parent is liable for the tax.

Certain Children Under Age 19 or Full-Time Students

If a child’s only income is interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends), the child was under age 19 at the end of 2017 or was a full-time student under age 24 at the end of 2017, and certain other conditions are met, a parent can elect to include the child’s income on the parent’s return. If this election is made, the child doesn’t have to file a return. See Parent’s Election To Report Child’s Interest and Dividends in chapter 31.

Self-Employed Persons

You are self-employed if you:

Carry on a trade or business as a sole proprietor,
Are an independent contractor,
Are a member of a partnership, or
Are in business for yourself in any other way.

Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job.

You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if:

Your net earnings from self-employment (excluding church employee income) were $400 or more, or
You had church employee income of $108.28 or more. (See Table 1-3.)

Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee’s wages. For more information about this tax, see Pub. 334, Tax Guide for Small Business.

Employees of foreign governments or international organizations.

If you are a U.S. citizen who works in the United States for an international organization, a foreign government, or a wholly owned instrumentality of a foreign government, and your employer isn’t required to withhold social security and Medicare taxes from your wages, you must include your earnings from services performed in the United States when figuring your net earnings from self-employment.

Ministers.

You must include income from services you performed as a minister when figuring your net earnings from self-employment, unless you have an exemption from self-employment tax. This also applies to Christian Science practitioners and members of a religious order who have not taken a vow of poverty. For more information, see Pub. 517.

Table 1-2. 2017 Filing Requirements for Dependents

See chapter 3 to find out if someone can claim you as a dependent.

If your parents (or someone else) can claim you as a dependent, use this table to see if you must file a return. (See Table 1-3 for other situations when you must file.)
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 salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. (See Scholarships and fellowships in chapter 12.) Gross income is the total of your earned and unearned income.
If your gross income was $4,050 or more, you usually can’t be claimed as a dependent unless you are a qualifying child. For details, see Exemptions for Dependents in chapter 3.
Single dependents—Were you either age 65 or older or blind?
□	No.	You must file a return if any of the following apply.
		•	Your unearned income was more than $1,050.
		•	Your earned income was more than $6,350.
		•	Your gross income was more than the larger of:
			•	$1,050, or
			•	Your earned income (up to $6,000) plus $350.
□	Yes.	You must file a return if any of the following apply.
		•	Your unearned income was more than $2,600 ($4,150 if 65 or older and blind).
		•	Your earned income was more than $7,900 ($9,450 if 65 or older and blind).
		•	Your gross income was more than the larger of:
			•	$2,600 ($4,150 if 65 or older and blind), or
			•	Your earned income (up to $6,000) plus $1,900 ($3,450 if 65 or older and blind).
Married dependents—Were you either age 65 or older or blind?
□	No.	You must file a return if any of the following apply.
		•	Your unearned income was more than $1,050.
		•	Your earned income was more than $6,350.
		•	Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
		•	Your gross income was more than the larger of:
			•	$1,050, or
			•	Your earned income (up to $6,000) plus $350.
□	Yes.	You must file a return if any of the following apply.
		•	Your unearned income was more than $2,300 ($3,550 if 65 or older and blind).
		•	Your earned income was more than $7,600 ($8,850 if 65 or older and blind).
		•	Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
		•	Your gross income was more than the larger of:
			•	$2,300 ($3,550 if 65 or older and blind), or
			•	Your earned income (up to $6,000) plus $1,600 ($2,850 if 65 or older and blind).

Aliens

Your status as an alien (resident, nonresident, or dual-status) determines whether and how you must file an income tax return.

The rules used to determine your alien status are discussed in Pub. 519, U.S. Tax Guide for Aliens.

Resident alien.

If you are a resident alien for the entire year, you must file a tax return following the same rules that apply to U.S. citizens. Use the forms discussed in this publication.

Nonresident alien.

If you are a nonresident alien, the rules and tax forms that apply to you are different from those that apply to U.S. citizens and resident aliens. See Pub. 519 to find out if U.S. income tax laws apply to you and which forms you should file.

Dual-status taxpayer.

If you are a resident alien for part of the tax year and a nonresident alien for the rest of the year, you are a dual-status taxpayer. Different rules apply for each part of the year. For information on dual-status taxpayers, see Pub. 519.

Table 1-3. Other Situations When You Must File a 2017 Return

You must file a return if any of the six conditions below apply for 2017.
1.		You owe any special taxes, including any of the following.
	a.	Alternative minimum tax.
	b.	Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.
	c.	Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.
	d.	Social security and Medicare tax on tips you didn’t report to your employer or on wages you received from an employer who didn’t withhold these taxes.
	e.	Recapture of first-time homebuyer credit.
	f.	Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional taxes on health savings accounts.
	g.	Recapture taxes.
2.		You (or your spouse, if filing jointly) received health savings account, Archer MSA, or Medicare Advantage MSA distributions.
3.		You had net earnings from self-employment of at least $400.
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.
5.		Advance payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage through the Marketplace. You or whoever enrolled you should have received Form(s) 1095-A showing the amount of the advance payments.
6.		Advance payments of the health coverage tax credit were made for you, your spouse, or a dependent. You or whoever enrolled you should have received Form(s) 1099-H showing the amount of the advance payments.

Who Should File

Even if you don’t have to file, you should file a federal income tax return to get money back if any of the following conditions apply.

You had federal income tax withheld or made estimated tax payments.

You qualify for the earned income credit. See chapter 36 for more information.

You qualify for the additional child tax credit. See chapter 34 for more information.
You qualify for the premium tax credit. See chapter 37 for more information.
You qualify for the health coverage tax credit. See chapter 38 for more information.

You qualify for the American opportunity credit. See chapter 35 for more information.
You qualify for the credit for federal tax on fuels. See chapter 30 for more information.

Which Form Should I Use?

You must use one of three forms to file your return: Form 1040EZ, Form 1040A, or Form 1040. (But also see Why Should I File Electronically , later.)

See the discussion under Form 1040 for when you must use that form.

Form 1040EZ

Form 1040EZ is the simplest form to use.

You can use Form 1040EZ if all of the following apply.

Your filing status is single or married filing jointly. If you were a nonresident alien at any time in 2017, your filing status must be married filing jointly.
You (and your spouse if married filing a joint return) were under age 65 and not blind at the end of 2017. If you were born on January 1, 1953, you are considered to be age 65 at the end of 2017.
You don’t claim any dependents.
Your taxable income is less than $100,000.
Your income is only from wages, salaries, tips, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
You don’t claim any adjustments to income, such as a deduction for IRA contributions or student loan interest.
You don’t claim any credits other than the earned income credit.
You don’t owe any household employment taxes on wages you paid to a household employee.
If you earned tips, they are included in boxes 5 and 7 of your Form W-2.
You are not a debtor in a chapter 11 bankruptcy case filed after October 16, 2005.

You must meet all of these requirements to use Form 1040EZ. If you don’t, you must use Form 1040A or Form 1040.

Figuring tax.

On Form 1040EZ, you can use only the tax table to figure your income tax. You can find the tax table in the Instructions for Form 1040EZ. You can’t use Form 1040EZ to report any other tax.

Form 1040A

If you don’t qualify to use Form 1040EZ, you may be able to use Form 1040A.

You can use Form 1040A if all of the following apply.

Your income is only from:
1. Wages, salaries, and tips;
2. Interest;
3. Ordinary dividends (including Alaska Permanent Fund dividends);
4. Capital gain distributions;
5. IRA distributions;
6. Pensions and annuities;
7. Unemployment compensation;
8. Taxable social security and railroad retirement benefits; and
9. Taxable scholarship and fellowship grants.

If you receive a capital gain distribution that includes unrecaptured section 1250 gain, section 1202 gain, or collectibles (28%) gain, you can’t use Form 1040A. You must use Form 1040.

Your taxable income is less than $100,000.
Your adjustments to income are for only the following items.
1. Educator expenses.
2. IRA deduction.
3. Student loan interest deduction.
You don’t itemize your deductions.
You claim only the following tax credits.
1. The credit for child and dependent care expenses. (See chapter 32.)
2. The credit for the elderly or the disabled. (See chapter 33.)
3. The education credits. (See chapter 35.)
4. The retirement savings contributions credit. (See chapter 38.)
5. The child tax credit. (See chapter 34.)
6. The earned income credit. (See chapter 36.)
7. The additional child tax credit. (See chapter 34.)
8. The premium tax credit. (See chapter 37.)
You didn’t have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option. (See Pub. 525.)

You can also use Form 1040A if you received employer-provided dependent care benefits or if you owe tax from the recapture of an education credit or the alternative minimum tax.

You must meet all these requirements to use Form 1040A. If you don’t, you must use Form 1040.

Form 1040

If you can’t use Form 1040EZ or Form 1040A, you must use Form 1040. You can use Form 1040 to report all types of income, deductions, and credits.

You may pay less tax by filing Form 1040 because you can take itemized deductions, some adjustments to income, and credits you can’t take on Form 1040A or Form 1040EZ.

You must use Form 1040 if any of the following apply.

Your taxable income is $100,000 or more.
You itemize your deductions on Schedule A.
You had income that can’t be reported on Form 1040EZ or Form 1040A, including tax-exempt interest from private activity bonds issued after August 7, 1986.
You claim any adjustments to gross income other than the adjustments listed earlier under Form 1040A.
Your Form W-2, box 12, shows uncollected employee tax (social security and Medicare tax) on tips (seechapter 6) or group-term life insurance (see chapter 5).
You received $20 or more in tips in any 1 month and didn’t report all of them to your employer. (See chapter 6.)
You were a bona fide resident of Puerto Rico and exclude income from sources in Puerto Rico.
You claim any credits other than the credits listed earlier under Form 1040A.
You owe the excise tax on insider stock compensation from an expatriated corporation.
Your Form W-2 shows an amount in box 12 with a code Z.
You had a qualified health savings account funding distribution from your IRA.
You are an employee and your employer didn’t withhold social security and Medicare tax.
You have to file other forms with your return to report certain exclusions, taxes, or transactions, such as Form 8959 or Form 8960.
You are a debtor in a bankruptcy case filed after October 16, 2005.
You must repay the first-time homebuyer credit.
You have adjusted gross income of more than $156,900 and must reduce the dollar amount of your exemptions.
You received a Form W-2 that incorrectly includes in box 1 amounts that are payments under a Medicaid waiver program, and you can’t get a corrected Form W-2.
You received Olympic or Paralympic medals or United States Olympic Committee prize money on account of your participation in the Olympic or Paralympic Games.

Why Should I File Electronically?

Electronic Filing

If your adjusted gross income (AGI) is less than a certain amount, you are eligible for Free File, a free tax software service offered by IRS partners, to prepare and e-file your return for free. If your income is over the amount, you are still eligible for Free File Fillable Forms, an electronic version of IRS paper forms. Table 1-4 lists the free ways to electronically file your return.

IRS e-file uses automation to replace most of the manual steps needed to process paper returns. As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. However, as with a paper return, you are responsible for making sure your return contains accurate information and is filed on time.

If your return is filed with IRS e-file, you will receive an acknowledgment that your return was received and accepted. If you owe tax, you can e-file and pay electronically. The IRS has processed more than one billion e-filed returns safely and securely. Using e-file doesn’t affect your chances of an IRS examination of your return.

Electronic return signatures.

To file your return electronically, you must sign the return electronically using a personal identification number (PIN). If you are filing online, you must use a Self-Select PIN. If you are filing electronically using a tax practitioner, you can use a Self-Select PIN or a Practitioner PIN.

Self-Select PIN.

The Self-Select PIN method allows you to create your own PIN. If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures.

A PIN is any combination of five digits you choose except five zeros. If you use a PIN, there is nothing to sign and nothing to mail—not even your Forms W-2.

To verify your identity, you will be prompted to enter your adjusted gross income (AGI) from your originally filed 2016 federal income tax return, if applicable. Don’t use your AGI from an amended return (Form 1040X) or a math error correction made by the IRS. AGI is the amount shown on your 2016 Form 1040, line 38; Form 1040A, line 22; or Form 1040EZ, line 4. If you don’t have your 2016 income tax return, you can request a transcript by using our automated self-service tool. Go to IRS.gov/Transcript. (If you filed electronically last year, you may use your prior year PIN to verify your identity instead of your prior year AGI. The prior year PIN is the five-digit PIN you used to electronically sign your 2016 return.) You will also be prompted to enter your date of birth.

Table 1-4. Free Ways To e-file

Use Free File for free tax software and free e-file.
•	IRS partners offer name-brand products for free.
•	Many taxpayers are eligible for Free File software.
•	Everyone is eligible for Free File Fillable Forms, an electronic version of IRS paper forms.
•	Free File software and Free File Fillable Forms are available only at IRS.gov/FreeFile.
Use VITA/TCE for free tax help from volunteers and free e-file.
•	Volunteers prepare your return and e-file it for free.
•	Some sites also offer do-it-yourself software.
•	You are eligible based either on your income or age.
•	Sites are located nationwide. Find one near you by visiting IRS.gov/VITA.

You can’t use the Self-Select PIN method if you are a first-time filer under age 16 at the end of 2017.

Practitioner PIN.

The Practitioner PIN method allows you to authorize your tax practitioner to enter or generate your PIN. The practitioner can provide you with details.

Form 8453.

You must send in a paper Form 8453 if you have to attach certain forms or other documents that can’t be electronically filed. For details, see Form 8453.

For more details, visit IRS.gov/efile.

Identity Protection PIN.

If the IRS gave you an identity protection personal identification number (IP PIN) because you were a victim of identity theft, enter it in the spaces provided on your tax form. If the IRS hasn’t given you this type of number, leave these spaces blank. For more information, see the instructions for Form 1040A or Form 1040.

Power of attorney.

If an agent is signing your return for you, a power of attorney (POA) must be filed. Attach the POA to Form 8453 and file it using that form’s instructions. See Signatures , later, for more information on POAs.

State returns.

In most states, you can file an electronic state return simultaneously with your federal return. For more information, check with your local IRS office, state tax agency, tax professional, or the IRS website at
IRS.gov/efile.

Refunds.

You can have a refund check mailed to you, or you can have your refund deposited directly to your checking or savings account or split among two or three accounts. With e-file, your refund will be issued faster than if you filed on paper.

As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or certain other federal nontax debts, such as student loans. See Offset against debts under Refunds, later.

Refund inquiries.

Information about your return will generally be available within 24 hours after the IRS receives your e-filedreturn. See Refund Information , later.

Amount you owe.

To avoid late-payment penalties and interest, pay your taxes in full by April 17, 2018. The due date is April 17 because April 15 is a Sunday and the Emancipation Day holiday in the District of Columbia is observed on April 16—even if you don’t live in the District of Columbia. See How To Pay , later, for information on how to pay the amount you owe.

Using Your Personal Computer

You can file your tax return in a fast, easy, and convenient way using your personal computer. A computer with Internet access and tax preparation software are all you need. Best of all, you can e-file from the comfort of your home 24 hours a day, 7 days a week.

IRS approved tax preparation software is available for online use on the Internet, for download from the Internet, and in retail stores.

For information, visit IRS.gov/efile.

Through Employers and Financial Institutions

Some businesses offer free e-file to their employees, members, or customers. Others offer it for a fee. Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit.

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-to-moderate income taxpayers, and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. Many VITA sites offer free electronic filing and all volunteers will let you know about the credits and deductions you may be entitled to claim. To find a site near you, call 1-800-906-9887. Or to find the nearest AARP TaxAide site, visit AARP’s website at www.aarp.org/taxaide or call 1-888-227-7669. For more information on these programs, go to IRS.gov/VITA.

Using a Tax Professional

Many tax professionals electronically file tax returns for their clients. You may personally enter your PIN or complete Form 8879, IRS e-file Signature Authorization, to authorize the tax professional to enter your PIN on your return.

Note.

Tax professionals may charge a fee for IRS e-file. Fees can vary depending on the professional and the specific services rendered.

When Do I Have To File?

April 17, 2018, is the due date for filing your 2017 income tax return if you use the calendar year. For a quick view of due dates for filing a return with or without an extension of time to file (discussed later), see Table 1-5.

Table 1-5. When To File Your 2017 Return

For U.S. citizens and residents who file returns on a calendar year.

	For Most Taxpayers	For Certain Taxpayers Outside the U.S.
No extension requested	April 17, 2018	June 15, 2018
Automatic extension	October 15, 2018	October 15, 2018

If you use a fiscal year (a year ending on the last day of any month except December, or a 52-53-week year), your income tax return is due by the 15th day of the 4th month after the close of your fiscal year.

When the due date for doing any act for tax purposes—filing a return, paying taxes, etc.—falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.

Filing paper returns on time.

Your paper return is filed on time if it is mailed in an envelope that is properly addressed, has enough postage, and is postmarked by the due date. If you send your return by registered mail, the date of the registration is the postmark date. The registration is evidence that the return was delivered. If you send a return by certified mail and have your receipt postmarked by a postal employee, the date on the receipt is the postmark date. The postmarked certified mail receipt is evidence that the return was delivered.

Private delivery services.

If you use a private delivery service designated by the IRS to send your return, the postmark date generally is the date the private delivery service records in its database or marks on the mailing label. The private delivery service can tell you how to get written proof of this date.

The following are designated private delivery services.

United Parcel Service (UPS): UPS Next Day Air Early AM, UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.
Federal Express (FedEx): FedEx First Overnight, FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Next Flight Out, FedEx International Priority, FedEx International First, and FedEx International Economy.
DHL Express 9:00, DHL Express 10:30, DHL Express 12:00, DHL Express Worldwide, DHL Express Envelope, DHL Import Express 10:30, DHL Import Express 12:00, and DHL Import Express Worldwide.

To check for any updates to the list of designated private delivery services, go to IRS.gov/PDS. For the IRS mailing addresses to use if you’re using a private delivery service, go to IRS.gov/PDSStreetAddresses.

The private delivery service can tell you how to get written proof of the mailing date.

Filing electronic returns on time.

If you use IRS e-file, your return is considered filed on time if the authorized electronic return transmitter postmarks the transmission by the due date. An authorized electronic return transmitter is a participant in the IRS e-file program that transmits electronic tax return information directly to the IRS.

The electronic postmark is a record of when the authorized electronic return transmitter received the transmission of your electronically filed return on its host system. The date and time in your time zone controls whether your electronically filed return is timely.

Filing late.

If you don’t file your return by the due date, you may have to pay a failure-to-file penalty and interest. For more information, see Penalties , later. Also see Interest under Amount You Owe.

If you were due a refund but you didn’t file a return, you generally must file within 3 years from the date the return was due (including extensions) to get that refund.

Nonresident alien.

If you are a nonresident alien and earn wages subject to U.S. income tax withholding, your 2017 U.S. income tax return (Form 1040NR or Form 1040NR-EZ) is due by:

April 17, 2018, if you use a calendar year; or
The 15th day of the 4th month after the end of your fiscal year if you use a fiscal year.

If you don’t earn wages subject to U.S. income tax withholding, your return is due by:

June 15, 2018, if you use a calendar year; or
The 15th day of the 6th month after the end of your fiscal year, if you use a fiscal year.

See Pub. 519 for more filing information.

Filing for a decedent.

If you must file a final income tax return for a taxpayer who died during the year (a decedent), the return is due by the 15th day of the 4th month after the end of the decedent’s normal tax year. See Pub. 559.

Extensions of Time To File

You may be able to get an extension of time to file your return. There are three types of situations where you may qualify for an extension:

Automatic extensions,
You are outside the United States, or
You are serving in a combat zone.

Automatic Extension

If you can’t file your 2017 return by the due date, you may be able to get an automatic 6-month extension of time to file.

Example.

If your return is due on April 17, 2018, you will have until October 15, 2018, to file.

If you don’t pay the tax due by the regular due date (April 15 for most taxpayers), you will owe interest. You may also be charged penalties, discussed later.

How to get the automatic extension.

You can get the automatic extension by:

Using IRS e-file(electronic filing), or
Filing a paper form.

E-file options.

There are two ways you can use e-file to get an extension of time to file. Complete Form 4868 to use as a worksheet. If you think you may owe tax when you file your return, use Part II of the form to estimate your balance due. If you e-file Form 4868 to the IRS, don’t also send a paper Form 4868.

E-file using your personal computer or a tax professional.

You can use a tax software package with your personal computer or a tax professional to file Form 4868 electronically. Free File and Free File Fillable Forms, both available at IRS.gov, allow you to prepare and e-fileForm 4868 for free. You will need to provide certain information from your 2016 tax return. If you wish to make a payment by direct transfer from your bank account, see Pay online under How To Pay, later, in this chapter.

E-file and pay by credit or debit card or by direct transfer from your bank account.

You can get an extension by paying part or all of your estimate of tax due by using a credit or debit card or by direct transfer from your bank account. You can do this by phone or over the Internet. You don’t file Form 4868. See Pay online under How To Pay, later, in this chapter.

Filing a paper Form 4868.

You can get an extension of time to file by filing a paper Form 4868. Mail it to the address shown in the form instructions.

If you want to make a payment with the form, make your check or money order payable to “United States Treasury.” Write your SSN, daytime phone number, and “2017 Form 4868” on your check or money order.

When to file.

You must request the automatic extension by the due date for your return. You can file your return any time before the 6-month extension period ends.

When you file your return.

Enter any payment you made related to the extension of time to file on Form 1040, line 70. If you file Form 1040EZ or Form 1040A, include that payment in your total payments on Form 1040EZ, line 9, or Form 1040A, line 46. Also enter “Form 4868” and the amount paid in the space to the left of line 9 or line 46.

Individuals Outside the United States

You are allowed an automatic 2-month extension, without filing Form 4868 (until June 15, 2018, if you use the calendar year), to file your 2017 return and pay any federal income tax due if:

You are a U.S. citizen or resident; and
On the due date of your return:
1. You are living outside the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico; or
2. You are in military or naval service on duty outside the United States and
  Puerto Rico.

However, if you pay the tax due after the regular due date (April 15 for most taxpayers), interest will be charged from that date until the date the tax is paid.

If you served in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. See Individuals Serving in Combat Zone , later, for special rules that apply to you.

Married taxpayers.

If you file a joint return, only one spouse has to qualify for this automatic extension. If you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies.

How to get the extension.

To use this automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. (See the situations listed under (2), earlier.)

Extensions beyond 2 months.

If you can’t file your return within the automatic 2-month extension period, you may be able to get an additional 4-month extension, for a total of 6 months. File Form 4868 and check the box on line 8.

No further extension.

An extension of more than 6 months will generally not be granted. However, if you are outside the United States and meet certain tests, you may be granted a longer extension. For more information, see When To File and Pay in Pub. 54.

Individuals Serving in Combat Zone

The deadline for filing your tax return, paying any tax you may owe, and filing a claim for refund is automatically extended if you serve in a combat zone. This applies to members of the Armed Forces, as well as merchant marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilians under the direction of the Armed Forces in support of the Armed Forces.

Combat zone.

For purposes of the automatic extension, the term “combat zone” includes the following areas.

The Arabian peninsula area, effective January 17, 1991.
The Kosovo area, effective March 24, 1999.
The Afghanistan area, effective September 19, 2001.

See Pub. 3 for more detailed information on the locations comprising each combat zone. The publication also has information about other tax benefits available to military personnel serving in a combat zone.

Extension period.

The deadline for filing your return, paying any tax due, and filing a claim for refund is extended for at least 180 days after the later of:

The last day you are in a combat zone or the last day the area qualifies as a combat zone, or
The last day of any continuous qualified hospitalization for injury from service in the combat zone.

In addition to the 180 days, your deadline is also extended by the number of days you had left to take action with the IRS when you entered the combat zone. For example, you have 3½ months (January 1 – April 15) to file your tax return. Any days left in this period when you entered the combat zone (or the entire 3½ months if you entered it before the beginning of the year) are added to the 180 days. See Extension of Deadlines in Pub. 3 for more information.

The rules on the extension for filing your return also apply when you are deployed outside the United States (away from your permanent duty station) while participating in a designated contingency operation.

How Do I Prepare My Return?

This section explains how to get ready to fill in your tax return and when to report your income and expenses. It also explains how to complete certain sections of the form. You may find Table 1-6 helpful when you prepare your paper return.

Table 1-6. Six Steps for Preparing Your Paper Return

1	—	Get your records together for income and expenses.
2	—	Get the forms, schedules, and publications you need.
3	—	Fill in your return.
4	—	Check your return to make sure it is correct.
5	—	Sign and date your return.
6	—	Attach all required forms and schedules.

Electronic returns.

For information you may find useful in preparing an electronic return, see Why Should I File Electronically , earlier.

Substitute tax forms.

You can’t use your own version of a tax form unless it meets the requirements explained in Pub. 1167.

Form W-2.

If you were an employee, you should receive Form W-2 from your employer. You will need the information from this form to prepare your return. See Form W-2 under Credit for Withholding and Estimated Tax in chapter 4.

Your employer is required to provide or send Form W-2 to you no later than January 31, 2018. If it is mailed, you should allow adequate time to receive it before contacting your employer. If you still don’t get the form by February 15, the IRS can help you by requesting the form from your employer. When you request IRS help, be prepared to provide the following information.

Your name, address (including ZIP code), and phone number.
Your SSN.
Your dates of employment.
Your employer’s name, address (including ZIP code), and phone number.

Form 1099.

If you received certain types of income, you may receive a Form 1099. For example, if you received taxable interest of $10 or more, the payer is required to provide or send Form 1099 to you no later than January 31, 2018 (or by February 15, 2018, if furnished by a broker). If it is mailed, you should allow adequate time to receive it before contacting the payer. If you still don’t get the form by February 15 (or by March 1, 2018, if furnished by a broker), call the IRS for help.

When Do I Report My Income and Expenses?

You must figure your taxable income on the basis of a tax year. A “tax year” is an annual accounting period used for keeping records and reporting income and expenses. You must account for your income and expenses in a way that clearly shows your taxable income. The way you do this is called an accounting method. This section explains which accounting periods and methods you can use.

Accounting Periods

Most individual tax returns cover a calendar year—the 12 months from January 1 through December 31. If you don’t use a calendar year, your accounting period is a fiscal year. A regular fiscal year is a 12-month period that ends on the last day of any month except December. A 52-53-week fiscal year varies from 52 to 53 weeks and always ends on the same day of the week.

You choose your accounting period (tax year) when you file your first income tax return. It can’t be longer than 12 months.

More information.

For more information on accounting periods, including how to change your accounting period, see Pub. 538.

Accounting Methods

Your accounting method is the way you account for your income and expenses. Most taxpayers use either the cash method or an accrual method. You choose a method when you file your first income tax return. If you want to change your accounting method after that, you generally must get IRS approval. Use Form 3115 to request an accounting method change.

Cash method.

If you use this method, report all items of income in the year in which you actually or constructively receive them. Generally, you deduct all expenses in the year you actually pay them. This is the method most individual taxpayers use.

Constructive receipt.

Generally, you constructively receive income when it is credited to your account or set apart in any way that makes it available to you. You don’t need to have physical possession of it. For example, interest credited to your bank account on December 31, 2017, is taxable income to you in 2017 if you could have withdrawn it in 2017 (even if the amount isn’t entered in your records or withdrawn until 2018).

Garnisheed wages.

If your employer uses your wages to pay your debts, or if your wages are attached or garnisheed, the full amount is constructively received by you. You must include these wages in income for the year you would have received them.

Debts paid for you.

If another person cancels or pays your debts (but not as a gift or loan), you have constructively received the amount and generally must include it in your gross income for the year. See Canceled Debts in chapter 12 for more information.

Payment to third party.

If a third party is paid income from property you own, you have constructively received the income. It is the same as if you had actually received the income and paid it to the third party.

Payment to an agent.

Income an agent receives for you is income you constructively received in the year the agent receives it. If you indicate in a contract that your income is to be paid to another person, you must include the amount in your gross income when the other person receives it.

Check received or available.

A valid check that was made available to you before the end of the tax year is constructively received by you in that year. A check that was “made available to you” includes a check you have already received, but not cashed or deposited. It also includes, for example, your last paycheck of the year that your employer made available for you to pick up at the office before the end of the year. It is constructively received by you in that year whether or not you pick it up before the end of the year or wait to receive it by mail after the end of the year.

No constructive receipt.

There may be facts to show that you didn’t constructively receive income.

Example.

Alice Johnson, a teacher, agreed to her school board’s condition that, in her absence, she would receive only the difference between her regular salary and the salary of a substitute teacher hired by the school board. Therefore, Alice didn’t constructively receive the amount by which her salary was reduced to pay the substitute teacher.

Accrual method.

If you use an accrual method, you generally report income when you earn it, rather than when you receive it. You generally deduct your expenses when you incur them, rather than when you pay them.

Income paid in advance.

An advance payment of income is generally included in gross income in the year you receive it. Your method of accounting doesn’t matter as long as the income is available to you. An advance payment may include rent or interest you receive in advance and pay for services you will perform later.

A limited deferral until the next tax year may be allowed for certain advance payments. See Pub. 538 for specific information.

Additional information.

For more information on accounting methods, including how to change your accounting method, see Pub. 538.

Social Security Number (SSN)

You must enter your SSN on your return. If you are married, enter the SSNs for both you and your spouse, whether you file jointly or separately.

If you are filing a joint return, include the SSNs in the same order as the names. Use this same order in submitting other forms and documents to the IRS.

Check that both the name and SSN on your Form 1040, W-2, and 1099 agree with your social security card. If they don’t, certain deductions and credits on your Form 1040 may be reduced or disallowed and you may not receive credit for your social security earnings. If your Form W-2 shows an incorrect SSN or name, notify your employer or the form-issuing agent as soon as possible to make sure your earnings are credited to your social security record. If the name or SSN on your social security card is incorrect, call the SSA at 1-800-772-1213.

Name change.

If you changed your name because of marriage, divorce, etc., be sure to report the change to your local Social Security Administration (SSA) office before filing your return. This prevents delays in processing your return and issuing refunds. It also safeguards your future social security benefits.

Dependent’s SSN.

You must provide the SSN of each dependent you claim, regardless of the dependent’s age. This requirement applies to all dependents (not just your children) claimed on your tax return.

Exception.

If your child was born and died in 2017 and didn’t have an SSN, enter “DIED” in column (2) of line 6c (Form 1040 or 1040A) and include a copy of the child’s birth certificate, death certificate, or hospital records. The document must show that the child was born alive.

No SSN.

File Form SS-5, Application for a Social Security Card, with your local SSA office to get an SSN for yourself or your dependent. It usually takes about 2 weeks to get an SSN. If you or your dependent isn’t eligible for an SSN, see Individual taxpayer identification number (ITIN) , later.

If you are a U.S. citizen or resident alien, you must show proof of age, identity, and citizenship or alien status with your Form SS-5. If you are 12 or older and have never been assigned an SSN, you must appear in person with this proof at an SSA office.

Form SS-5 is available at any SSA office, on the Internet at SSA.gov, or by calling 1-800-772-1213. If you have any questions about which documents you can use as proof of age, identity, or citizenship, contact your SSA office.

If your dependent doesn’t have an SSN by the time your return is due, you may want to ask for an extension of time to file, as explained earlier under When Do I Have To File .

If you don’t provide a required SSN or if you provide an incorrect SSN, your tax may be increased and any refund may be reduced.

Adoption taxpayer identification number (ATIN).

If you are in the process of adopting a child who is a U.S. citizen or resident and can’t get an SSN for the child until the adoption is final, you can apply for an ATIN to use instead of an SSN.

File Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, with the IRS to get an ATIN if all of the following are true.

You have a child living with you who was placed in your home for legal adoption.
You can’t get the child’s existing SSN even though you have made a reasonable attempt to get it from the birth parents, the placement agency, and other persons.
You can’t get an SSN for the child from the SSA because, for example, the adoption isn’t final.
You are eligible to claim the child as a dependent on your tax return.

After the adoption is final, you must apply for an SSN for the child. You can’t continue using the ATIN.

See Form W-7A for more information.

Nonresident alien spouse.

If your spouse is a nonresident alien, your spouse must have either an SSN or an ITIN if:

You file a joint return,
You file a separate return and claim an exemption for your spouse, or
Your spouse is filing a separate return.

If your spouse isn’t eligible for an SSN, see the following discussion on ITINs.

Individual taxpayer identification number (ITIN).

The IRS will issue you an ITIN if you are a nonresident or resident alien and you don’t have and aren’t eligible to get an SSN. This also applies to an alien spouse or dependent. To apply for an ITIN, file Form W-7 with the IRS. It usually takes about 7 weeks to get an ITIN. Enter the ITIN on your tax return wherever an SSN is requested.

Make sure your ITIN hasn’t expired. If you haven’t used your ITIN on a U.S. tax return at least once for tax years 2014, 2015 or 2016, or if your ITIN has the middle digits 70, 71, 72, or 80 (9NN-70-NNNN), it will expire at the end of 2017 and must be renewed if you need to file a U.S. federal tax return in 2018. You don’t need to renew your ITIN if you don’t need to file a federal tax return. You can find more information at IRS.gov/ITIN.

If you are applying for an ITIN for yourself, your spouse, or a dependent in order to file your tax return, attach your completed tax return to your Form W-7. See the Form W-7 instructions for how and where to file.

You can’t e-file a return using an ITIN in the calendar year the ITIN is issued; however, you can e-file returns in the following years.

ITIN for tax use only.

An ITIN is for federal tax use only. It doesn’t entitle you to social security benefits or change your employment or immigration status under U.S. law.

Penalty for not providing social security number.

If you don’t include your SSN or the SSN of your spouse or dependent as required, you may have to pay a penalty. See the discussion on Penalties , later, for more information.

SSN on correspondence.

If you write to the IRS about your tax account, be sure to include your SSN (and the name and SSN of your spouse, if you filed a joint return) in your correspondence. Because your SSN is used to identify your account, this helps the IRS respond to your correspondence promptly.

Presidential Election Campaign Fund

This fund helps pay for Presidential election campaigns. The fund also helps pay for pediatric medical research. If you want $3 to go to this fund, check the box. If you are filing a joint return, your spouse can also have $3 go to the fund. If you check a box, your tax or refund won’t change.

Computations

The following information may be useful in making the return easier to complete.

Rounding off dollars.

You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.

If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.

Equal amounts.

If you are asked to enter the smaller or larger of two equal amounts, enter that amount.

Negative amounts.

If you file a paper return and you need to enter a negative amount, put the amount in parentheses rather than using a minus sign. To combine positive and negative amounts, add all the positive amounts together and then subtract the negative amounts.

Attachments

Depending on the form you file and the items reported on your return, you may have to complete additional schedules and forms and attach them to your paper return.

You may be able to file a paperless return using IRS e-file. There’s nothing to attach or mail, not even your Forms W-2. See Why Should I File Electronically, earlier.

Form W-2.

Form W-2 is a statement from your employer of wages and other compensation paid to you and taxes withheld from your pay. You should have a Form W-2 from each employer. If you file a paper return, be sure to attach a copy of Form W-2 in the place indicated on the front page of your return. Attach it to the front page of your paper return, not to any attachments. For more information, see Form W-2 in chapter 4.

Form 1099-R.

If you received a Form 1099-R showing federal income tax withheld, and you file a paper return, attach a copy of that form in the place indicated on the front page of your return.

Form 1040EZ.

There are no additional schedules to file with Form 1040EZ.

Form 1040A.

If you file a paper return, attach any forms and schedules behind Form 1040A in order of the “Attachment Sequence Number” shown in the upper right corner of the form or schedule. Then arrange all other statements or attachments in the same order as the forms and schedules they relate to and attach them last. Don’t attach items unless required to do so.

Form 1040.

If you file a paper return, attach any forms and schedules behind Form 1040 in order of the “Attachment Sequence Number” shown in the upper right corner of the form or schedule. Then arrange all other statements or attachments in the same order as the forms and schedules they relate to and attach them last. Don’t attach items unless required to do so.

Third Party Designee

You can authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. If you check the “Yes” box in the Third party designee area of your 2017 tax return and provide the information required, you are authorizing:

The IRS to call the designee to answer any questions that arise during the processing of your return, and
The designee to:
1. Give information that is missing from your return to the IRS;
2. Call the IRS for information about the processing of your return or the status of your refund or payments;
3. Receive copies of notices or transcripts related to your return, upon request; and
4. Respond to certain IRS notices about math errors, offsets (see Refunds, later), and return preparation.

The authorization will automatically end no later than the due date (without any extensions) for filing your 2018 tax return. This is April 15, 2019, for most people.

See your form instructions for more information.

Signatures

You must sign and date your return. If you file a joint return, both you and your spouse must sign the return, even if only one of you had income.

If you file a joint return, both spouses are generally liable for the tax, and the entire tax liability may be assessed against either spouse. See chapter 2.

If you electronically file your return, you can use an electronic signature to sign your return. See Why Should I File Electronically, earlier.

If you are due a refund, it can’t be issued unless you have signed your return.

Enter your occupation. If you file a joint return, enter both your occupation and your spouse’s occupation. Entering your daytime phone number may help speed the processing of your return.

When someone can sign for you.

You can appoint an agent to sign your return if you are:

Unable to sign the return because of disease or injury,
Absent from the United States for a continuous period of at least 60 days before the due date for filing your return, or
Given permission to do so by the IRS office in your area.

Power of attorney.

A return signed by an agent in any of these cases must have a power of attorney (POA) attached that authorizes the agent to sign for you. You can use a POA that states that the agent is granted authority to sign the return, or you can use Form 2848. Part I of Form 2848 must state that the agent is granted authority to sign the return.

Court-appointed, conservator, or other fiduciary.

If you are a court-appointed conservator, guardian, or other fiduciary for a mentally or physically incompetent individual who has to file a tax return, sign your name for the individual. File Form 56.

Unable to sign.

If the taxpayer is mentally competent but physically unable to sign the return or POA, a valid “signature” is defined under state law. It can be anything that clearly indicates the taxpayer’s intent to sign. For example, the taxpayer’s “X” with the signatures of two witnesses might be considered a valid signature under a state’s law.

Spouse unable to sign.

If your spouse is unable to sign for any reason, see Signing a joint return in chapter 2.

Child’s return.

If a child has to file a tax return but can’t sign the return, the child’s parent, guardian, or another legally responsible person must sign the child’s name, followed by the words “By (your signature), parent for minor child.”

Paid Preparer

Generally, anyone you pay to prepare, assist in preparing, or review your tax return must sign it and fill in the other blanks, including their Preparer Tax Identification Number (PTIN), in the paid preparer’s area of your return.

Many preparers are required to e-file the tax returns they prepare. They sign these e-filed returns using their tax preparation software. However, you can choose to have your return completed on paper if you prefer. In that case, the paid preparer can sign the paper return manually or use a rubber stamp or mechanical device. The preparer is personally responsible for affixing his or her signature to the return.

If the preparer is self-employed (that is, not employed by any person or business to prepare the return), he or she should check the self-employed box in the Paid Preparer Use Only space on the return.

The preparer must give you a copy of your return in addition to the copy filed with the IRS.

If you prepare your own return, leave this area blank. If another person prepares your return and doesn’t charge you, that person shouldn’t sign your return.

If you have questions about whether a preparer must sign your return, contact any IRS office.

Refunds

When you complete your return, you will determine if you paid more income tax than you owed. If so, you can get a refund of the amount you overpaid or, if you file Form 1040 or Form 1040A, you can choose to apply all or part of the overpayment to your next year’s (2018) estimated tax. You can’t have your overpayment applied to your 2018 estimated tax if you file Form 1040EZ.

If you choose to have a 2017 overpayment applied to your 2018 estimated tax, you can’t change your mind and have any of it refunded to you after the due date (without extensions) of your 2017 return.

Follow the form instructions to complete the entries to claim your refund and/or to apply your overpayment to your 2018 estimated tax.

If your refund for 2017 is large, you may want to decrease the amount of income tax withheld from your pay in 2018. See chapter 4 for more information.

Instead of getting a paper check, you may be able to have your refund deposited directly into your checking or savings account, including an individual retirement arrangement. Follow the form instructions to request direct deposit. If the direct deposit can’t be done, the IRS will send a check instead.

Don’t request a deposit of any part of your refund to an account that isn’t in your name. Don’t allow your tax preparer to deposit any part of your refund into his or her account. The number of direct deposits to a single account or prepaid debit card is limited to three refunds a year. After this limit is exceeded, paper checks will be sent instead. Learn more at IRS.gov/Individuals/Direct-Deposit-Limits.

IRA.

You can have your refund (or part of it) directly deposited to a traditional IRA, Roth IRA, or SEP-IRA, but not a SIMPLE IRA. You must establish the IRA at a bank or financial institution before you request direct deposit.

TreasuryDirect®.

You can request a deposit of your refund to a TreasuryDirect® online account to buy U.S. Treasury marketable securities and savings bonds. For more information, go to www.treasurydirect.gov.

Split refunds.

If you choose direct deposit, you may be able to split the refund and have it deposited among two or three accounts or buy up to $5,000 in paper series I savings bonds. Complete Form 8888 and attach it to your return.

Overpayment less than one dollar.

If your overpayment is less than one dollar, you won’t get a refund unless you ask for it in writing.

Cashing your refund check.

Cash your tax refund check soon after you receive it. Checks expire the last business day of the 12th month of issue.

If your check has expired, you can apply to the IRS to have it reissued.

Refund more or less than expected.

If you receive a check for a refund you aren’t entitled to, or for an overpayment that should have been credited to estimated tax, don’t cash the check. Call the IRS.

If you receive a check for more than the refund you claimed, don’t cash the check until you receive a notice explaining the difference.

If your refund check is for less than you claimed, it should be accompanied by a notice explaining the difference. Cashing the check doesn’t stop you from claiming an additional amount of refund.

If you didn’t receive a notice and you have any questions about the amount of your refund, you should wait 2 weeks. If you still haven’t received a notice, call the IRS.

Offset against debts.

If you are due a refund but haven’t paid certain amounts you owe, all or part of your refund may be used to pay all or part of the past-due amount. This includes past-due federal income tax, other federal debts (such as student loans), state income tax, child and spousal support payments, and state unemployment compensation debt. You will be notified if the refund you claimed has been offset against your debts.

Joint return and injured spouse.

When a joint return is filed and only one spouse owes a past-due amount, the other spouse can be considered an injured spouse. An injured spouse should file Form 8379, Injured Spouse Allocation, if both of the following apply and the spouse wants a refund of his or her share of the overpayment shown on the joint return.

You aren’t legally obligated to pay the past-due amount.
You made and reported tax payments (such as federal income tax withheld from your wages or estimated tax payments), or claimed a refundable tax credit (see the credits listed under Who Should File, earlier).

Note.

If the injured spouse’s residence was in a community property state at any time during the tax year, special rules may apply. See the Instructions for Form 8379.

If you haven’t filed your joint return and you know that your joint refund will be offset, file Form 8379 with your return. You should receive your refund within 14 weeks from the date the paper return is filed or within 11 weeks from the date the return is filed electronically.

If you filed your joint return and your joint refund was offset, file Form 8379 by itself. When filed after offset, it can take up to 8 weeks to receive your refund. Don’t attach the previously filed tax return, but do include copies of all Forms W-2 and W-2G for both spouses and any Forms 1099 that show income tax withheld. The processing of Form 8379 may be delayed if these forms aren’t attached, or if the form is incomplete when filed.

A separate Form 8379 must be filed for each tax year to be considered.

An injured spouse claim is different from an innocent spouse relief request. An injured spouse uses Form 8379 to request the division of the tax overpayment attributed to each spouse. An innocent spouse uses Form 8857, Request for Innocent Spouse Relief, to request relief from joint liability for tax, interest, and penalties on a joint return for items of the other spouse (or former spouse) that were incorrectly reported on the joint return. For information on innocent spouses, see Relief from joint responsibility under Filing a Joint Return in chapter 2.

Amount You Owe

When you complete your return, you will determine if you have paid the full amount of tax that you owe. If you owe additional tax, you should pay it with your return.

You don’t have to pay if the amount you owe is under $1.

If the IRS figures your tax for you, you will receive a bill for any tax that is due. You should pay this bill within 30 days (or by the due date of your return, if later). See Tax Figured by IRS in chapter 30.

If you don’t pay your tax when due, you may have to pay a failure-to-pay penalty. See Penalties, later. For more information about your balance due, see Pub. 594.

If the amount you owe for 2017 is large, you may want to increase the amount of income tax withheld from your pay or make estimated tax payments for 2018. See chapter 4 for more information.

How To Pay

You can pay online, by phone, by mobile device, in cash, or by check or money order. Don’t include any estimated tax payment for 2018 in this payment. Instead, make the estimated tax payment separately.

Bad check or payment.

The penalty for writing a bad check to the IRS is $25 or 2% of the check, whichever is more. This penalty also applies to other forms of payment if the IRS doesn’t receive the funds.

Pay online.

Paying online is convenient and secure and helps make sure we get your payments on time.

You can pay online with a direct transfer from your bank account using IRS Direct Pay or the Electronic Federal Tax Payment System, or by debit or credit card.

To pay your taxes online or for more information, go to IRS.gov/Payments.

Pay by phone.

Paying by phone is another safe and secure method of paying electronically. Use one of the following methods.

Electronic Federal Tax Payment System (EFTPS).
Debit or credit card.

To use EFTPS, you must be enrolled either online or have an enrollment form mailed to you. To make a payment using EFTPS call 1-800-555-4477 (English) or 1-800-244-4829 (Español). People who are deaf, hard of hearing, or have a speech disability and have access to TTY/TDD equipment can call 1-800-733-4829. For more information about EFTPS, go to IRS.gov/Payments or www.EFTPS.gov.

To pay using a debit or credit card, you can call one of the following service providers. There is a convenience fee charged by these providers that varies by provider, card type, and payment amount.

WorldPay US, Inc.
1-844-PAY-TAX-8^TM (1-844-729-8298)
www.payUSAtax.com

Official Payments
1-888-UPAY-TAX^TM (1-888-872-9829)
www.officialpayments.com

Link2Gov Corporation
1-888-PAY-1040^TM (1-888-729-1040)
www.PAY1040.com

For the latest details on how to pay by phone, go to IRS.gov/Payments.

Pay by mobile device.

To pay through your mobile device, download the IRS2Go app.

Pay by cash.

Cash is an in-person payment option for individuals provided through retail partners with a maximum of $1,000 per day per transaction. To make a cash payment, you must first be registered online atwww.officialpayments.com.

Pay by check or money order.

Make your check or money order payable to “United States Treasury” for the full amount due. Don’t send cash. Don’t attach the payment to your return. Show your correct name, address, SSN, daytime phone number, and the tax year and form number on the front of your check or money order. If you are filing a joint return, enter the SSN shown first on your tax return.

Estimated tax payments.

Don’t include any 2018 estimated tax payment in the payment for your 2017 income tax return. See chapter 4 for information on how to pay estimated tax.

Interest

Interest is charged on tax you don’t pay by the due date of your return. Interest is charged even if you get an extension of time for filing.

If the IRS figures your tax for you, to avoid interest for late payment, you must pay the bill within 30 days of the date of the bill or by the due date of your return, whichever is later. For information, see Tax Figured by IRS in chapter 30.

Interest on penalties.

Interest is charged on the failure-to-file penalty, the accuracy-related penalty, and the fraud penalty from the due date of the return (including extensions) to the date of payment. Interest on other penalties starts on the date of notice and demand, but isn’t charged on penalties paid within 21 calendar days from the date of the notice (or within 10 business days if the notice is for $100,000 or more).

Interest due to IRS error or delay.

All or part of any interest you were charged can be forgiven if the interest is due to an unreasonable error or delay by an officer or employee of the IRS in performing a ministerial or managerial act.

A ministerial act is a procedural or mechanical act that occurs during the processing of your case. A managerial act includes personnel transfers and extended personnel training. A decision concerning the proper application of federal tax law isn’t a ministerial or managerial act.

The interest can be forgiven only if you aren’t responsible in any important way for the error or delay and the IRS has notified you in writing of the deficiency or payment. For more information, see Pub. 556.

Interest and certain penalties may also be suspended for a limited period if you filed your return by the due date (including extensions) and the IRS doesn’t provide you with a notice specifically stating your liability and the basis for it before the close of the 36-month period beginning on the later of:

The date the return is filed, or
The due date of the return without regard to extensions.

For more information, see Pub. 556.

Installment Agreement

If you can’t pay the full amount due with your return, you can ask to make monthly installment payments for the full or a partial amount. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by the date your return is due, even if your request to pay in installments is granted. If your request is granted, you must also pay a fee. To limit the interest and penalty charges, pay as much of the tax as possible with your return. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan or credit card payment.

To apply for an installment agreement online, go to IRS.gov/OPA. You can also use Form 9465.

In addition to paying by check or money order, you can use a credit or debit card or direct payment from your bank account to make installment agreement payments. See How To Pay , earlier.

Gift To Reduce Debt Held by the Public

You can make a contribution (gift) to reduce debt held by the public. If you wish to do so, make a separate check payable to “Bureau of the Fiscal Service.”

Send your check to:

Bureau of the Fiscal Service
ATTN: Department G
P.O. Box 2188
Parkersburg, WV 26106-2188

Or, enclose your separate check in the envelope with your income tax return. Don’t add this gift to any tax you owe.

For information on making this type of gift online, go to www.treasurydirect.gov and click on “How To Make a Contribution to Reduce the Debt.”

You may be able to deduct this gift as a charitable contribution on next year’s tax return if you itemize your deductions on Schedule A (Form 1040).

Name and Address

After you have completed your return, fill in your name and address in the appropriate area of Form 1040, Form 1040A, or Form 1040EZ.

You must include your SSN in the correct place on your tax return.

P.O. box.

If your post office doesn’t deliver mail to your street address and you have a P.O. box, enter your P.O. box number on the line for your present home address instead of your street address.

Foreign address.

If your address is outside the United States or its possessions or territories, enter the city name on the appropriate line of your return. Don’t enter any other information on that line, but also complete the line listing:

Foreign country name,
Foreign province/state/county, and
Foreign postal code.

Follow the country’s practice for entering the postal code and the name of the province, county, or state.

Where Do I File?

After you complete your return, you must send it to the IRS. You can mail it or you may be able to file it electronically. See Why Should I File Electronically , earlier.

Mailing your paper return.

Mail your paper return to the address shown in your tax return instructions.

What Happens After I File?

After you send your return to the IRS, you may have some questions. This section discusses concerns you may have about recordkeeping, your refund, and what to do if you move.

What Records Should I Keep?

This part discusses why you should keep records, what kinds of records you should keep, and how long you should keep them.

You must keep records so that you can prepare a complete and accurate income tax return. The law doesn’t require any special form of records. However, you should keep all receipts, canceled checks or other proof of payment, and any other records to support any deductions or credits you claim.

If you file a claim for refund, you must be able to prove by your records that you have overpaid your tax.

This part doesn’t discuss the records you should keep when operating a business. For information on business records, see Pub. 583, Starting a Business and Keeping Records.

Why Keep Records?

Good records help you:

Identify sources of income.Your records can identify the sources of your income to help you separate business from nonbusiness income and taxable from nontaxable income.
Keep track of expenses.You can use your records to identify expenses for which you can claim a deduction. This helps you determine if you can itemize deductions on your tax return.
Keep track of the basis of property. You need to keep records that show the basis of your property. This includes the original cost or other basis of the property and any improvements you made.
Prepare tax returns. You need records to prepare your tax return.
Support items reported on tax returns. The IRS may question an item on your return. Your records will help you explain any item and arrive at the correct tax. If you can’t produce the correct documents, you may have to pay additional tax and be subject to penalties.

Kinds of Records To Keep

The IRS doesn’t require you to keep your records in a particular way. Keep them in a manner that allows you and the IRS to determine your correct tax.

You can use your checkbook to keep a record of your income and expenses. You also need to keep documents, such as receipts and sales slips, that can help prove a deduction.

In this section you will find guidance about basic records that everyone should keep. The section also provides guidance about specific records you should keep for certain items.

Electronic records.

All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law.

For details on electronic storage system requirements, see Revenue Procedure 97-22, which is on page 9 of Internal Revenue Bulletin 1997-13 at IRS.gov/pub/irs-irbs/irb97-13.pdf.

Copies of tax returns.

You should keep copies of your tax returns as part of your tax records. They can help you prepare future tax returns, and you will need them if you file an amended return or are audited. Copies of your returns and other records can be helpful to your survivor or the executor or administrator of your estate.

If necessary, you can request a copy of a return and all attachments (including Form W-2) from the IRS by using Form 4506. There is a charge for a copy of a return. For information on the cost and where to file, see the Instructions for Form 4506.

If you just need information from your return, you can order a transcript in one of the following ways.

Go to IRS.gov/Transcript.
Call 1-800-908-9946.
Use Form 4506-T or Form 4506T-EZ.

There is no fee for a transcript. For more information, see Form 4506-T.

Basic Records

Basic records are documents that everybody should keep. These are the records that prove your income and expenses. If you own a home or investments, your basic records should contain documents related to those items.

Income.

Your basic records prove the amounts you report as income on your tax return. Your income may include wages, dividends, interest, and partnership or S corporation distributions. Your records also can prove that certain amounts aren’t taxable, such as tax-exempt interest.

Note.

If you receive a Form W-2, keep Copy C until you begin receiving social security benefits. This will help protect your benefits in case there is a question about your work record or earnings in a particular year.

Expenses.

Your basic records prove the expenses for which you claim a deduction (or credit) on your tax return. Your deductions may include alimony, charitable contributions, mortgage interest, and real estate taxes. You also may have child care expenses for which you can claim a credit.

Home.

Your basic records should enable you to determine the basis or adjusted basis of your home. You need this information to determine if you have a gain or loss when you sell your home or to figure depreciation if you use part of your home for business purposes or for rent. Your records should show the purchase price, settlement or closing costs, and the cost of any improvements. They also may show any casualty losses deducted and insurance reimbursements for casualty losses.

For detailed information on basis, including which settlement or closing costs are included in the basis of your home, see chapter 13.

When you sell your home, your records should show the sales price and any selling expenses, such as commissions. For information on selling your home, see chapter 15.

Investments.

Your basic records should enable you to determine your basis in an investment and whether you have a gain or loss when you sell it. Investments include stocks, bonds, and mutual funds. Your records should show the purchase price, sales price, and commissions. They may also show any reinvested dividends, stock splits and dividends, load charges, and original issue discount (OID).

For information on stocks, bonds, and mutual funds, see chapters 8, 13, 14, and 16.

Proof of Payment

One of your basic records is proof of payment. You should keep these records to support certain amounts shown on your tax return. Proof of payment alone isn’t proof that the item claimed on your return is allowable. You also should keep other documents that will help prove that the item is allowable.

Generally, you prove payment with a cash receipt, financial account statement, credit card statement, canceled check, or substitute check. If you make payments in cash, you should get a dated and signed receipt showing the amount and the reason for the payment.

If you make payments using your bank account, you may be able to prove payment with an account statement.

Account statements.

You may be able to prove payment with a legible financial account statement prepared by your bank or other financial institution.

Pay statements.

You may have deductible expenses withheld from your paycheck, such as union dues or medical insurance premiums. You should keep your year-end or final pay statements as proof of payment of these expenses.

How Long To Keep Records

You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support items shown on your return until the period of limitations for that return runs out.

The period of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax. Table 1-7 contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period beginning after the return was filed. Returns filed before the due date are treated as being filed on the due date.

Table 1-7. Period of Limitations

	IF you…	THEN the period is…
1	File a return and (2), (3), and (4) don’t apply to you	3 years
2	Don’t report income that you should and it is more than 25% of the gross income shown on your return	6 years
3	File a fraudulent return	No limit
4	Don’t file a return	No limit
5	File a claim for credit or refund after you filed your return	The later of 3 years or 2 years after tax was paid
6	File a claim for a loss from worthless securities or bad debt deduction	7 years

Property.

Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure your basis for computing gain or loss when you sell or otherwise dispose of the property.

Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up. You must keep the records on the old property, as well as the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.

Refund Information

You can go online to check the status of your 2017 refund 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail a paper return. If you filed Form 8379 with your return, allow 14 weeks (11 weeks if you filed electronically) before checking your refund status. Be sure to have a copy of your 2017 tax return handy because you will need to know the filing status, the first SSN shown on the return, and the exact whole-dollar amount of the refund. To check on your refund, do one of the following.

Go to IRS.gov/Refunds.
Download the free IRS2Go app to your smart phone and use it to check your refund status.
Call the automated refund hotline at 1-800-829-1954.

Interest on Refunds

If you are due a refund, you may get interest on it. The interest rates are adjusted quarterly.

If the refund is made within 45 days after the due date of your return, no interest will be paid. If you file your return after the due date (including extensions), no interest will be paid if the refund is made within 45 days after the date you filed. If the refund isn’t made within this 45-day period, interest will be paid from the due date of the return or from the date you filed, whichever is later.

Accepting a refund check doesn’t change your right to claim an additional refund and interest. File your claim within the period of time that applies. See Amended Returns and Claims for Refund , later. If you don’t accept a refund check, no more interest will be paid on the overpayment included in the check.

Interest on erroneous refund.

All or part of any interest you were charged on an erroneous refund generally will be forgiven. Any interest charged for the period before demand for repayment was made will be forgiven unless:

You, or a person related to you, caused the erroneous refund in any way; or
The refund is more than $50,000.

For example, if you claimed a refund of $100 on your return, but the IRS made an error and sent you $1,000, you wouldn’t be charged interest for the time you held the $900 difference. You must, however, repay the $900 when the IRS asks.

Change of Address

If you have moved, file your return using your new address.

If you move after you filed your return, you should give the IRS clear and concise notification of your change of address. The notification may be written, electronic, or oral. Send written notification to the Internal Revenue Service Center serving your old address. You can use Form 8822, Change of Address. If you are expecting a refund, also notify the post office serving your old address. This will help in forwarding your check to your new address (unless you chose direct deposit of your refund). For more information, see Revenue Procedure 2010-16, 2010-19 I.R.B. 664, available at IRS.gov/irb/2010-19_IRB/ar07.html.

Be sure to include your SSN (and the name and SSN of your spouse if you filed a joint return) in any correspondence with the IRS.

What If I Made a Mistake?

Errors may delay your refund or result in notices being sent to you. If you discover an error, you can file an amended return or claim for refund.

Amended Returns and Claims for Refund

You should correct your return if, after you have filed it, you find that:

You didn’t report some income,
You claimed deductions or credits you shouldn’t have claimed,
You didn’t claim deductions or credits you could have claimed, or
You should have claimed a different filing status. (Once you file a joint return, you can’t choose to file separate returns for that year after the due date of the return. However, an executor may be able to make this change for a deceased spouse.)

If you need a copy of your return, see Copies of tax returns under Kinds of Records To Keep, earlier, in this chapter.

Form 1040X.

Use Form 1040X to correct a return you have already filed. An amended tax return can’t be filed electronically.

Completing Form 1040X.

On Form 1040X, enter your income, deductions, and credits as you originally reported them on your return; the changes you are making; and the corrected amounts. Then figure the tax on the corrected amount of taxable income and the amount you owe or your refund.

If you owe tax, pay the full amount with Form 1040X. The tax owed won’t be subtracted from any amount you had credited to your estimated tax.

If you can’t pay the full amount due with your return, you can ask to make monthly installment payments. See Installment Agreement , earlier.

If you overpaid tax, you can have all or part of the overpayment refunded to you, or you can apply all or part of it to your estimated tax. If you choose to get a refund, it will be sent separately from any refund shown on your original return.

Filing Form 1040X.

When completing Form 1040X, don’t forget to show the year of your original return and explain all changes you made. Be sure to attach any forms or schedules needed to explain your changes. Mail your Form 1040X to the Internal Revenue Service Center serving the area where you now live (as shown in the instructions to the form). However, if you are filing Form 1040X in response to a notice you received from the IRS, mail it to the address shown on the notice.

File a separate form for each tax year involved.

Time for filing a claim for refund.

Generally, you must file your claim for a credit or refund within 3 years after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date (even if the due date was a Saturday, Sunday, or legal holiday). These time periods are suspended while you are financially disabled, discussed later.

If the last day for claiming a credit or refund is a Saturday, Sunday, or legal holiday, you can file the claim on the next business day.

If you don’t file a claim within this period, you may not be entitled to a credit or a refund.

Protective claim for refund.

Generally, a protective claim is a formal claim or amended return for credit or refund normally based on current litigation or expected changes in tax law or other legislation. You file a protective claim when your right to a refund is contingent on future events and may not be determinable until after the statute of limitations expires. A valid protective claim doesn’t have to list a particular dollar amount or demand an immediate refund. However, a valid protective claim must:

Be in writing and signed;
Include your name, address, SSN or ITIN, and other contact information;
Identify and describe the contingencies affecting the claim;
Clearly alert the IRS to the essential nature of the claim; and
Identify the specific year(s) for which a refund is sought.

Mail your protective claim for refund to the address listed in the instructions for Form 1040X under Where To File.

Generally, the IRS will delay action on the protective claim until the contingency is resolved.

Limit on amount of refund.

If you file your claim within 3 years after the date you filed your return, the credit or refund can’t be more than the part of the tax paid within the 3-year period (plus any extension of time for filing your return) immediately before you filed the claim. This time period is suspended while you are financially disabled, discussed later.

Tax paid.

Payments, including estimated tax payments, made before the due date (without regard to extensions) of the original return are considered paid on the due date. For example, income tax withheld during the year is considered paid on the due date of the return, April 15 for most taxpayers.

Example 1.

You made estimated tax payments of $500 and got an automatic extension of time to October 15, 2014, to file your 2013 income tax return. When you filed your return on that date, you paid an additional $200 tax. On October 15, 2017, you filed an amended return and claimed a refund of $700. Because you filed your claim within 3 years after you filed your original return, you can get a refund of up to $700, the tax paid within the 3 years plus the 6-month extension period immediately before you filed the claim.

Example 2.

The situation is the same as in Example 1, except you filed your return on October 30, 2014, 2 weeks after the extension period ended. You paid an additional $200 on that date. On October 31, 2017, you filed an amended return and claimed a refund of $700. Although you filed your claim within 3 years from the date you filed your original return, the refund was limited to $200, the tax paid within the 3 years plus the 6-month extension period immediately before you filed the claim. The estimated tax of $500 paid before that period can’t be refunded or credited.

If you file a claim more than 3 years after you file your return, the credit or refund can’t be more than the tax you paid within the 2 years immediately before you file the claim.

Example.

You filed your 2013 tax return on April 15, 2014. You paid taxes of $500. On November 5, 2015, after an examination of your 2013 return, you had to pay an additional tax of $200. On May 12, 2017, you file a claim for a refund of $300. However, because you filed your claim more than 3 years after you filed your return, your refund will be limited to the $200 you paid during the 2 years immediately before you filed your claim.

Financially disabled.

The time periods for claiming a refund are suspended for the period in which you are financially disabled. For a joint income tax return, only one spouse has to be financially disabled for the time period to be suspended. You are financially disabled if you are unable to manage your financial affairs because of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. However, you aren’t treated as financially disabled during any period your spouse or any other person is authorized to act on your behalf in financial matters.

To claim that you are financially disabled, you must send in the following written statements with your claim for refund.

A statement from your qualified physician that includes:
1. The name and a description of your physical or mental impairment;
2. The physician’s medical opinion that the impairment prevented you from managing your financial affairs;
3. The physician’s medical opinion that the impairment was or can be expected to result in death, or that its duration has lasted, or can be expected to last, at least 12 months;
4. The specific time period (to the best of the physician’s knowledge); and
5. The following certification signed by the physician: “I hereby certify that, to the best of my knowledge and belief, the above representations are true, correct, and complete.”
A statement made by the person signing the claim for credit or refund that no person, including your spouse, was authorized to act on your behalf in financial matters during the period of disability (or the exact dates that a person was authorized to act for you).

Exceptions for special types of refunds.

If you file a claim for one of the items in the following list, the dates and limits discussed earlier may not apply. These items, and where to get more information, are as follows.

Bad debt. See Nonbusiness Bad Debtsin chapter 14.
Worthless security. See Worthless securitiesin chapter 14.
Foreign tax paid or accrued. See Pub. 514.
Net operating loss carryback. See Pub. 536.

Carryback of certain business tax credits. See Form 3800.
Claim based on an agreement with the IRS extending the period for assessment of tax.

Processing claims for refund.

Claims are usually processed 8–12 weeks after they are filed. Your claim may be accepted as filed, disallowed, or subject to examination. If a claim is examined, the procedures are the same as in the examination of a tax return.

If your claim is disallowed, you will receive an explanation of why it was disallowed.

Taking your claim to court.

You can sue for a refund in court, but you must first file a timely claim with the IRS. If the IRS disallows your claim or doesn’t act on your claim within 6 months after you file it, you can then take your claim to court. For information on the burden of proof in a court proceeding, see Pub. 556.

The IRS provides a direct method to move your claim to court if:

You are filing a claim for a credit or refund based solely on contested income tax or on estate tax or gift tax issues considered in your previously examined returns, and
You want to take your case to court instead of appealing it within the IRS.

When you file your claim with the IRS, you get the direct method by requesting in writing that your claim be immediately rejected. A notice of claim disallowance will be sent to you.

You have 2 years from the date of mailing of the notice of claim disallowance to file a refund suit in the United States District Court having jurisdiction or in the United States Court of Federal Claims.

Interest on refund.

If you receive a refund because of your amended return, interest will be paid on it from the due date of your original return or the date you filed your original return, whichever is later, to the date you filed the amended return. However, if the refund isn’t made within 45 days after you file the amended return, interest will be paid up to the date the refund is paid.

Reduced refund.

Your refund may be reduced by an additional tax liability that has been assessed against you.

Also, your refund may be reduced by amounts you owe for past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or certain other federal nontax debts, such as student loans. If your spouse owes these debts, see Offset against debts under Refunds, earlier, for the correct refund procedures to follow.

Effect on state tax liability.

If your return is changed for any reason, it may affect your state income tax liability. This includes changes made as a result of an examination of your return by the IRS. Contact your state tax agency for more information.

Penalties

The law provides penalties for failure to file returns or pay taxes as required.

Civil Penalties

If you don’t file your return and pay your tax by the due date, you may have to pay a penalty. You may also have to pay a penalty if you substantially understate your tax, understate a reportable transaction, file an erroneous claim for refund or credit, file a frivolous tax submission, or fail to supply your SSN or individual taxpayer identification number. If you provide fraudulent information on your return, you may have to pay a civil fraud penalty.

Filing late.

If you don’t file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. The penalty is based on the tax not paid by the due date (without regard to extensions).

Fraud.

If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%.

Return over 60 days late.

If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $210 or 100% of the unpaid tax.

Exception.

You won’t have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect.

Paying tax late.

You will have to pay a failure-to-pay penalty of ½ of 1% (0.50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax isn’t paid. This penalty doesn’t apply during the automatic 6-month extension of time to file period if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return.

The monthly rate of the failure-to-pay penalty is half the usual rate (0.25% instead of 0.50%) if an installment agreement is in effect for that month. You must have filed your return by the due date (including extensions) to qualify for this reduced penalty.

If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued.

This penalty can’t be more than 25% of your unpaid tax. You won’t have to pay the penalty if you can show that you had a good reason for not paying your tax on time.

Combined penalties.

If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $210 or 100% of the unpaid tax.

Accuracy-related penalty.

You may have to pay an accuracy-related penalty if you underpay your tax because:

You show negligence or disregard of the rules or regulations,
You substantially understate your income tax,
You claim tax benefits for a transaction that lacks economic substance, or
You fail to disclose a foreign financial asset.

The penalty is equal to 20% of the underpayment. The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. The penalty won’t be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged.

Negligence or disregard.

The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. Negligence also includes failure to keep adequate books and records. You won’t have to pay a negligence penalty if you have a reasonable basis for a position you took.

The term “disregard” includes any careless, reckless, or intentional disregard.

Adequate disclosure.

You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. See Disclosure statement , later.

This exception won’t apply to an item that is attributable to a tax shelter. In addition, it won’t apply if you fail to keep adequate books and records, or substantiate items properly.

Substantial understatement of income tax.

You understate your tax if the tax shown on your return is less than the correct tax. The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. However, the amount of the understatement may be reduced to the extent the understatement is due to:

Substantial authority, or
Adequate disclosure and a reasonable basis.

If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment.

Substantial authority.

Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. Some of the items that may be considered are court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours.

Disclosure statement.

To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275. You must also have a reasonable basis for treating the item the way you did.

In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2016-13 (or later update) are considered adequately disclosed on your return without filing Form 8275.

Use Form 8275-R to disclose items or positions contrary to regulations.

Transaction lacking economic substance.

For more information on economic substance, see section 7701(o).

Foreign financial asset.

For more information on undisclosed foreign financial assets, see section 6662(j).

Reasonable cause.

You won’t have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. You must also show that you acted in good faith. This doesn’t apply to a transaction that lacks economic substance.

Filing erroneous claim for refund or credit.

You may have to pay a penalty if you file an erroneous claim for refund or credit. The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. However, any disallowed amount due to a transaction that lacks economic substance won’t be treated as having a reasonable basis. The penalty won’t be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged.

Frivolous tax submission.

You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. A frivolous tax return is one that doesn’t include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 I.R.B. 609, available at IRS.gov/irb/2010-17_IRB/ar13.html.

You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. This includes altering or striking out the preprinted language above the space provided for your signature.

This penalty is added to any other penalty provided by law.

Fraud.

If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax.

Joint return.

The fraud penalty on a joint return doesn’t apply to a spouse unless some part of the underpayment is due to the fraud of that spouse.

Failure to supply SSN.

If you don’t include your SSN or the SSN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. You will also be subject to a penalty of $50 if you don’t give your SSN to another person when it is required on a return, statement, or other document.

For example, if you have a bank account that earns interest, you must give your SSN to the bank. The number must be shown on the Form 1099-INT or other statement the bank sends you. If you don’t give the bank your SSN, you will be subject to the $50 penalty. (You also may be subject to “backup” withholding of income tax. See chapter 4.)

You won’t have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect.

Criminal Penalties

You may be subject to criminal prosecution (brought to trial) for actions such as:

Tax evasion;
Willful failure to file a return, supply information, or pay any tax due;
Fraud and false statements;
Preparing and filing a fraudulent return; or
Identity theft.

Identity Theft

Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.

To reduce your risk:

Protect your SSN,
Ensure your employer is protecting your SSN, and
Be careful when choosing a tax preparer.

If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.

If your SSN has been lost or stolen or you suspect you are a victim of tax-related identity theft, visit IRS.gov/IdentityTheft to learn what steps you should take.

For more information, see Pub. 5027.

Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the National Taxpayer Advocate helpline at 1-877-777-4778 or TTY/TDD at 1-800-829-4059. Deaf or hard-of-hearing individuals can also contact the IRS through relay services such as the Federal Relay Service available at www.gsa.gov/fedrelay.

Protect yourself from suspicious emails or phishing schemes.

Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common form is the act of sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

The IRS doesn’t initiate contacts with taxpayers via emails. Also, the IRS doesn’t request detailed personal information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.

If you receive an unsolicited email claiming to be from the IRS, forward the message to phishing@irs.gov. You may also report misuse of the IRS name, logo, forms, or other IRS property to the Treasury Inspector General for Tax Administration toll-free at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission (FTC) at spam@uce.gov or report them at ftc.gov/complaint. You can contact them at www.ftc.gov/idtheft or 1-877-IDTHEFT (1-877-438-4338). If you have been a victim of identity theft, see www.IdentityTheft.gov or Pub.5027. People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-866-653-4261.

Go to IRS.gov/IDProtection to learn more about identity theft and how to reduce your risk.

2. Filing Status

What’s New

At the time this publication went to print, Congress was considering legislation that would do the following.

Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires.
Extend certain tax benefits that expired at the end of 2016 and that currently can’t be claimed on your 2017 return.
Change certain other tax provisions.

To find out whether this legislation was enacted resulting in changes that affect your 2017 tax return, go to Recent Developments at IRS.gov/Pub17.

Introduction

This chapter helps you determine which filing status to use. There are five filing statuses.

Married Filing Jointly.
Married Filing Separately.
Head of Household.
Qualifying Widow(er).

If more than one filing status applies to you, choose the one that will give you the lowest tax.

You must determine your filing status before you can determine whether you must file a tax return (chapter 1), your standard deduction (chapter 20), and your tax (chapter 30). You also use your filing status to determine whether you are eligible to claim certain deductions and credits.

Useful Items – You may want to see:

Publication

501Exemptions, Standard Deduction, and Filing Information
519S. Tax Guide for Aliens
555Community Property

Marital Status

In general, your filing status depends on whether you are considered unmarried or married.

Unmarried persons.

You are considered unmarried for the whole year if, on the last day of your tax year, you are either:

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 for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse must file as married individuals in both years.

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 Form 1040X, Amended U.S. Individual Income Tax Return, claiming single or head of household status for all tax years that are affected by the annulment and not closed by the statute of limitations for filing a tax return. Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. If you filed your original return early (for example, March 1), your return is considered filed on the due date (generally April 15). However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it on July 1, your return is considered filed on July 1.

Head of household or qualifying widow(er).

If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er). See Head of Household and Qualifying Widow(er) to see if you qualify.

Married persons.

If you are considered married, you and your spouse can file a joint return or 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.

You are married and living together.
You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began.
You are married and living apart, but not legally separated under a decree of divorce or separate maintenance.
You are separated under an interlocutory (not final) decree of divorce.

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 didn’t 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) .

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 able to file as head of household even if you aren’t divorced or legally separated. If you qualify to file as head of household instead of 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.

Single

Your filing status is single if you are considered unmarried and you don’t qualify for another filing status. To determine your marital status, see Marital Status , earlier.

Widow(er).

Your filing status may be single if you were widowed before January 1, 2017, and didn’t remarry before the end of 2017. You may, however, be able to use another filing status that will give you a lower tax. See Head of Household and Qualifying Widow(er) , later, to see if you qualify.

How to file.

You can file Form 1040. If you have taxable income of less than $100,000, you may be able to file Form 1040A. If, in addition, you have no dependents, are under 65 and not blind, and meet other requirements, you can file Form 1040EZ. 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.

Married Filing Jointly

You can choose married filing jointly as your filing status if you are considered married and both you and your spouse agree to file a joint return. On a joint return, you and your spouse 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 don’t itemize deductions) may be higher, and you may qualify for tax benefits that don’t 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. If you and your spouse have taxable income of less than $100,000, you may be able to file Form 1040A. If, in addition, you and your spouse have no dependents, are both 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 jointlycolumn of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax.

Spouse died.

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 Marital Status, earlier, for more information.

If your spouse died in 2018 before filing a 2017 return, you can choose married filing jointly as your filing status on your 2017 return.

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 can’t choose married filing jointly as your filing status.

Filing a Joint Return

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. See Accounting Periods and Accounting Methods in chapter 1.

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. This means that if one spouse doesn’t pay the tax due, the other may have to. Or, if one spouse doesn’t report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse.

You may want to file separately if:

You believe your spouse isn’t reporting all of his or her income, or
You don’t want to be responsible for any taxes due if your spouse doesn’t have enough tax withheld or doesn’t pay enough estimated tax.

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 responsibility for tax, interest, and penalties on a joint return for items of the other spouse that 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.

Innocent spouse relief.
Separation of liability (available only to joint filers who are divorced, widowed, legally separated, or haven’t lived together for the 12 months ending on the date the election for this relief is filed).
Equitable relief.

You must file Form 8857, Request for Innocent Spouse Relief, to request relief from joint responsibility. Pub. 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 spouses 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 can’t sign because of disease or injury and tells you to sign for him or her, 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, and the reason your spouse can’t sign, and should state 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.

You can sign a joint return for your spouse if your spouse can’t sign because he or she is serving in a combat zone (such as the Persian Gulf Area, Serbia, Montenegro, Albania, or Afghanistan), even if you don’t have a power of attorney or other statement. Attach a signed statement to your return explaining 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 Pub. 3, Armed Forces’ Tax Guide.

Other reasons spouse can’t sign.

If your spouse can’t 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, Power of Attorney and Declaration of Representative.

Nonresident alien or dual-status alien.

Generally, a married couple can’t file a joint return if either one 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 Pub. 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 don’t agree to file a joint return, you must use this filing status unless you qualify for head of household status, discussed later.

You may be able to choose head of household filing status if you are considered unmarried because you live apart from your spouse and meet certain tests (explained under Head of Household , later). This can apply to you even if you aren’t 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.

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. However, 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. When figuring the combined tax of a married couple, you may want to consider state taxes as well as federal taxes.

How to file.

If you file a separate return, you generally report only your own income, exemptions, credits, and deductions. You can claim an exemption for your spouse only if your spouse had no gross income, isn’t filing a return, and wasn’t the dependent of another person.

You can file Form 1040. If your taxable income is less than $100,000, you may be able to file Form 1040A. Select this filing status by checking the box on line 3 of either form. Enter your spouse’s full name and SSN or ITIN in the spaces provided. If your spouse doesn’t have and isn’t required to have an SSN or ITIN, enter “NRA” in the space for your spouse’s SSN. Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax.

Special Rules

If you choose married filing separately as your filing status, the following special rules apply. Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for.

Your tax rate generally is higher than on a joint return.
Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return.
You can’t take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer’s dependent care assistance program is limited to $2,500 (instead of $5,000). However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. For more information about these expenses, the credit, and the exclusion, see chapter 32.
You can’t take the earned income credit.
You can’t take the exclusion or credit for adoption expenses in most cases.
You can’t take the education credits (the American opportunity credit and lifetime learning credit), or the deduction for student loan interest.
You can’t exclude any interest income from qualified U.S. savings bonds you used for higher education expenses.
If you lived with your spouse at any time during the tax year:
1. You can’t claim the credit for the elderly or the disabled, and
2. You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received.
The following credits and deductions are reduced at income levels half of those for a joint return.
1. The child tax credit.
2. The retirement savings contributions credit.
3. The deduction for personal exemptions.
4. Itemized deductions.
Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return).
If your spouse itemizes deductions, you can’t claim the standard deduction. If you can claim the standard deduction, your basic standard deduction is half of the amount allowed on a joint return.

At the time this publication was prepared for print, the tuition and fees deduction had expired. Even if it is extended, you can’t take it if your filing status is married filing separately. To see if it was extended, go to Recent Developments at IRS.gov/Pub17.

Adjusted gross income (AGI) limits.

If your AGI on a separate return is lower than it would have been on a joint return, you may be able to deduct a larger amount for certain deductions that are limited by AGI, such as medical expenses.

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 were 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 17.

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 can’t 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 Limits on Rental Losses in chapter 9.

Community property states.

If you live in a community property state and file separately, your income may be considered separate income or community income for income tax purposes. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. See Pub. 555.

Joint Return After Separate Returns

You can change your filing status from a separate return to a joint return by filing an amended return using Form 1040X.

You generally can change to a joint return any time within 3 years from the due date of the separate return or returns. This doesn’t 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 can’t 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 of the return (including extensions) to make the change. See Pub. 559, Survivors, Executors, and Administrators, for more information on filing a return for a decedent.

Head of Household

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. See Marital Status , earlier, andConsidered Unmarried , later.
You paid more than half of 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 doesn’t 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 Form 1040. If your taxable income is less than $100,000, you may be able to file Form 1040A. 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.

Considered Unmarried

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.

You file a separate return. A separate return includes a return claiming married filing separately, single, or head of household filing status.
You paid more than half of the cost of keeping up your home for the tax year.
Your spouse didn’t live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. See Temporary absencesunder Qualifying Person, later.
Your home was the main home of your child, stepchild, or foster child for more than half the year. (See Home of qualifying personunder Qualifying Person, later, for rules applying to a child’s birth, death, or temporary absence during the year.)
You must be able to claim an exemption for the child. However, you meet this test if you can’t claim the exemption only because the noncustodial parent can claim the child using the rules described in Children of divorced or separated parents (or parents who live apart)under Qualifying Child in chapter 3, or referred to inSupport Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) under Qualifying Relative in chapter 3. The general rules for claiming an exemption for a dependent are explained underExemptions for Dependents in chapter 3.

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 Pub. 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 don’t choose to treat your nonresident spouse as a resident alien. However, your spouse isn’t 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.

Choice to treat spouse as resident.

You are considered married if you choose to treat your spouse as a resident alien. See Pub. 519.

Keeping Up a Home

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 Worksheet 2-1.

Worksheet 2-1. Cost of Keeping Up a Home

	Amount You Paid	Total Cost
Property taxes	$	$
Mortgage interest expense
Rent
Utility charges
Repairs/Maintenance
Property insurance
Food eaten in the home
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 of the cost of keeping up the home.

Costs you include.

Include in the cost of keeping up a home expenses, such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home.

Costs you don’t include.

Don’t include the costs of clothing, education, medical treatment, vacations, life insurance, or transportation. Also, don’t include the rental value of a home you own or the value of your services or those of a member of your household.

Qualifying Person

See Table 2-1 to see who is a qualifying person. Any person not described in Table 2-1 isn’t a qualifying person.

Table 2-1. Who Is a Qualifying Person Qualifying You To File as Head of Household?¹

Caution. See the text of this chapter 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 can’t 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
qualifying relative⁴ who is your father or mother	you can’t 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, andhe or she is related to you in one of the ways listed under Relatives who don’t have to live with you in chapter 3 and you can claim an exemption for him or her⁵	a qualifying person.
	he or she didn’t live with you more than half the year	not a qualifying person.
	he or she isn’t related to you in one of the ways listed under Relatives who don’t have to live with you in chapter 3 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 can’t claim an exemption for him or her	not a qualifying person.
¹A person can’t qualify more than one taxpayer to use the head of household filing status for the year.
²The term “qualifying child” is defined in chapter 3. Note. If you are a noncustodial parent, the term “qualifying child” for head of household filing status doesn’t include a child who is your qualifying child for exemption purposes only because of the rules described under Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3. If you are the custodial parent and those rules apply, the child generally is your qualifying child for head of household filing status even though the child isn’t a qualifying child for whom you can claim an exemption.
³This person is a qualifying person if the only reason you can’t claim the exemption is that you can be claimed as a dependent on someone else’s return.
⁴The term “qualifying relative” is defined in chapter 3.
⁵If you can claim an exemption for a person only because of a multiple support agreement, that person isn’t a qualifying person. See Multiple Support Agreement in chapter 3.
⁶See Special rule for parent under Qualifying Person, earlier.

Example 1—Child.

Your unmarried son lived with you all year and was 18 years old at the end of the year. He didn’t provide more than half of his own support and doesn’t meet the tests to be a qualifying child of anyone else. As a result, he is your qualifying child (see Qualifying Child in chapter 3) and, because he is single, your qualifying person for you to claim head of household filing status.

Example 2—Child who isn’t 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 doesn’t meet the age test (explained under Qualifying Child in chapter 3), your son isn’t your qualifying child. Because he doesn’t meet the gross income test (explained later under Qualifying Relative in chapter 3), he isn’t your qualifying relative. As a result, he isn’t 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 in chapter 3) are met, she isn’t your qualifying person for head of household purposes because she isn’t related to you in one of the ways listed under Relatives who don’t have to live with you in chapter 3. See Table 2-1.

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 isn’t your qualifying child and, because he is your girlfriend’s qualifying child, he isn’t your qualifying relative (see Not a Qualifying Child Test in chapter 3). As a result, he isn’t your qualifying person for head of household purposes.

Home of qualifying person.

Generally, the qualifying person must live with you for more than half 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 doesn’t live with you. However, you must be able to claim an exemption for your father or mother. Also, you must pay more than half of the cost of keeping up a home that was the main home for the entire year for your father or mother.

If you pay more than half of the cost of keeping your parent in a rest home or home for the elderly, that counts as paying more than half of the cost of keeping up your parent’s main home.

Death or birth.

You may be eligible to file as head of household even if the individual who qualifies you for this filing status is born or dies during the year. If the individual is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. If the individual is anyone else, see Pub. 501.

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, military service, or detention in a juvenile facility. It must be reasonable to assume 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. For more information, see Pub 501.

Qualifying Widow(er)

If your spouse died in 2017, you can use married filing jointly as your filing status for 2017 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) as your filing status for 2 years following the year your spouse died. For example, if your spouse died in 2016, and you haven’t remarried, you may be able to use this filing status for 2017 and 2018.

This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you don’t itemize deductions). It doesn’t entitle you to file a joint return.

How to file.

If you file as qualifying widow(er), you can use Form 1040. If you also have taxable income of less than $100,000 and meet certain other conditions, you may be able to file Form 1040A. Check the box on line 5 of either form. If the child who qualifies you for this filing status isn’t claimed as your dependent on line 6c of Form 1040 or Form 1040A, enter the child’s name on line 4 of the form you are filing. Use the Married filing jointlycolumn of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax.

Eligibility rules.

You are eligible to file your 2017 return as a qualifying widow(er) if you meet all of the following tests.

You were entitled to file a joint return with your spouse for the year your spouse died. It doesn’t matter whether you actually filed a joint return.
Your spouse died in 2015 or 2016 and you didn’t remarry before the end of 2017.
You have a child or stepchild (not a foster child) whom you can claim as a dependent or could claim as a dependent except that, for 2017:

a. The child had gross income of $4,050 or more,

b. The child filed a joint return, or

c. You could be claimed as a dependent on someone else’s return.

If the child isn’t claimed as your dependent on Form 1040 or Form 1040A, line 6c, enter the child’s name on line 4 of the form you are filing. If you don’t enter the name, it will take us longer to process your return.
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 of the cost of keeping up a home for the year. See Keeping Up a Home, earlier, under Head of Household.

Example.

John’s wife died in 2015. John hasn’t remarried. During 2016 and 2017, he continued to keep up a home for himself and his child, who lives with him and for whom he can claim an exemption. For 2015, he was entitled to file a joint return for himself and his deceased wife. For 2016 and 2017, he can file as qualifying widower. After 2017, he can file as head of household if he qualifies.

Death or birth.

You may be eligible to file as a qualifying widow(er) 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) even if the child who qualifies you for this filing status has been kidnapped. See Pub. 501.

As mentioned earlier, this filing status is available for only 2 years following the year your spouse died.

3. Personal Exemptions and Dependents

What’s New

At the time this publication went to print, Congress was considering legislation that would do the following.

Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires.
Extend certain tax benefits that expired at the end of 2016 and that currently can’t be claimed on your 2017 tax return.
Change certain other tax provisions.

To learn whether this legislation was enacted resulting in changes that affect your 2017 tax return, go to Recent Developments at IRS.gov/Pub17.

Exemption phaseout. You lose at least part of the benefit of your exemptions if your adjusted gross income is more than a certain amount. For 2017, this amount is $156,900 for a married individual filing a separate return; $261,500 for a single individual; $287,650 for a head of household; and $313,800 for married individuals filing jointly or a qualifying widow(er). See Phaseout of Exemptions , later.

Introduction

This chapter discusses the following topics.

Personal exemptions — You generally can take one for yourself and, if you are married, one for your spouse.
Exemptions for dependents — You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. If you are entitled to claim an exemption for a dependent, that dependent can’t claim a personal exemption on his or her own tax return.
Phaseout of exemptions — Your deduction is reduced if your adjusted gross income is more than a certain amount.
Social security number (SSN) requirement for dependents — You must list the SSN of any dependent for whom you claim an exemption.

Deduction.

Exemptions reduce your taxable income. You can deduct $4,050 for each exemption you claim in 2017. But you may lose at least part of the dollar amount of your exemptions if your adjusted gross income is more than a certain amount. See Phaseout of Exemptions , later.

How to claim exemptions.

How you claim an exemption on your tax return depends on which form you file.

If you file Form 1040EZ, the exemption amount is combined with the standard deduction amount and entered on line 5.

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.

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.

Useful Items – You may want to see:

Publication

501Exemptions, Standard Deduction, and Filing Information

Form (and Instructions)

2120Multiple Support Declaration
8332Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent

Exemptions

There are two types of exemptions you may be able to take:

Personal exemptions for yourself and your spouse, and
Exemptions for dependents (dependency exemptions).

While each is worth the same amount ($4,050 for 2017), different rules apply to each type.

Personal Exemptions

You are generally allowed one exemption for yourself. If you are married, you may be allowed one exemption for your spouse. These are called personal exemptions.

Your Own Exemption

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 can’t take an exemption for yourself even if the other taxpayer doesn’t actually claim you as a dependent.

Your Spouse’s Exemption

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 an exemption for your spouse only if your spouse:

Had no gross income,
Isn’t filing a return, and
Wasn’t the dependent of another taxpayer.

You can claim an exemption for your spouse even if he or she is a nonresident alien. In that case, your spouse:

Must have no gross income for U.S. tax purposes,
Must not be filing a return, and
Must not be the dependent of another taxpayer.

Death of spouse.

If your spouse died during the year and you file a joint return for yourself and your deceased spouse, 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 can’t 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 during the year, you can’t take your former spouse’s exemption. This rule applies even if you provided all of your former spouse’s support.

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. However, see Joint Return Test , later.

The term “dependent” means:

A qualifying child, or
A qualifying relative.

The terms ” qualifying child ” and ” qualifying relative ” are defined later.

All the requirements for claiming an exemption for a dependent are summarized in Table 3-1.

Table 3-1. 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 chapter.

· You can’t claim any dependents if you (or your spouse, if filing jointly) could be claimed as a dependent by another taxpayer. · You can’t claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid. · You can’t 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.¹ · You can’t 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
1. 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. 2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse, if filing jointly), or (c) any age if permanently and totally disabled. 3. The child must have lived with you for more than half of the year.² 4. The child must not have provided more than half of his or her own support for the year. 5. The child must not be filing a joint return for the year (unless that return is filed only to get a refund of income tax withheld or estimated tax paid). If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. See Qualifying Child of More Than One Person to find out which person is the person entitled to claim the child as a qualifying child.		1. The person can’t be your qualifying child or the qualifying child of any other taxpayer. 2. The person either (a) must be related to you in one of the ways listed under Relatives who don’t 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). 3. The person’s gross income for the year must be less than $4,050.³ 4. 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 (or
parents who live apart), 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 (or parents who live apart), and kidnapped
children.

Dependent not allowed a personal exemption. If you can claim an exemption for your dependent, the dependent can’t claim his or her own personal exemption on his or her own tax return. This is true even if you don’t claim the dependent’s exemption on your return. It is also true if the dependent’s exemption on your return is reduced or eliminated under the phaseout rule described under Phaseout of Exemptions, later.

Housekeepers, maids, or servants.

If these people work for you, you can’t 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 if you claimed an exemption for that child. For more information, see chapter 34.

Exceptions

Even if you have a qualifying child or qualifying relative, you can claim an exemption for that person only if these three tests are met.

Dependent taxpayer test.
Joint return test.
Citizen or resident test.

These three tests are explained in detail here.

Dependent Taxpayer Test

If you can be claimed as a dependent by another person, you can’t claim anyone else as a dependent. Even if you have a qualifying child or qualifying relative, you can’t claim that person as a dependent.

If you are filing a joint return and your spouse can be claimed as a dependent by someone else, you and your spouse can’t claim any dependents on your joint return.

Joint Return Test

You generally can’t claim a married person as a dependent if he or she files a joint return.

Exception.

You can claim an exemption for a person who files a joint return if that person and his or her spouse file the joint return only to claim a refund of income tax withheld or estimated tax paid.

Example 1—Child files joint return.

You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. He earned $25,000 for the year. The couple files a joint return. You can’t take an exemption for your daughter.

Example 2—Child files joint return only as claim for refund of withheld tax.

Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. They lived with you all year. Neither is required to file a tax return. They don’t have a child. Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. The exception to the joint return test applies, so you aren’t disqualified from claiming an exemption for each of them just because they file a joint return. You can claim exemptions for each of them if all the other tests to do so are met.

Example 3—Child files joint return to claim American opportunity credit.

The facts are the same as in Example 2 except no taxes were taken out of your son’s pay or his wife’s pay. However, they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Because claiming the American opportunity credit is their reason for filing the return, they aren’t filing it only to get a refund of income tax withheld or estimated tax paid. The exception to the joint return test doesn’t apply, so you can’t claim an exemption for either of them.

Citizen or Resident Test

You generally can’t 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. However, there is an exception for certain adopted children, as explained next.

Exception for adopted child.

If you are a U.S. citizen or U.S. national who has legally adopted a child who isn’t 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 exception 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 and meet this test even if the other parent was a nonresident alien and the child was born in a foreign country.

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 aren’t U.S. residents and don’t meet this test. You can’t 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 chapter 24.

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.

Qualifying Child

Five tests must be met for a child to be your qualifying child. The five tests are:

Relationship,
Age,
Residency,
Support, and
Joint return.

These tests are explained next.

If a child meets the five tests to be the qualifying child of more than one person, there are rules you must use to determine which person can actually treat the child as a qualifying child. See Qualifying Child of More Than One Person, later.

Relationship Test

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.

Age Test

To meet this test, a child must be:

Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly),
A student under age 24 at the end of the year and younger than you (or your spouse, if filing jointly), 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 student, he doesn’t meet the age test because, at the end of the year, he wasn’t under age 19.

Child must be younger than you or spouse.

To be your qualifying child, a child who isn’t permanently and totally disabled must be younger than you. However, if you are married filing jointly, the child must be younger than you or your spouse but doesn’t have to be younger than both of you.

Example 1—Child not younger than you or spouse.

Your 23-year-old brother, who is a student and unmarried, lives with you and your spouse, who provide more than half of his support. He isn’t disabled. Both you and your spouse are 21 years old, and you file a joint return. Your brother isn’t your qualifying child because he isn’t younger than you or your spouse.

Example 2—Child younger than your spouse but not younger than you.

The facts are the same as in Example 1 except your spouse is 25 years old. Because your brother is younger than your spouse, and you and your spouse are filing a joint return, your brother is your qualifying child, even though he isn’t younger than you.

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 don’t have to be consecutive.

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.

School defined.

A school can be an elementary school, junior or 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 doesn’t 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 can’t 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.

Residency Test

To meet this test, your child must have lived with you for more than half 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,
Military service, or
Detention in a juvenile facility.

Death or birth of child.

A child who was born or died during the year is treated as having lived with you more than half of the year if your home was the child’s home more than half of the time he or she was alive during the year. The same is true if the child lived with you more than half the year except for any required hospital stay following birth.

Child born alive.

You may be able to claim an exemption for a child 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 can’t claim an exemption for a stillborn child.

Kidnapped child.

You may be able to treat your child as meeting the residency test even if the child has been kidnapped. See Pub. 501 for details.

Children of divorced or separated parents (or parents who live apart).

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:
1. Are divorced or legally separated under a decree of divorce or separate maintenance,
2. Are separated under a written separation agreement, or
3. Lived apart at all times during the last 6 months of the year, whether or not they are or were married.
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.
1. The custodial parent signs a written declaration, discussed later, that he or she won’t 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 and before 2009, see Post-1984 and pre-2009 divorce decree or separation agreement, later. If the decree or agreement went into effect after 2008, seePost-2008 divorce decree or separation agreement , later.)
2. A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2017 states that the noncustodial parent can claim the child as a dependent, the decree or agreement wasn’t changed after 1984 to say the noncustodial parent can’t claim the child as a dependent, and the noncustodial parent provides at least $600 for the child’s support during the year.

If statements (1) through (4) are all true, only the noncustodial parent can:

Claim the child as a dependent, and
Claim the child as a qualifying child for the child tax credit.

However, this doesn’t allow the noncustodial parent to claim head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, the earned income credit, or the health coverage tax credit. See Applying the tiebreaker rules to divorced or separated parents (or parents who live apart) , later.

Example—Earned income credit.

Even if statements (1) through (4) are all true and the custodial parent signs Form 8332 or a substantially similar statement that he or she won’t claim the child as a dependent for 2017, this doesn’t allow the noncustodial parent to claim the child as a qualifying child for the earned income credit. The custodial parent or another taxpayer, if eligible, can claim the child for the earned income credit.

Custodial parent and noncustodial parent.

The custodial parent is the parent with whom the child lived for the greater number of nights during 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 number of nights during the rest of the year.

A child is treated as living with a parent for a night if the child sleeps:

At that parent’s home, whether or not the parent is present, or
In the company of the parent, when the child doesn’t sleep at a parent’s home (for example, the parent and child are on vacation together).

Equal number of nights.

If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income (AGI).

December 31.

The night of December 31 is treated as part of the year in which it begins. For example, the night of December 31, 2017, is treated as part of 2017.

Emancipated child.

If a child is emancipated under state law, the child is treated as not living with either parent. See Examples 5 and 6.

Absences.

If a child wasn’t with either parent on a particular night (because, for example, the child was staying at a friend’s house), the child is treated as living with the parent with whom the child normally would have lived for that night, except for the absence. But if it can’t be determined with which parent the child normally would have lived or if the child would not have lived with either parent that night, the child is treated as not living with either parent that night.

Parent works at night.

If, due to a parent’s nighttime work schedule, a child lives for a greater number of days, but not nights, with the parent who works at night, that parent is treated as the custodial parent. On a school day, the child is treated as living at the primary residence registered with the school.

Example 1—Child lived with one parent for a greater number of nights.

You and your child’s other parent are divorced. In 2017, your child lived with you 210 nights and with the other parent 155 nights. You are the custodial parent.

Example 2—Child is away at camp.

In 2017, your daughter lives with each parent for alternate weeks. In the summer, she spends 6 weeks at summer camp. During the time she is at camp, she is treated as living with you for 3 weeks and with her other parent, your ex-spouse, for 3 weeks because this is how long she would have lived with each parent if she had not attended summer camp.

Example 3—Child lived same number of nights with each parent.

Your son lived with you 180 nights during the year and lived the same number of nights with his other parent, your ex-spouse. Your AGI is $40,000. Your ex-spouse’s AGI is $25,000. You are treated as your son’s custodial parent because you have the higher AGI.

Example 4—Child is at parent’s home but with other parent.

Your son normally lives with you during the week and with his other parent, your ex-spouse, every other weekend. You become ill and are hospitalized. The other parent lives in your home with your son for 10 consecutive days while you are in the hospital. Your son is treated as living with you during this 10-day period because he was living in your home.

Example 5—Child emancipated in May.

When your son turned age 18 in May 2017, he became emancipated under the law of the state where he lives. As a result, he isn’t considered in the custody of his parents for more than half of the year. The special rule for children of divorced or separated parents doesn’t apply.

Example 6—Child emancipated in August.

Your daughter lives with you from January 1, 2017, until May 31, 2017, and lives with her other parent, your ex-spouse, from June 1, 2017, through the end of the year. She turns 18 and is emancipated under state law on August 1, 2017. Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2017. You are the custodial parent.

Written declaration.

The custodial parent must 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 a copy of 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.

Post-1984 and pre-2009 divorce decree or separation agreement.

If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. 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 won’t 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.

Post-2008 divorce decree or separation agreement.

The noncustodial parent can’t attach pages from the decree or agreement instead of Form 8332 if the decree or agreement went into effect after 2008. The custodial parent must sign either Form 8332 or a similar statement whose only purpose is to release the custodial parent’s claim to an exemption for a child, and the noncustodial parent must attach a copy to his or her return. The form or statement must release the custodial parent’s claim to the child without any conditions. For example, the release must not depend on the noncustodial parent paying support.

The noncustodial parent must attach the required information even if it was filed with a return in an earlier year.

Revocation of release of claim to an exemption.

The custodial parent can revoke a release of claim to exemption. For the revocation to be effective for 2017, the custodial parent must have given (or made reasonable efforts to give) written notice of the revocation to the noncustodial parent in 2016 or earlier. The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation.

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, and who lived apart at all times during the last 6 months of the year.

Support Test (To Be a Qualifying Child)

To meet this test, the child can’t 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 isn’t support, see Support Test (To Be a Qualifying Relative) , later. If you aren’t sure whether a child provided more than half of his or her own support, you may find Worksheet 3-1 helpful.

Worksheet 3-1. 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. Don’t include funds provided by the state; include those amounts on line 23 instead	1.
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.
4.	Enter the total amount in the person’s savings and other accounts at the end of the year	4.
5.	Add lines 2 through 4. (This amount should equal line 1.)	5.
Expenses for Entire Household (where the person you supported lived)
6.	Lodging (complete line 6a or 6b):
	a. Enter the total rent paid	6a.
	b. Enter the fair rental value of the home. If the person you supported owned the home, also include this amount in line 21	6b.
7.	Enter the total food expenses	7.
8.	Enter the total amount of utilities (heat, light, water, etc. not included in line 6a or 6b)	8.
9.	Enter the total amount of repairs (not included in line 6a or 6b)	9.
10.	Enter the total of other expenses. Don’t include expenses of maintaining the home, such as mortgage interest, real estate taxes, and insurance	10.
11.	Add lines 6a through 10. These are the total household expenses	11.
12.	Enter total number of persons who lived in the household	12.
Expenses for the Person You Supported
13.	Divide line 11 by line 12. This is the person’s share of the household expenses	13.
14.	Enter the person’s total clothing expenses	14.
15.	Enter the person’s total education expenses	15.
16.	Enter the person’s total medical and dental expenses not paid for or reimbursed by insurance	16.
17.	Enter the person’s total travel and recreation expenses	17.
18.	Enter the total of the person’s other expenses	18.
19.	Add lines 13 through 18. This is the total cost of the person’s support for the year	19.
Did the Person Provide More Than Half of His or Her Own Support?
20.	Multiply line 19 by 50% (0.50)	20.
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.
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; don’t 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 don’t meet the support test for this person to be either your qualifying child or your qualifying relative. Stop here.
	Did You Provide More Than Half?
23.	Enter the amount others provided for the person’s support. Include amounts provided by state, local, and other welfare societies or agencies. Don’t include any amounts included on line 1	23.
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 don’t meet the support test for this person to be your qualifying relative. You can’t 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 or Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) , or Kidnapped child under Qualifying Relative.

Example.

You provided $4,000 toward your 16-year-old son’s support for the year. He has a part-time job and provided $6,000 to his own support. He provided more than half of his own support for the year. He isn’t your qualifying child.

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 aren’t 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 aren’t considered support you provided. For more information about the deduction for charitable contributions, see chapter 24. If your unreimbursed expenses aren’t deductible as charitable contributions, they may qualify as support you provided.

If you are in the trade or business of providing foster care, your unreimbursed expenses aren’t considered support provided by you.

Example 1.

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 didn’t care for her as a trade or business or to benefit the agency that placed her in their home. The Smiths’ unreimbursed expenses aren’t deductible as charitable contributions but are considered support they provided for Lauren.

Example 2.

You provided $3,000 toward your 10-year-old foster child’s support for the year. The state government provided $4,000, which is considered support provided by the state, not by the child. See Support provided by the state (welfare, food stamps, housing, etc.) , later. Your foster child didn’t provide more than half of her own support for the year.

Scholarships.

A scholarship received by a child who is a student isn’t taken into account in determining whether the child provided more than half of his or her own support.

Joint Return Test (To Be a Qualifying Child)

To meet this test, the child can’t file a joint return for the year.

Exception.

An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid.

Example 1—Child files joint return.

You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. He earned $25,000 for the year. The couple files a joint return. Because your daughter and her husband file a joint return, she isn’t your qualifying child.

Example 2—Child files joint return only as a claim for refund of withheld tax.

Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. They lived with you all year. Neither is required to file a tax return. They don’t have a child. Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met.

Example 3—Child files joint return to claim American opportunity credit.

Qualifying Child of More Than One Person

If your qualifying child isn’t a qualifying child of anyone else, this topic doesn’t apply to you and you don’t need to read about it. This is also true if your qualifying child isn’t a qualifying child of anyone else except your spouse with whom you plan to 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 (or parents who live apart) described earlier, see Applying the tiebreaker rules to divorced or separated parents (or parents who live apart), later.

Sometimes, a child meets the relationship, age, residency, support, and joint return 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 take all of the following tax benefits (provided the person is eligible for each benefit).

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 can’t take any of these benefits based on this qualifying child. In other words, you and the other person can’t agree to divide these benefits between you.

Tiebreaker rules.

To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply.

If only one of the persons is the child’s parent, the child is treated as the qualifying child of the parent.
If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents.
If the parents don’t file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year.
If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year.
If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person’s AGI is higher than the highest AGI of any of the child’s parents who can claim the child.

Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child.

You may be able to qualify for the earned income credit under the rules for taxpayers without a qualifying child if you have a qualifying child for the earned income credit who is claimed as a qualifying child by another taxpayer. For more information, see Pub. 596.

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, unmarried, and your AGI is $9,000. Your mother’s AGI is $15,000. Jane’s father didn’t live with you or your daughter. You haven’t signed Form 8332 (or a similar statement) to release the child’s exemption to the noncustodial parent.

Jane is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. However, only one of you can claim her. Jane isn’t a qualifying child of anyone else, including her father. You agree to let your mother claim Jane. This means your mother can claim Jane as a qualifying child for all of the six tax benefits listed earlier, if she qualifies for each of those benefits (and if you don’t claim Jane as a qualifying child for any of those tax benefits).

Example 2—Parent has higher AGI than grandparent.

The facts are the same as in Example 1 except your AGI is $18,000. Because your mother’s AGI isn’t higher than yours, she can’t claim Jane. Only you can claim Jane.

Example 3—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 qualifying child. In this case, you, as the child’s parent, will be the only one allowed to claim Jane as a qualifying child. The IRS will disallow your mother’s claim to the six tax benefits listed earlier based on Jane. However, your mother may qualify for the earned income credit as a taxpayer without a qualifying child.

Example 4—Qualifying children split between two persons.

The facts are the same as in Example 1 except 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. However, if your mother’s AGI is higher than yours, you can allow your mother to claim one or more of the children. For example, if you claim one child, your mother can claim the other two.

Example 5—Taxpayer who is a qualifying child.

The facts are the same as in Example 1 except you are only 18 years old and didn’t provide more than half of your own support for the year. This means you are your mother’s qualifying child. If she can claim you as a dependent, then you can’t claim your daughter as a dependent because of the Dependent Taxpayer Testexplained earlier.

Example 6—Separated parents.

You, your husband, and your 10-year-old son lived together until August 1, 2017, 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, support, and joint return tests for both of you. At the end of the year, you and your husband still weren’t divorced, legally separated, or separated under a written separation agreement, so the rule for children of divorced or separated parents (or parents who live apart) doesn’t 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 doesn’t claim your son as a qualifying child, you can claim your son as a qualifying child for the dependency exemption, child tax credit, and exclusion for dependent care benefits (if you qualify for each of those tax benefits). However, you can’t claim head of household filing status because you and your husband didn’t live apart for the last 6 months of the year. As a result, your filing status is married filing separately, so you can’t claim the earned income credit or the credit for child and dependent care expenses.

Example 7—Separated parents claim same child.

The facts are the same as in Example 6 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 2017, the boy lived with him longer than with you. If you claimed an exemption or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. If you don’t have another qualifying child or dependent, the IRS will also disallow your claim to the exclusion for dependent care benefits. In addition, because you and your husband didn’t live apart for the last 6 months of the year, your husband can’t claim head of household filing status. As a result, his filing status is married filing separately, so he can’t claim the earned income credit or the credit for child and dependent care expenses.

Example 8—Unmarried parents.

You, your 5-year-old son, and your son’s father lived together all year. You and your son’s father aren’t married. Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, support, and joint return tests for both you and his father. Your AGI is $12,000 and your son’s father’s AGI is $14,000. Your son’s father agrees to let you claim the child as a qualifying child. This means you can claim him as a qualifying child for the dependency exemption, 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 doesn’t claim your son as a qualifying child for any of those tax benefits).

Example 9—Unmarried parents claim same child.

The facts are the same as in Example 8 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 or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. If you don’t have another qualifying child or dependent, the IRS will also disallow your claim to head of household filing status, the credit for child and dependent care expenses, and the exclusion for dependent care benefits. However, you may be able to claim the earned income credit as a taxpayer without a qualifying child.

Example 10—Child didn’t 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’s parents file jointly, have an AGI of less than $9,000, and don’t live with you or their child. Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. However, only your mother can treat her as a qualifying child. This is because your mother’s AGI, $15,000, is more than your AGI, $9,300.

Applying the tiebreaker rules to divorced or separated parents (or parents who live apart).

If a child is treated as the qualifying child of the noncustodial parent under the rules described earlier for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. However, only the custodial parent can claim the credit for child and dependent care expenses or the exclusion for dependent care benefits for the child, and only the custodial parent can treat the child as a dependent for the health coverage tax credit. Also, the noncustodial parent can’t claim the child as a qualifying child for head of household filing status or the earned income credit. Instead, the custodial parent, if eligible, or other eligible person can claim the child as a qualifying child for those two benefits. If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules just explained determine whether the custodial parent or another eligible person can treat the child as a qualifying child.

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. Your AGI is $10,000. Your mother’s AGI is $25,000. Your son’s father didn’t live with you or your son.

Under the rules explained earlier for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for him. Because of this, you can’t claim an exemption or the child tax credit for your son. However, those rules don’t allow your son’s father to 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, the earned income credit, or the health coverage tax credit.

You and your mother didn’t have any child care expenses or dependent care benefits, so neither of you can claim the credit for child and dependent care expenses or the exclusion for dependent care benefits. Also, neither of you qualifies for the health coverage tax credit. 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, support, and joint return tests for both you and your mother. (Note: The support test doesn’t 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 don’t claim him as a qualifying child for the earned income credit. (You can’t claim head of household filing status because your mother paid the entire cost of keeping up the home.) You may be able to claim the earned income credit as a taxpayer without a qualifying child.

Example 2.

The facts are the same as in Example 1 except your AGI is $25,000 and your mother’s AGI is $21,000. Your mother can’t claim your son as a qualifying child for any purpose because her AGI isn’t higher than yours.

Example 3.

The facts are the same as in Example 1 except 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 head of household filing status unless she has another qualifying child or dependent. Your mother can’t claim the earned income credit as a taxpayer without a qualifying child because her AGI is more than $15,010.

Qualifying Relative

Four tests 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 may be able to treat a child as your qualifying relative even if the child has been kidnapped. See Pub. 501 for details.

Not a Qualifying Child Test

A child isn’t 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 student, lives with you and meets all the tests to be your qualifying child. She isn’t 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 isn’t your qualifying relative.

Example 3.

Your son lives with you but isn’t your qualifying child because he is 30 years old and doesn’t 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 isn’t your qualifying child because he doesn’t 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 isn’t 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) isn’t required to file an income tax return and either:

Doesn’t file an income tax return, or
Files a return only to get a refund of income tax withheld or estimated tax paid.

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, isn’t required to file a 2017 tax return, and doesn’t file a 2017 tax return. Both your friend and her child are your qualifying relatives if the support test is 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 doesn’t claim the earned income credit or any other tax credits or deductions. Both your friend and her child are your qualifying relatives if the support test is 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 can’t claim your friend’s child as your qualifying relative. Also, you can’t claim your friend as your qualifying relative because of the gross income test explained later.

Child in Canada or Mexico.

You may be able to claim your child as a dependent even if the child lives in Canada or Mexico. If the child doesn’t live with you, the child doesn’t meet the residency test to be your qualifying child. However, the child may still be your qualifying relative. If the persons the child does live with aren’t U.S. citizens and have no U.S. gross income, those persons aren’t “taxpayers,” so the child isn’t the qualifying child of any other taxpayer. If the child isn’t the qualifying child of any other taxpayer, the child is your qualifying relative as long as the gross income test and the support test are met.

You can’t 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. 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 isn’t a U.S. citizen and has no U.S. income, so she isn’t a “taxpayer.” Your children aren’t your qualifying children because they don’t meet the residency test. But since they aren’t the qualifying children of any other taxpayer, they are your qualifying relatives and you can claim them as dependents. You may also be able to claim your mother as a dependent if the gross income and support tests are met.

Member of Household or Relationship Test

To meet this test, a person must either:

Live with you all year as a member of your household, or
Be related to you in one of the ways listed under Relatives who don’t have to live with you

If at any time during the year the person was your spouse, that person can’t be your qualifying relative. However, see Personal Exemptions , earlier.

Relatives who don’t have to live with you.

A person related to you in any of the following ways doesn’t 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 son or daughter of your half brother or half 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 aren’t ended by death or divorce.

Example.

You and your wife began supporting your wife’s father, a widower, in 2011. Your wife died in 2016. Despite your wife’s death, your father-in-law continues to meet this test, even if he doesn’t 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 doesn’t 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 doesn’t 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,
Military service, or
Detention in a juvenile facility.

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 qualify 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 doesn’t 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 doesn’t meet this test and you can’t 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.

Gross Income Test

To meet this test, a person’s gross income for the year must be less than $4,050.

Gross income defined.

Gross income is all income in the form of money, property, and services that isn’t 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. Don’t deduct taxes, repairs, or other expenses 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 taxable unemployment compensation, taxable social security benefits, and certain scholarship and fellowship grants. Scholarships received by degree candidates and used for tuition, fees, supplies, books, and equipment required for particular courses generally aren’t included in gross income. For more information about scholarships, see chapter 12.

Disabled dependent working at sheltered workshop.

For purposes of the gross income test, the gross income of an individual who is permanently and totally disabled at any time during the year doesn’t 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 3-1 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 aren’t 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 can’t include in your contribution to your child’s support any support 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 can’t claim an exemption for your mother because the $4,000 you provide isn’t more than half of her total support of $9,600 ($4,000 + $600 + $4,800 + $200).

Example 2.

Your niece 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 can’t claim an exemption for her because you provide less than half of her support.

Social security benefits.

If a married couple receives 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 won’t be considered as used entirely for that person’s support if it is shown that part of the payments weren’t used for that purpose.

Foster care.

Payments you receive for the support of a foster child from a child placement agency are considered support provided by the agency. See Foster care payments and expenses , earlier.

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.

Total Support

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 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:

Fair rental value of lodging	$ 1,800
Clothing, transportation, and recreation	2,400
Medical expenses	1,200
Share of food (1/5 of $5,200)	1,040
Total support	$6,440

The support Frank and Mary provide, $4,040 ($1,800 lodging + $1,200 medical expenses + $1,040 food), 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:

Support provided	Father	Mother
Fair rental value of lodging	$1,000	$1,000
Pension spent for their support	2,100	2,100
Share of food (1/6 of $6,000)	1,000	1,000
Medical expenses for mother		600
Parents’ total support	$4,100	$4,700

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 aren’t 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.

Fair rental value 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, and the cost of furniture and appliances. 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 don’t 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 doesn’t include heat and utilities. The house is completely furnished with furniture belonging to your parents. You pay $600 for their utility bills. Utilities aren’t 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 + $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, 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 isn’t 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, don’t 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 don’t give it to your daughter but merely let her use it, don’t 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 the rest of your son’s support, $4,000. Because 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 isn’t your qualifying child. You didn’t provide more than half of his total support, so he isn’t your qualifying relative. You can’t 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, aren’t 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 haven’t 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 chapter 32.

Other support items.

Other items may be considered as support depending on the facts in each case.

Don’t Include in Total Support

The following items aren’t 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 student.

Survivors’ and Dependents’ Educational Assistance payments used for the support of the child who receives them.

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 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 aren’t related to her. She doesn’t live with them. Because more than half of her support is provided by persons who can’t 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 (or Parents Who Live Apart)

In most cases, a child of divorced or separated parents (or parents who live apart) will be a qualifying child of one of the parents. See Children of divorced or separated parents (or parents who live apart) under Qualifying Child, earlier. However, if the child doesn’t meet the requirements to be a qualifying child of either parent, the child may be a qualifying relative of one of the parents. If you think this might apply to you, see Pub. 501.

Phaseout of Exemptions

You lose at least part of the benefit of your exemptions if your adjusted gross income (AGI) is above a certain amount. For 2017, the phaseout begins at the following amounts.

Filing Status	AGI Level That Reduces Exemption Amount
Married filing separately		$156,900
Single		261,500
Head of household		287,650
Married filing jointly		313,800
Qualifying widow(er)		313,800

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. If your AGI exceeds the amount shown above by more than $122,500 ($61,250 if married filing separately), the amount of your deduction for exemptions is reduced to zero.

If your AGI exceeds the level for your filing status, use Worksheet 3-2 to figure the amount of your deduction for exemptions.

Worksheet 3-2.Worksheet for Determining the Deduction for Exemptions

1.	Is the amount on Form 1040, line 38, more than the amount on line 4 below for your filing status?
	No. Stop. Multiply $4,050 by the total number of exemptions claimed on line 6d of Form 1040 and enter the result on Form 1040, line 42.
	Yes. Continue.
2.	Multiply $4,050 by the total number of exemptions claimed on line 6d of Form 1040		2.
3.	Enter the amount from Form 1040, line 38	3.
4.	Enter the amount shown below for your filing status: · Married filing separately—$156,900 · Single—$261,500 · Head of household—$287,650 · Married filing jointly or Qualifying widow(er)—$313,800	4.
5.	Subtract line 4 from line 3. If the result is more than $122,500 ($61,250 if married filing separately), stop here. You can’t take a deduction for exemptions	5.
6.	Divide line 5 by $2,500 ($1,250 if married filing separately). If the result isn’t a whole number, round it up to the next higher whole number (for example, increase .00004 to 1)	6.
7.	Multiply line 6 by 2% (0.02) and enter the result as a decimal (rounded to at least three places)	7.
8.	Multiply line 2 by line 7		8.
9.	Deduction for exemptions. Subtract line 8 from line 2. Enter the result here and on Form 1040, line 42		9.

Social Security Numbers for Dependents

You must show 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 don’t show the dependent’s SSN when required or if you show an incorrect SSN, the exemption may be disallowed.

No SSN.

If a person for whom you expect to claim an exemption on your return doesn’t 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 SSA.gov or at your local SSA office.

It usually takes about 2 weeks to get an SSN once the SSA has all the information it needs. If you don’t have a required SSN by the filing due date, you can file Form 4868 for an extension of time to file.

Born and died in 2017.

If your child was born and died in 2017, and you don’t 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 doesn’t have and can’t 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 doesn’t have and isn’t 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 can’t 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.

4. Tax Withholding and Estimated Tax

What’s New for 2018

At the time this publication went to print, Congress was considering legislation that would do the following.

Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires.
Extend certain tax benefits that expired at the end of 2016 and that currently can’t be claimed on your 2017 tax return.
Change certain other tax provisions.

To learn whether this legislation was enacted resulting in changes that affect your 2017 tax return, go to Recent Developments at IRS.gov/Pub17.

Tax law changes for 2018. When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2018. For more information, see Pub. 505, Tax Withholding and Estimated Tax.

Reminders

Estimated tax safe harbor for higher income taxpayers. If your 2017 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2018 or 110% of the tax shown on your 2017 return to avoid an estimated tax penalty.

Introduction

This chapter discusses how to pay your tax as you earn or receive income during the year. In general, the federal income tax is a pay-as-you-go tax. There are two ways to pay as you go.

If you are an employee, your employer probably withholds income tax from your pay. Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. The amount withheld is paid to the IRS in your name.

Estimated tax.If you don’t pay your tax through withholding, or don’t pay enough tax that way, you may have to pay estimated tax. People who are in business for themselves generally will have to pay their tax this way. Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well.

This chapter explains these methods. In addition, it also explains the following.

Credit for withholding and estimated tax.When you file your 2017 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc., and for the estimated tax you paid for 2017. Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 38).

Underpayment penalty.If you didn’t pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. In most cases, the IRS can figure this penalty for you. See Underpayment Penalty for 2017 at the end of this chapter.

Useful Items – You may want to see:

Publication

505Tax Withholding and Estimated Tax

Form (and Instructions)

W-4Employee’s Withholding Allowance Certificate
W-4PWithholding Certificate for Pension or Annuity Payments
W-4SRequest for Federal Income Tax Withholding From Sick Pay
W-4VVoluntary Withholding Request
1040-ESEstimated Tax for Individuals
2210Underpayment of Estimated Tax by Individuals, Estates, and Trusts
2210-FUnderpayment of Estimated Tax by Farmers and Fishermen

Tax Withholding for 2018

This section discusses income tax withholding on:

Salaries and wages,
Tips,
Taxable fringe benefits,
Sick pay,
Pensions and annuities,
Gambling winnings,
Unemployment compensation, and
Certain federal payments.

This section explains the rules for withholding tax from each of these types of income.

This section also covers backup withholding on interest, dividends, and other payments.

Salaries and Wages

Income tax is withheld from the pay of most employees. Your pay includes your regular pay, bonuses, commissions, and vacation allowances. It also includes reimbursements and other expense allowances paid under a nonaccountable plan. See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan.

If your income is low enough that you won’t have to pay income tax for the year, you may be exempt from withholding. This is explained under Exemption From Withholding , later.

You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. If your employer doesn’t agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2018 .

Military retirees.

Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes.

Household workers.

If you are a household worker, you can ask your employer to withhold income tax from your pay. A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter.

Tax is withheld only if you want it withheld and your employer agrees to withhold it. If you don’t have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2018 .

Farmworkers.

Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these:

Pays you cash wages of less than $150 during the year, and
Has expenditures for agricultural labor totaling less than $2,500 during the year.

Differential wage payments.

When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security, Medicare, or federal unemployment (FUTA) tax withholding. The wages and withholding will be reported on Form W-2, Wage and Tax Statement.

Determining Amount of Tax Withheld Using Form W-4

The amount of income tax your employer withholds from your regular pay depends on two things.

The amount you earn in each payroll period.
The information you give your employer on Form W-4.

Form W-4 includes four types of information that your employer will use to figure your withholding.

Whether to withhold at the single rate or at the lower married rate.
How many withholding allowances you claim (each allowance reduces the amount withheld).
Whether you want an additional amount withheld.
Whether you are claiming an exemption from withholding in 2018. See Exemption From Withholding , later.

Note.

You must specify a filing status and a number of withholding allowances on Form W-4. You can’t specify only a dollar amount of withholding.

New Job

When you start a new job, you must fill out Form W-4 and give it to your employer. Your employer should have copies of the form. If you need to change the information later, you must fill out a new form.

If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. You may be able to avoid overwithholding if your employer agrees to use the part-year method. See Part-Year Method in chapter 1 of Pub. 505 for more information.

Employee also receiving pension income.

If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. However, you can choose to split your withholding allowances between your pension and job in any manner.

Changing Your Withholding

During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances.

If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days.

Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason.

Changing your withholding for 2019.

If events in 2018 will decrease the number of your withholding allowances for 2019, you must give your employer a new Form W-4 by December 1, 2018. If the event occurs in December 2018, submit a new Form W-4 within 10 days.

Checking Your Withholding

After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. You should try to have your withholding match your actual tax liability. If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. If too much tax is withheld, you will lose the use of that money until you get your refund. Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability.

Note.

You can’t give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax.

Completing Form W-4 and Worksheets

Form W-4 has worksheets to help you figure how many withholding allowances you can claim. The worksheets are for your own records. Don’t give them to your employer.

Multiple jobs.

If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Then split your allowances between the Forms W-4 for each job. You can’t claim the same allowances with more than one employer at the same time. You can claim all your allowances with one employer and none with the other(s), or divide them any other way.

Married individuals.

If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Use only one set of worksheets. You can divide your total allowances any way, but you can’t claim an allowance that your spouse also claims.

If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits.

Alternative method of figuring withholding allowances.

You don’t have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. For more information, seeAlternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Pub. 505, chapter 1.

Personal Allowances Worksheet.

Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply.

Deduction and Adjustments Worksheet.

Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2018 tax return and you want to reduce your withholding. Also, complete this worksheet when you have changes to these items to see if you need to change your withholding.

Two-Earners/Multiple Jobs Worksheet.

You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax.

Getting the Right Amount of Tax Withheld

In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules.

You accurately complete all the Form W-4 worksheets that apply to you.
You give your employer a new Form W-4 when changes occur.

But because the worksheets and withholding methods don’t account for all possible situations, you may not be getting the right amount withheld. This is most likely to happen in the following situations.

You are married and both you and your spouse work.
You have more than one job at a time.
You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income.
You will owe additional amounts with your return, such as self-employment tax.
Your withholding is based on obsolete Form W-4 information for a substantial part of the year.
Your earnings are more than the amount shown under Check your withholdingin the instructions at the top of page 1 of Form W-4.
You work only part of the year.
You change the number of your withholding allowances during the year.

Cumulative wage method.

If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. You must ask your employer in writing to use this method.

To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc.) since the beginning of the year.

Publication 505

To make sure you are getting the right amount of tax withheld, get Pub. 505. It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. If you don’t have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2018 , later.

You can use the IRS Withholding Calculator at IRS.gov/W4App, instead of Pub. 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased.

Rules Your Employer Must Follow

It may be helpful for you to know some of the withholding rules your employer must follow. These rules can affect how to fill out your Form W-4 and how to handle problems that may arise.

New Form W-4.

When you start a new job, your employer should have you complete a Form W-4. Beginning with your first payday, your employer will use the information you give on the form to figure your withholding.

If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in.

No Form W-4.

If you don’t give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances.

Repaying withheld tax.

If you find you are having too much tax withheld because you didn’t claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Your employer can’t repay any of the tax previously withheld. Instead, claim the full amount withheld when you file your tax return.

However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you don’t have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Your employer can repay the amount that was withheld incorrectly. If you aren’t repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return.

Exemption From Withholding

If you claim exemption from withholding, your employer won’t withhold federal income tax from your wages. The exemption applies only to income tax, not to social security, Medicare, or FUTA tax withholding.

You can claim exemption from withholding for 2018 only if both of the following situations apply.

For 2017 you had a right to a refund of all federal income tax withheld because you had no tax liability.
For 2018 you expect a refund of all federal income tax withheld because you expect to have no tax liability.

Students.

If you are a student, you aren’t automatically exempt. See chapter 1 to find out if you must file a return. If you work only part time or only during the summer, you may qualify for exemption from withholding.

Age 65 or older or blind.

If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Pub. 505, to help you decide if you qualify for exemption from withholding. Don’t use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2018 return. Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Pub. 505.

Claiming exemption from withholding.

To claim exemption, you must give your employer a Form W-4. Don’t complete lines 5 and 6. Enter “Exempt” on line 7.

If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. If you claim exemption in 2018, but you expect to owe income tax for 2019, you must file a new Form W-4 by December 1, 2018.

Your claim of exempt status may be reviewed by the IRS.

An exemption is good for only 1 year.

You must give your employer a new Form W-4 by February 15 each year to continue your exemption.

Supplemental Wages

Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. The payer can figure withholding on supplemental wages using the same method used for your regular wages. However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate.

Expense allowances.

Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages.

Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you don’t return the excess payments within a reasonable period of time.

For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26.

Penalties

You may have to pay a penalty of $500 if both of the following apply.

You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld.
You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4.

There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both.

These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. A simple error or an honest mistake won’t result in one of these penalties. For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, won’t be charged a W-4 penalty.

Tips

The tips you receive while working on your job are considered part of your pay. You must include your tips on your tax return on the same line as your regular pay. However, tax isn’t withheld directly from tip income, as it is from your regular pay. Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay.

See chapter 6 for information on reporting your tips to your employer. For more information on the withholding rules for tip income, see Pub. 531, Reporting Tip Income.

How employer figures amount to withhold.

The tips you report to your employer are counted as part of your income for the month you report them. Your employer can figure your withholding in either of two ways.

By withholding at the regular rate on the sum of your pay plus your reported tips.
By withholding at the regular rate on your pay plus a percentage of your reported tips.

Not enough pay to cover taxes.

If your regular pay isn’t enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. See Giving your employer money for taxes in chapter 6.

Allocated tips.

Your employer shouldn’t withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. Withholding is based only on your pay plus your reported tips. Your employer should refund to you any incorrectly withheld tax. See Allocated Tips in chapter 6 for more information.

Taxable Fringe Benefits

The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Your employer generally must withhold income tax on these benefits from your regular pay.

For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5.

Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Your employer must notify you if this choice is made.

For more information on withholding on taxable fringe benefits, see chapter 1 of Pub. 505.

Sick Pay

Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. To qualify as sick pay, it must be paid under a plan to which your employer is a party.

If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. An agent who doesn’t pay regular wages to you may choose to withhold income tax at a flat rate.

However, if you receive sick pay from a third party who isn’t acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. See Form W-4S , later.

If you receive payments under a plan in which your employer doesn’t participate (such as an accident or health plan where you paid all the premiums), the payments aren’t sick pay and usually aren’t taxable.

Union agreements.

If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. See your union representative or your employer for more information.

Form W-4S.

If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Its instructions contain a worksheet you can use to figure the amount you want withheld. They also explain restrictions that may apply.

Give the completed form to the payer of your sick pay. The payer must withhold according to your directions on the form.

Estimated tax.

If you don’t request withholding on Form W-4S, or if you don’t have enough tax withheld, you may have to make estimated tax payments. If you don’t pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. See Underpayment Penalty for 2017 at the end of this chapter.

Pensions and Annuities

Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. This rule applies to distributions from:

A traditional individual retirement arrangement (IRA);
A life insurance company under an endowment, annuity, or life insurance contract;

A pension, annuity, or profit-sharing plan;
A stock bonus plan; and
Any other plan that defers the time you receive compensation.

The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). Income tax withholding from an ERD is mandatory.

More information.

For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. For information on IRAs, see chapter 17. For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Pub. 505.

Gambling Winnings

Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings.

Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding.

Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery.
Any other wager, if the proceeds are at least 300 times the amount of the bet.

It doesn’t matter whether your winnings are paid in cash, in property, or as an annuity. Winnings not paid in cash are taken into account at their fair market value.

Exception.

Gambling winnings from bingo, keno, and slot machines generally aren’t subject to income tax withholding. However, you may need to provide the payer with a social security number to avoid withholding. See Backup withholding on gambling winnings in chapter 1 of Pub. 505. If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. See Estimated Tax for 2018 , later.

If you don’t pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. See Underpayment Penalty for 2017 at the end of this chapter.

Form W-2G.

If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Report the tax withheld on line 64 of Form 1040.

Unemployment Compensation

You can choose to have income tax withheld from unemployment compensation. To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer.

All unemployment compensation is taxable. If you don’t have income tax withheld, you may have to pay estimated tax. See Estimated Tax for 2018 , later.

If you don’t pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. For information, see Underpayment Penalty for 2017 at the end of this chapter.

Federal Payments

You can choose to have income tax withheld from certain federal payments you receive. These payments are:

Social security benefits,
Tier 1 railroad retirement benefits,
Commodity credit corporation loans you choose to include in your gross income,
Payments under the Agricultural Act of 1949 (7 U.S.C. 1421 et. seq.), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because:

Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or
You were unable to plant crops because of a natural disaster described in (a), and

Any other payment under federal law as determined by the Secretary.

To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer.

If you don’t choose to have income tax withheld, you may have to pay estimated tax. See Estimated Tax for 2018 , later.

More information.

For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. Get Pub. 225, Farmer’s Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments.

Backup Withholding

Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. The information return shows how much you were paid during the year. It also includes your name and taxpayer identification number (TIN). TINs are explained in chapter 1 under Social Security Number (SSN) .

These payments generally aren’t subject to withholding. However, “backup” withholding is required in certain situations. Backup withholding can apply to most kinds of payments that are reported on Form 1099.

The payer must withhold at a flat 28% rate in the following situations.

You don’t give the payer your TIN in the required manner.
The IRS notifies the payer that the TIN you gave is incorrect.
You are required, but fail, to certify that you aren’t subject to backup withholding.
The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. The IRS will do this only after it has mailed you four notices over at least a 210-day period.

See Backup Withholding in chapter 1 of Pub. 505 for more information.

Penalties.

There are civil and criminal penalties for giving false information to avoid backup withholding. The civil penalty is $500. The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both.

Estimated Tax for 2018

Estimated tax is the method used to pay tax on income that isn’t subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income isn’t enough.

Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. If you don’t pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. If you don’t pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. For information on when the penalty applies, see Underpayment Penalty for 2017 at the end of this chapter.

Who Doesn’t Have To Pay Estimated Tax

If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. To do this, give a new Form W-4 to your employer. See chapter 1 of Pub. 505.

Estimated tax not required.

You don’t have to pay estimated tax for 2018 if you meet all three of the following conditions.

You had no tax liability for 2017.
You were a U.S. citizen or resident alien for the whole year.
Your 2017 tax year covered a 12-month period.

You had no tax liability for 2017 if your total tax was zero or you didn’t have to file an income tax return. For the definition of “total tax” for 2017, see Pub. 505, chapter 2.

Who Must Pay Estimated Tax

If you owe additional tax for 2017, you may have to pay estimated tax for 2018.

You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments.

General rule.

In most cases, you must pay estimated tax for 2018 if both of the following apply.

You expect to owe at least $1,000 in tax for 2018, after subtracting your withholding and refundable credits.
You expect your withholding plus your refundable credits to be less than the smaller of:
1. 90% of the tax to be shown on your 2018 tax return, or
2. 100% of the tax shown on your 2017 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). Your 2017 tax return must cover all 12 months.

If the result from using the general rule above suggests that you won’t have enough withholding, complete the 2018 Estimated Tax Worksheet in Pub. 505 for a more accurate calculation.

Special rules for farmers, fishermen, and higher income taxpayers.

If at least two-thirds of your gross income for tax year 2017 or 2018 is from farming or fishing, substitute 66²/₃% for 90% in (2a) under the General rule , earlier. If your AGI for 2017 was more than $150,000 ($75,000 if your filing status for 2018 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. See Figure 4-A and Pub. 505, chapter 2, for more information.

Figure 4-A. Do You Have To Pay Estimated Tax?

Figure 4-A Do You Have To Pay Estimated Tax?

Please click here for the text description of the image.

Aliens.

Resident and nonresident aliens also may have to pay estimated tax. Resident aliens should follow the rules in this chapter unless noted otherwise. Nonresident aliens should get Form 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals.

You are an alien if you aren’t a citizen or national of the United States. You are a resident alien if you either have a green card or meet the substantial presence test. For more information about the substantial presence test, see Pub. 519, U.S. Tax Guide for Aliens.

Married taxpayers.

If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income.

You and your spouse can make joint estimated tax payments even if you aren’t living together.

However, you and your spouse can’t make joint estimated tax payments if:

You are legally separated under a decree of divorce or separate maintenance,
You and your spouse have different tax years, or
Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Pub. 519)).

If you don’t qualify to make joint estimated tax payments, apply these rules to your separate estimated income. Making joint or separate estimated tax payments won’t affect your choice of filing a joint tax return or separate returns for 2018.

2017 separate returns and 2018 joint return.

If you plan to file a joint return with your spouse for 2018, but you filed separate returns for 2017, your 2017 tax is the total of the tax shown on your separate returns. You filed a separate return if you filed as single, head of household, or married filing separately.

2017 joint return and 2018 separate returns.

If you plan to file a separate return for 2018 but you filed a joint return for 2017, your 2017 tax is your share of the tax on the joint return. You file a separate return if you file as single, head of household, or married filing separately.

To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2017 using the same filing status as for 2018. Then multiply the tax on the joint return by the following fraction.

	The tax you would have paid had you filed a separate return
	The total tax you and your spouse would have paid had you filed separate returns

Example.

Joe and Heather filed a joint return for 2017 showing taxable income of $48,500 and a tax of $6,346. Of the $48,500 taxable income, $40,100 was Joe’s and the rest was Heather’s. For 2018, they plan to file married filing separately. Joe figures his share of the tax on the 2017 joint return as follows.

	Tax on $40,100 based on a separate return	$5,770
	Tax on $8,400 based on a separate return	843
	Total	$6,613
	Joe’s percentage of total ($5,770 ÷ $6,613)	87.3%
	Joe’s share of tax on joint return ($6,346 × 87.3%)	$5,540

How To Figure Estimated Tax

To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year.

When figuring your 2018 estimated tax, it may be helpful to use your income, deductions, and credits for 2017 as a starting point. Use your 2017 federal tax return as a guide. You can use Form 1040-ES and Pub. 505 to figure your estimated tax. Nonresident aliens use Form 1040-ES (NR) and Pub. 505 to figure estimated tax (see chapter 8 of Pub. 519 for more information).

You must make adjustments both for changes in your own situation and for recent changes in the tax law. For a discussion of these changes, visit IRS.gov.

For more complete information on how to figure your estimated tax for 2018, see chapter 2 of Pub. 505.

When To Pay Estimated Tax

For estimated tax purposes, the tax year is divided into four payment periods. Each period has a specific payment due date. If you don’t pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. The payment periods and due dates for estimated tax payments are shown next.

	For the period:	Due date:*
	Jan. 1 – March 31	April 17
	April 1 – May 31	June 15
	June 1 – August 31	Sept. 17
	Sept. 1– Dec. 31	Jan. 15, next year

*See Saturday, Sunday, holiday rule and January payment .

Saturday, Sunday, holiday rule.

If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that isn’t a Saturday, Sunday, or legal holiday.

January payment.

If you file your 2018 Form 1040 or Form 1040A by January 31, 2019, and pay the rest of the tax you owe, you don’t need to make the payment due on January 15, 2019.

Fiscal year taxpayers.

If your tax year doesn’t start on January 1, see the Form 1040-ES instructions for your payment due dates.

When To Start

You don’t have to make estimated tax payments until you have income on which you will owe income tax. If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. You can pay all your estimated tax at that time, or you can pay it in installments. If you choose to pay in installments, make your first payment by the due date for the first payment period. Make your remaining installment payments by the due dates for the later periods.

No income subject to estimated tax during first period.

If you don’t have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. The following chart shows when to make installment payments.

If you first have income on which you must pay estimated tax:	Make a payment by:*	Make later installments by:*
Before April 1	April 17	June 15 Sept. 17 Jan. 15, next year
April 1–May 31	June 15	Sept. 17 Jan. 15, next year
June 1–Aug. 31	Sept. 17	Jan. 15, next year
After Aug. 31	Jan. 15, next year	(None)

*See Saturday, Sunday, holiday rule and January payment .

How much to pay to avoid a penalty.

To determine how much you should pay by each payment due date, see How To Figure Each Payment next.

How To Figure Each Payment

You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. These methods are described in chapter 2 of Pub. 505. If you don’t pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return.

If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Pub. 505 for information on how to avoid a penalty.

Underpayment penalty.

Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. See chapter 4 of Pub. 505 for more information.

Change in estimated tax.

After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods.

Estimated Tax Payments Not Required

You don’t have to pay estimated tax if your withholding in each payment period is at least as much as:

One-fourth of your required annual payment, or
Your required annualized income installment for that period.

You also don’t have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000.

How To Pay Estimated Tax

There are several ways to pay estimated tax.

Credit an overpayment on your 2017 return to your 2018 estimated tax.

Pay by direct transfer from your bank account, or pay by debit or credit card using a pay-by-phone system or the Internet.
Send in your payment (check or money order) with a payment voucher from Form 1040-ES.

Credit an Overpayment

If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2017, you can apply part or all of it to your estimated tax for 2018. On line 77 of Form 1040, or line 49 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Take the amount you have credited into account when figuring your estimated tax payments.

You can’t have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. You also can’t use that overpayment in any other way.

Pay Online

The IRS offers an electronic payment option that is right for you. Paying online is convenient, secure, and helps make sure we get your payments on time. To pay your taxes online or for more information, go to IRS.gov/Payments. You can pay using any of the following methods.

IRS Direct Payfor online transfers directly from your checking or savings account at no cost to you, go toIRS.gov/Payments.
Pay by Card.To pay by debit or credit card, go to IRS.gov/Payments. A convenience fee is charged by these service providers.
Electronic Funds Withdrawal(EFW) is an integrated e-file/e-pay option offered when filing your federal taxes electronically using tax preparation software, through a tax professional, or the IRS atIRS.gov/Payments.
Online Payment Agreement.If you can’t pay in full by the due date of your tax return, you can apply for an online monthly installment agreement at IRS.gov/Payments. Once you complete the online process, you will receive immediate notification of whether your agreement has been approved. A user fee is charged.
IRS2GOis the mobile application of the IRS. You can access Direct Pay or Pay By Card by downloading the application.

Pay by Phone

Paying by phone is another safe and secure method of paying electronically. Use one of the following methods (1) call one of the debit or credit card providers, or (2) use the Electronic Federal Tax Payment System (EFTPS).

Debit or credit card.

Call one of our service providers. Each charges a fee that varies by provider, card type, and payment amount.

WorldPay US, Inc.
1-844-PAY-TAX-8^TM (1-844-729-8298)
www.payUSAtax.com

Official Payments Corporation
1-888-UPAY-TAX^TM (1-888-872-9829)
www.officialpayments.com

Link2Gov Corporation
1-888-PAY-1040^TM (1-888-729-1040)
www.PAY1040.com

EFTPS.

To use EFTPS, you must be enrolled either online or have an enrollment form mailed to you. To make a payment using EFTPS, call 1-800-555-4477 (English) or 1-800-244-4829 (Español). People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-733-4829. For more information about EFTPS, go to IRS.gov/Payments or www.EFTPS.gov.

Pay by Mobile Device

To pay through your mobile device, download the IRS2Go application.

Pay by Cash

Pay by Check or Money Order Using the Estimated Tax Payment Voucher

Before submitting a payment through the mail using the estimated tax payment voucher, please consider alternative methods. One of our safe, quick, and easy electronic payment options might be right for you.

If you choose to mail in your payment, each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES.

During 2017, if you:

made at least one estimated tax payment but not by electronic means,
didn’t use software or a paid preparer to prepare or file your return,

then you should receive a copy of the 2018 Form 1040-ES/V.

The enclosed payment vouchers will be preprinted with your name, address, and social security number. Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs.

Use the window envelopes that came with your Form 1040-ES package. If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live.

No checks of $100 million or more accepted.

The IRS can’t accept a single check (including a cashier’s check) for amounts of $100,000,000 ($100 million) or more. If you are sending $100 million or more by check, you’ll need to spread the payment over 2 or more checks with each check made out for an amount less than $100 million. This limit does not apply to other methods of payment (such as electronic payments). Please consider a method of payment other than check if the amount of the payment is over $100 million.

Note.

These criteria can change without notice. If you don’t receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to IRS.gov/Form1040ES and print a copy of Form 1040-ES which includes four blank payment vouchers. Complete one of these and make your payment timely to avoid penalties for paying late.

Don’t use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments.

If you didn’t pay estimated tax last year, you can order Form 1040-ES from the IRS (see the inside back cover of this publication) or download it from IRS.gov. Follow the instructions to make sure you use the vouchers correctly.

Joint estimated tax payments.

If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return.

Change of address.

You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form.

Credit for Withholding and Estimated Tax for 2017

When you file your 2017 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Also take credit for the estimated tax you paid for 2017. These credits are subtracted from your total tax. Because these credits are refundable, you should file a return and claim these credits, even if you don’t owe tax.

Two or more employers.

If you had two or more employers in 2017 and were paid wages of more than $127,200, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. You may be able to claim the excess as a credit against your income tax when you file your return. See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 38.

Withholding

If you had income tax withheld during 2017, you should be sent a statement by January 31, 2018, showing your income and the tax withheld. Depending on the source of your income, you should receive:

Form W-2, Wage and Tax Statement,
Form W-2G, Certain Gambling Winnings, or
A form in the 1099 series.

Forms W-2 and W-2G.

If you file a paper return, always file Form W-2 with your income tax return. File Form W-2G with your return only if it shows any federal income tax withheld from your winnings.

You should get at least two copies of each form. If you file a paper return, attach one copy to the front of your federal income tax return. Keep one copy for your records. You also should receive copies to file with your state and local returns.

Form W-2

Your employer is required to provide or send Form W-2 to you no later than January 31, 2018. You should receive a separate Form W-2 from each employer you worked for.

If you stopped working before the end of 2017, your employer could have given you your Form W-2 at any time after you stopped working. However, your employer must provide or send it to you by January 31, 2018.

If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later.

If you haven’t received your Form W-2 by January 31, you should ask your employer for it. If you don’t receive it by early February, call the IRS.

Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Include the federal income tax withheld (as shown in box 2 of Form W-2) on:

Line 64 if you file Form 1040,
Line 40 if you file Form 1040A, or
Line 7 if you file Form 1040EZ.

In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay.

Form W-2G

If you had gambling winnings in 2017, the payer may have withheld income tax. If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld.

Report the amounts you won on line 21 of Form 1040. Take credit for the tax withheld on line 64 of Form 1040. If you had gambling winnings, you must use Form 1040; you can’t use Form 1040A or Form 1040EZ.

The 1099 Series

Most forms in the 1099 series aren’t filed with your return. These forms should be furnished to you by January 31, 2018 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2018). Unless instructed to file any of these forms with your return, keep them for your records. There are several different forms in this series, including:

Form 1099-B, Proceeds From Broker and Barter Exchange Transactions;
Form 1099-DIV, Dividends and Distributions;
Form 1099-G, Certain Government Payments;
Form 1099-INT, Interest Income;
Form 1099-K, Payment Card and Third Party Network Transactions;
Form 1099-MISC, Miscellaneous Income;
Form 1099-OID, Original Issue Discount;
Form 1099-PATR, Taxable Distributions Received From Cooperatives;
Form 1099-Q, Payments From Qualified Education Programs;
Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.;
Form 1099-S, Proceeds From Real Estate Transactions;
Form RRB-1099, Payments by the Railroad Retirement Board.

If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. See the instructions to these forms for details.

Form 1099-R.

Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. Include the amount withheld in the total on line 64 of Form 1040 or line 40 of Form 1040A. You can’t use Form 1040EZ if you received payments reported on Form 1099-R.

Backup withholding.

If you were subject to backup withholding on income you received during 2017, include the amount withheld, as shown on your Form 1099, in the total on line 64 of Form 1040, line 40 of Form 1040A, or line 7 of Form 1040EZ.

Form Not Correct

If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Call the telephone number or write to the address given for the payer on the form. The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2.

In certain situations, you will receive two forms in place of the original incorrect form. This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. This form will have an “X” in the “CORRECTED” box at the top of the form. The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box won’t be checked).

Form Received After Filing

If you file your return and you later receive a form for income that you didn’t include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U.S. Individual Income Tax Return.

Separate Returns

If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Don’t include any amount withheld from your spouse’s income. However, different rules may apply if you live in a community property state.

Community property states are listed in chapter 2. For more information on these rules, and some exceptions, see Pub. 555, Community Property.

Fiscal Years

If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Pub. 505.

Estimated Tax

Take credit for all your estimated tax payments for 2017 on line 65 of Form 1040 or line 41 of Form 1040A. Include any overpayment from 2016 that you had credited to your 2017 estimated tax. You must use Form 1040 or Form 1040A if you paid estimated tax. You can’t use Form 1040EZ.

Name changed.

If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating:

When you made the payments,
The amount of each payment,
Your name when you made the payments, and
Your social security number.

The statement should cover payments you made jointly with your spouse as well as any you made separately.

Be sure to report the change to the Social Security Administration. This prevents delays in processing your return and issuing any refunds.

Separate Returns

If you and your spouse made separate estimated tax payments for 2017 and you file separate returns, you can take credit only for your own payments.

If you made joint estimated tax payments, you must decide how to divide the payments between your returns. One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. If you can’t agree, you must divide the payments in proportion to each spouse’s individual tax as shown on your separate returns for 2017.

Divorced Taxpayers

If you made joint estimated tax payments for 2017, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. If you can’t agree on how to divide the payments, you must divide them in proportion to each spouse’s individual tax as shown on your separate returns for 2017.

If you claim any of the joint payments on your tax return, enter your former spouse’s social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. If you divorced and remarried in 2017, enter your present spouse’s SSN in that space and write your former spouse’s SSN, followed by “DIV,” to the left of Form 1040, line 65, or Form 1040A, line 41.

Underpayment Penalty for 2017

If you didn’t pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty.

Generally, you won’t have to pay a penalty for 2017 if any of the following apply.

The total of your withholding and estimated tax payments was at least as much as your 2016 tax (or 110% of your 2016 tax if your AGI was more than $150,000, $75,000 if your 2017 filing status is married filing separately) and you paid all required estimated tax payments on time;
The tax balance due on your 2017 return is no more than 10% of your total 2017 tax, and you paid all required estimated tax payments on time;
Your total 2017 tax minus your withholding and refundable credits is less than $1,000;
You didn’t have a tax liability for 2016 and your 2016 tax year was 12 months; or
You didn’t have any withholding taxes and your current year tax less any household employment taxes is less than $1,000.

See Pub. 505, chapter 4, for a definition of “total tax” for 2016 and 2017.

Farmers and fishermen.

Special rules apply if you are a farmer or fisherman. See Farmers and Fishermen in chapter 4 of Pub. 505 for more information.

IRS can figure the penalty for you.

If you think you owe the penalty but you don’t want to figure it yourself when you file your tax return, you may not have to. Generally, the IRS will figure the penalty for you and send you a bill. However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. See chapter 4 of Pub. 505.