Form 1 - Schedule Instructions - 2006 (Page 4 of 7) in pdf

2006 Form 1 — Schedule Instructions

Line 12. Undergraduate Student

Schedule Y, Line 14 — Home Heating Fuel

14. Excess home heating fuel deduction.

Loan Interest Deduction

Deduction (Only if Single, Head of Household,

Subtract line 3 from the amount entered in

A deduction is allowed for interest paid on a qual-

or Married Filing Jointly)

Schedule Y, line 14 (line 10 or line 13 of work-

ified undergraduate student loan. To be eligible for

sheet). Enter here and in line 3 of the Schedule

1. Enter your total 5.3% income from Form 1,

the deduction, the “education debt” must be a loan

B, Line 36 and Schedule D, Line 19 Worksheet

line 10. Not less than “0” * . . . . . . .

that is administered by the financial aid office of a

on page 13 . . . . . . . . . . . . . . . . . . .

2. Enter the total of Schedule Y, lines 1

two-year or four-year college at which you, or a

through 10 . . . . . . . . . . . . . . . . . . . .

* Add back any Abandoned Building Renovation

qualified dependent, were enrolled as an under-

3. Subtract line 2 from line 1. Not less

deduction claimed on Schedule(s) C and/or E

graduate student. Additionally, the loan must have

than “0” . . . . . . . . . . . . . . . . . . . . . .

before entering an amount in line 1.

been secured through a state student loan pro-

4. Enter total Massachusetts bank interest

** If filing Schedule D-IS, Installment Sales, see

gram, a federal student loan program, or a com-

or the interest exemption amount, whichever

the Schedule D-IS instructions for the amount

mercial lender, and must have been spent solely

is smaller, from Form 1, line 5a or

to enter in line 6. Schedule D-IS and instruc-

for the purposes of paying tuition and other ex-

line 5b . . . . . . . . . . . . . . . . . . . . . . .

tions are available on DOR’s website at

penses directly related to the school enrollment.

Note: If Form 1, line 10 is a loss, do not com-

Enter the amount of such interest paid in Sched-

plete line 4 above. Instead, combine Form 1,

ule Y, line 12. This deduction is only allowed if not

line 10 with the smaller amount of total Mass-

Line 15. Claim of Right Deduction

claiming the same expenses in line 10 of Sched-

achusetts bank interest or the interest exemp-

For tax years beginning on or after January 1, 2005,

ule Y, Student Loan Interest Deduction.

tion amount. Enter the result in line 4 above,

taxpayers who have paid Massachusetts personal

unless the result is a loss. If the result is a loss,

income taxes in a prior year on income attributed

Line 13. Deductible Amount of

enter “0.”

to them under a “claim of right” may deduct the

Qualified Contributory Pension

5. Enter amount from Schedule B, line 35.

amount of that income from their gross income if it

Income from Another State or

If there is no entry in Schedule B, line 35 or

later develops that they were not in fact entitled to

Political Subdivision Included in

if not filing Schedule B, enter the amount

the income, and have repaid the amounts in ques-

from Form 1, line 20 . . . . . . . . . . . .

Form 1, Line 4

tion. The deduction is allowed in the year of repay-

6. Enter the amount from Schedule D, line 18. **

ment, provided that the repayment is not otherwise

Massachusetts allows a deduction for contribu-

Not less than “0” . . . . . . . . . . . . . . .

deductible in determining Massachusetts income

tory pension income received from another state

7. Add lines 3 through 6 . . . . . . . . .

taxable under M.G.L. ch. 62. Some examples in

or one of its political subdivisions which does not

If you are single and the total in line 7 is $50,000

which the claim of right may be applied for are:

tax such income from Massachusetts or its politi-

or less, or if you are filing as head of household

cal subdivisions. For guidelines to determine which

◗ Stock under claim of ownership. Gains from

or married filing a joint return, and the total in

state’s pensions are exempt in Massachusetts, see

sales of stock under a claim of ownership must be

line 7 is $75,000 or less, you qualify for the

TIR 95-9. Enter any deductible amount of such in-

included, regardless of whether the taxpayer actu-

Home Heating Fuel deduction. Go to line 8.

come in line 13 of Schedule Y that was included in

ally owned it;

Otherwise, you are not eligible for this deduction.

Form 1, line 4.

◗ Employment contracts. Amounts in settlement

8. Enter the lesser of the amount paid for home

of employment contracts must be included not-

Line 14. Home Heating Fuel

heating oil, natural gas or propane purchased

withstanding the prospect of eventual repayment

between January 1, 2006 and March 31, 2006

Deduction

to the employer of an amount equivalent to or

or $800 . . . . . . . . . . . . . . . . . . . . . .

For 2006, certain taxpayers may take a deduction

greater than the amount received;

9. Enter any amount of home heating fuel de-

for expenses incurred for home heating oil, natural

duction taken last year, from 2005 Schedule Y,

◗ Dividends. Where a taxpayer receives a dividend

gas or propane purchased between January 1,

line 14 . . . . . . . . . . . . . . . . . . . . . . .

that must be repaid in a later year (e.g., because it

2006 and March 31, 2006, but only if they did not

10. Add lines 8 and 9. If $800 or less, enter the

impaired corporate capital), the dividend must be

take the full $800 deduction for home heating fuel

amount from line 8 in Schedule Y, line 14. If

included in the year of receipt;

in 2005. The deduction is available to single tax-

greater than $800, go to line 11 . . .

payers with adjusted gross income of $50,000 or

◗ Corporate notes. Where a taxpayer receives a

11. Enter $800. . . . . . . . . . . . . . . . .

less and to joint filers and heads of household with

12. Subtract line 11 from line 10. . .

distribution with respect to holding of notes, the

adjusted gross income of $75,000 or less. A qual-

13. Subtract line 12 from line 8. Enter result

income must be included regardless of whether it

ifying taxpayer who did not take the full $800 de-

here and in Schedule Y, line 14 . . . .

could be challenged by senior creditors;

duction in 2005 may take the remainder in 2006

Note: Go to line 14 if your home heating fuel

◗ Mistake in validity of claim. The claim of right

for purchases made between January 1, 2006 and

deduction in Schedule Y, line 14 (line 10 or line

doctrine applies where a taxpayer merely mistakes

March 31, 2006. Complete the Schedule Y, line 14

13 of worksheet) is more than the amount of

the validity of his claim; or

worksheet to calculate the amount of the home

5.3% income after deductions in line 3. The

◗ Advanced insurance commissions.

heating fuel deduction. Special rules apply for rent-

excess may be applied against all your interest

ers and owners of condominiums and cooperative

and dividend income and income taxed at 12%.

If you are entitled to claim this deduction, enter the

dwellings. See TIR 05-18, available at

Any remaining excess amount may then be ap-

amount claimed in Schedule Y, line 15. For more

gov/dor, for more information.

plied against your long-term capital gain income.

information, see TIR 06-4.

Complete the Schedule B, Line 36 and Schedule

Note: If married filing separately, you are not eli-

D, Line 19 Worksheet on page 13 to calculate

gible for the Home Heating Fuel deduction.

the excess deduction amount.

Form 1 - Schedule Instructions - 2006 Page 4

Related Articles

Related forms

Related Categories