Instructions For Form 1040ez - Income Tax Return For Single And Joint Filers With No Dependents - Internal Revenue Service - 2007 Page 12
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36Form 1040EZ — Lines 8a and 8b
The amount of your nontaxable combat pay should be shown in
Form(s) W-2, box 12, with code Q. If you are filing a joint return
Step 2
Earned Income
and both you and your spouse received nontaxable combat pay, you
can each make your own election.
1. Figure earned income:
To have the IRS figure the credit for
Credit figured by the IRS.
you:
Form 1040EZ, line 1
1. Enter “EIC” in the space to the left of line 8a on Form
Subtract, if included in line 1, any:
1040EZ.
}
•
Taxable scholarship or fellowship
2. Be sure you enter the nontaxable combat pay you elect to
grant not reported on a Form W-2.
include in earned income on Form 1040EZ, line 8b. See
•
Amount received for work
Combat pay, nontaxable, above.
performed while an inmate in a
3. If your EIC for a year after 1996 was reduced or disallowed,
penal institution (enter “PRI” in the
see Form 8862, who must file, below.
space to the left of line 1 on Form
1040EZ).
You must file Form 8862 if your EIC for
Form 8862, who must file.
•
Amount received as a pension or
a year after 1996 was reduced or disallowed for any reason other
than a math or clerical error. But do not file Form 8862 if either of
annuity from a nonqualified deferred
the following applies.
compensation plan or a
–
nongovernmental section 457 plan
1. You filed Form 8862 for another year, the EIC was allowed
(enter “DFC” and the amount
for that year, and your EIC has not been reduced or disallowed
again for any reason other than a math or clerical error.
subtracted in the space to the left of
line 1 on Form 1040EZ). This
2. The only reason your EIC was reduced or disallowed in the
earlier year was because it was determined that a child listed
amount may be shown on your
on Schedule EIC was not your qualifying child.
Form W-2 in box 11. If you
received such an amount but box 11
Also, do not file Form 8862 or take the credit for:
is blank, contact your employer for
•
2 years after the most recent tax year for which there was a
the amount received as a pension or
final determination that your EIC claim was due to reckless or
annuity.
intentional disregard of the EIC rules, or
•
Add all of your nontaxable combat
10 years after the most recent tax year for which there was a
pay if you elect to include it in
final determination that your EIC claim was due to fraud.
earned income. Also enter this
amount on Form 1040EZ, line 8b.
If you were on extended active duty
Members of the military.
outside the United States, your home is considered to be in the
See Combat pay, nontaxable on this
United States during that duty period. Extended active duty is
page.
+
military duty ordered for an indefinite period or for a period of more
than 90 days. Once you begin serving extended active duty, you are
considered to be on extended active duty even if you do not serve
!
more than 90 days.
Electing to include nontaxable
CAUTION
combat pay may increase or decrease
A person is permanently and
Permanently and totally disabled.
your EIC. Figure the credit with and
totally disabled if, at any time in 2007, the person cannot engage in
without your nontaxable combat pay
any substantial gainful activity because of a physical or mental
before making the election.
condition and a doctor has determined that this condition has lasted
or can be expected to last continuously for at least a year or can be
expected to lead to death.
Earned Income =
For the EIC, a valid SSN is a num-
Social security number (SSN).
ber issued by the Social Security Administration unless “Not Valid
for Employment” is printed on the social security card and the
number was issued solely to apply for or receive a federally funded
benefit.
2. Is your earned income less than $12,590 ($14,590 if married
To find out how to get an SSN, see page 9. If you will not have
filing jointly)?
an SSN by the date your return is due, see What if You Cannot File
Yes. Go to Step 3.
No.
on Time? on page 5.
STOP
You cannot take the credit.
A student is a child who during any part of 5 calendar
Student.
months of 2007 was enrolled as a full-time student at a school, or
took a full-time, on-farm training course given by a school or a
Step 3
How To Figure the Credit
state, county, or local government agency. A school includes a
technical, trade, or mechanical school. It does not include an
1. Do you want the IRS to figure the credit for you?
on-the-job training course, correspondence school, or a school of-
fering courses only through the Internet.
Yes. See Credit
No. Go to the worksheet
figured by the IRS on
on page 13.
Any refund you receive as a
this page.
Welfare benefits, effect of credit on.
result of taking the EIC will not be used to determine if you are
eligible for the following programs or how much you can receive
from them. But if the refund you receive because of the EIC is not
Definitions and Special Rules
spent within a certain period of time, it can count as an asset (or
resource) and affect your eligibility.
(listed in alphabetical order)
•
Temporary Assistance for Needy Families (TANF).
•
If you were a member of the U.S. Armed
Combat pay, nontaxable.
Medicaid and supplemental security income (SSI).
Forces who served in a combat zone, certain pay is excluded from
•
Food stamps and low-income housing.
your income. See Combat Zone Exclusion in Pub. 3. You can elect
to include this pay in your earned income when figuring the EIC.
Need more information or forms? See page 31.
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