Form It-40 - Indiana Full-Year Resident Individual Income Tax Booklet - 2013 Page 31
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60*Caution. Electing to include nontaxable combat
amount on line 2 of that schedule includes an amount that was also
pay may increase or decrease your EIC. Figure the
reported on federal Form 1040, line 7;
credit with and without your nontaxable combat pay
•
Determine how much of the amount on federal Form 1040, line
before making the election.
7, was also reported on federal Schedule SE, Section A, line 2, or
Section B, line 2.
Earned Income =
Box B
•
Subtract that amount from the amount on federal Form 1040, line
7. Enter the result in the first space of Step 6, line 2.
Were you self-employed at any time in 2013, or did you file fed-
•
Be sure to answer “yes” to question 1 in Step 6.
3.
eral Schedule SE because you were a member of the clergy or you
had church employee income, or did you file federal Schedule C
Combat pay, nontaxable. If you were a member of the U.S. Armed
or C-EZ as a statutory employee?
Forces who served in a combat zone, certain pay is excluded from your
income.
Yes. Skip question 4 and Step 7; go to Worksheet B on page 34.
•
If you included your combat pay when figuring your federal EIC,
No. Continue.
then enter the same amount in Step 6, line 2.
•
If you did not include it when figuring your federal EIC, then do
If you have:
not enter any amount in Step 6, line 2.
•
2 or more qualifying children, is your total earned income (Box
B) less than $43,100?
Exception to “time lived with you” condition. A child is considered
•
1 qualifying child, is your total earned income (Box B) less than
to have lived with you for all of 2013 if the child was born or died in
$37,900?
2013 and your home was this child’s home for the entire time he or she
•
No qualifying children, is your total earned income (Box B) less
was alive in 2013. Temporary absences, such as for school, vacation,
than $14,300?
medical care, or detention in a juvenile facility, count as time lived at
home. If your child is presumed to have been kidnapped by someone
Yes. Go to Step 7.
who is not a family member, see Indiana’s Pub. EIC to find out if that
No. STOP. You cannot take the credit.
child is a qualifying child for the EIC. If you were in the military sta-
tioned outside the United States, see Members of the military on
Step 7 How to Figure the Credit
page 32.
Go to Worksheet A on page 33.
Federal Form 4797 filers. If the amount on Form 1040, line 13, in-
cludes an amount from federal Form 4797, you must use Worksheet 1
in Indiana’s Pub. EIC to see if you can take the EIC. Otherwise, STOP;
Definitions and Special Rules*
(listed in alphabetical order)
you cannot take the EIC.
Adopted child. An adopted child is always treated as your own child.
Foster child.
The term “adopted child” includes a child who was lawfully placed
•
Any child you cared for as your own child and who is (a) your
with you for legal adoption, even if the adoption is not final.
brother, sister, stepbrother, or stepsister; (b) a descendant (such as
a child, including an adopted child) of your brother, sister, step-
Church employees. A church employee means an employee (other
brother, or stepsister; or (c) a child placed with you by an autho-
than a minister or member of a religious order) of a church or quali-
rized placement agency. For example, if you acted as the parent of
fied church-controlled organization that is exempt from employer So-
your niece or nephew, this child is considered your foster child.
cial Security and Medicare taxes. Determine how much of the amount
•
The qualifying foster child must live with you for the entire year
on federal Form 1040, line 7, was also reported on federal Schedule SE,
(except for temporary absences).
Section B, line 5a. Subtract that amount from the amount on federal
Form 1040, line 7, and enter the result in the first space of Step 6, line
Grandchild. For the EIC, this means any descendant of your son,
2. Be sure to answer “Yes” to question 1 in Step 6.
daughter, or adopted child. For example, a grandchild includes your
great-grandchild, great-great-grand child, etc.
Claim for refund. A claim for refund is a federal return filed only to
get a refund of withheld income tax or estimated tax paid. A federal
Married child. A child who was married at the end of 2013 is a quali-
return is not a claim for refund if the EIC or any other similar refund-
fying child only if (a) you can claim him or her as your dependent on
able credit is claimed on it.
federal Form 1040 or 1040A, line 6c, or (b) you could have claimed
him or her as your dependent except for the special rule for Children
Clergy. The following instructions apply to ministers, members of
of divorced or parents who lived apart. Get Indiana’s Pub. EIC for more
religious orders who have not taken a vow of poverty, and Christian
information about this special rule.
Science practitioners. If you are filing federal Schedule SE and the
Page 31
IT-40 Booklet 2013
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