Fillable Form Inc 250 - Individual Income Tax Return (Page 3 of 4) in pdf

INCOME TAX

Who Must File a Return (also see Taxable Income):

1. A person whose legal domicile* is in Tennessee and whose taxable interest and dividend income exceeded $1,250 ($2,500 if married,

filing jointly) during the tax year.

2. A person who moved into or out of Tennessee during the year and whose taxable interest and dividend income during the period of

Tennessee residency exceeded $1,250 ($2,500 if married, filing jointly).

3. A person whose legal domicile* is in another state, but who maintained a residence in Tennessee for more than six months of the

year and whose taxable interest and dividend income exceeded $1,250 ($2,500 if married, filing jointly). Military personnel and full-

time students having legal domicile in another state are not required to file.

4. A person, bank, etc. acting as a Tennessee fiduciary (administrator, executor, guardian, trustee, or other acting in a similar capacity)

who received $1,250 or more in taxable interest and dividend income for the benefit of Tennessee residents. A trust or estate is entitled

to only one exemption of $1,250, regardless of the number of beneficiaries. An executor or administrator of a Tennessee estate must

pay tax on income received by the estate until stocks and bonds have been transferred to beneficiaries. However, effective April 5,

1995, a trustee of a charitable remainder trust is not responsible for payment of tax. The trustee shall report to each resident beneficiary

the amount of taxable income distributed to him and the beneficiary shall be liable for the tax. Trustees who receive taxable income

on behalf of NONRESIDENT BENEFICIARIES are NOT required to file a return. However, when taxable income is received on

behalf of both RESIDENT and NONRESIDENT BENEFICIARIES, ONLY THE TAXABLE INCOME OF ANY RESIDENT

BENEFICIARY is required to be reported in Schedule A on the back and on Line 1, Page 1 of the return. Nonresident income may

be reported in Schedule B on the back of the return.

5. A Tennessee partnership whose taxable interest and dividend income exceeded $1,250. The partnership is liable for the tax, if any.

Exemptions:

1. An exemption of $1,250, or $2,500 for married persons filing jointly, is allowed against total taxable interest and dividend income

reported annually.

2. A person who is legally blind is exempt from the tax. Legal blindness means that vision does not exceed 20/200 in the better eye

with correcting lenses or that the widest diameter of the visual field subtends an angle no greater than 20 degrees.

(a) To obtain the exemption, SINGLE FILERS need only to send a written statement from their physician, certifying their blindness,

to the Department of Revenue. A TAX RETURN IS NOT REQUIRED TO BE FILED BY SINGLE FILERS WHO ARE BLIND.

(b) For JOINT FILERS, when taxable income is received by a blind person and a sighted spouse, only the taxable income of the

sighted person is required to be reported in Schedule A on the back and on Line 1, Page 1 of the return. The income of the blind

person is exempted and may be reported in Schedule B on the back of the return. If the taxable dividend/interest income is received

jointly by a blind person and a sighted spouse, only one-half (1/2) of the jointly received income will be exempt from tax. The sighted

person is entitled to only a $1,250 exemption on a jointly filed return. A physician's statement for the blind spouse is required with

the return.

3. If a person is certified by a medical doctor to be quadriplegic, the taxable income that is derived from circumstances resulting in the

individual becoming a quadriplegic is exempt. However, when taxable interest and dividend income is received jointly by a quadriplegic

and a spouse who is not a quadriplegic, or who is quadriplegic but the taxable income was not derived from circumstances resulting

in such spouse becoming quadriplegic, only one-half (1/2) of the jointly received income will be exempt from the tax. In such a case,

the spouse who is not quadriplegic or whose quadriplegic condition did not result in the income, is entitled to only a $1,250 exemption.

4. For tax years beginning January 1, 2012, any person 65 years of age or older having a total annual income derived from any and all sources

of $26,200 or less, or $37,000 or less for joint filers are completely exempt from the tax.

Taxable Income

1. Dividends from stock in:

a. All corporations.

b. Insurance companies not licensed to do business in Tennessee.

c. All holding companies, including those formed by banks, savings and loan associations, and insurance companies.

d. State-chartered banks outside Tennessee not doing business in Tennessee.

2. Income from investment trusts and mutual funds, including capital gain distributions, whether in cash or additional stock, is taxable.

Portion of income derived from bonds of U.S. Government and its agencies or bonds of the state of Tennessee and its counties

and municipalities is exempt.

3. Any distribution which does not qualify as a return of capital and is otherwise taxable. In order to qualify as a return of capital, it

must be shown that part of the shareholder's investment is being returned to the shareholder and that, as a result, the capital of the

company is actually reduced. The status or classification of the transaction for federal income tax purposes is not controlling.

4. Market value of stock in a corporation given by another corporation as a dividend in the regular course of business.

5. Distributions based on stock ownership to shareholders of an S corporation.

6. Interest from the following, if the instrument matures in more than six months from the date of issuance (except certificates of

deposit):

a. Bonds of states, counties, and municipalities outside Tennessee.

b. Bonds of foreign governments.

c. Church bonds.

d. Bonds, mortgages, deeds of trust, personal notes, promissory notes, installment notes, commercial paper, or other written

instruments, issued by any person, firm, corporation, joint-stock company, business, trust or partnership.

7. Interest and dividends you received as a beneficiary of a trust or estate located outside Tennessee, unless derived from a nontaxable

source.

8. Dividends or interest from money market funds which are not bank money market accounts.

RV-F1300201 (Rev. 11-12)

Form Inc 250 - Individual Income Tax Return Page 3

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