2017 Publication 3 P3

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Department of the Treasury
Internal Revenue Service
Publication 3
Cat. No. 46072M
Armed Forces'
Tax Guide
For use in preparing
2017 Returns
Get forms and other information faster and easier at:
•IRS.gov (English)
•IRS.gov/Spanish (Español)
•IRS.gov/Chinese (中文)
•IRS.gov/Korean (한국어)
•IRS.gov/Russian (Pусский)
•IRS.gov/Vietnamese (TiếngViệt)
Contents
What's New .............................. 2
Reminders ............................... 2
Introduction .............................. 3
Gross Income ............................. 4
Items Included in Gross Income .............. 4
Items Excluded From Gross Income ........... 4
Income Items of Special Interest ............. 5
Foreign Source Income .................... 7
Community Property ...................... 7
Domicile .............................. 8
Nevada, Washington, and California
Domestic Partners ..................... 8
Form W-2 .............................. 8
Adjustments to Income ..................... 9
Travel Expenses of Armed Forces Reservists .... 9
Individual Retirement Arrangements (IRAs) ..... 9
Moving Expenses ....................... 10
Income Exclusions for Armed Forces Members
in Combat Zones ...................... 12
Combat Pay Exclusion ..................... 12
How Much of My Combat Pay Can I
Exclude? ........................... 12
How Do I Report the Combat Pay Exclusion? ... 12
What Is Combat Pay? .................... 12
Combat Zone Defined .................... 13
Service Eligible for Combat Pay Exclusion ..... 14
Gain or Loss From Sale of Home ............. 14
Foreclosures ............................ 15
Itemized Deductions ...................... 15
Employee Business Expenses .............. 16
Repayments to Your Employer ............. 18
Credits ................................. 18
Child Tax Credit ........................ 18
Additional Child Tax Credit ................ 20
Earned Income Credit .................... 20
Credit for Excess Social Security Tax
Withheld ........................... 23
First-Time Homebuyer Credit Repayment ...... 24
Forgiveness of Decedent's Tax Liability ....... 24
Combat Zone Related Forgiveness .......... 25
Terrorist or Military Action Related
Forgiveness ......................... 25
How Do I Make a Claim for Tax Forgiveness? ... 25
Filing Returns ............................ 26
Where To File My Return .................. 27
When To File My Return .................. 27
When Is the Latest I Can Pay My Tax? ......... 27
Feb 20, 2018
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Extensions of Deadlines To File Your Tax
Return, To Pay Your Taxes, and for Other
Actions .............................. 28
Can I Get an Extension To File My Return If I
Am Not in a Combat Zone or a
Contingency Operation? ................ 28
Are There Filing, Tax Payment, and Other
Extensions Specifically for Those in a
Combat Zone or a Contingency
Operation? .......................... 28
Can I Get an Extension To Pay My Tax If I Am
Not in a Combat Zone or a Contingency
Operation? .......................... 30
Maximum Rate of Interest When There Is
Hardship ............................. 31
Tax Returns of Aliens ...................... 31
Resident Aliens ........................ 31
Nonresident Aliens ...................... 32
Dual-Status Aliens ...................... 32
Signing Returns .......................... 32
How To Get Tax Help ...................... 33
Index .................................. 36
What's New
Disaster tax relief. Disaster tax relief was enacted for
those impacted by certain Federally declared disasters.
The tax benefits provided by this relief include the follow-
ing:
An increased standard deduction based on your quali-
fied disaster losses. See the instructions for Form
1040, line 40 and the instructions for Schedule A
(Form 1040) for information on qualifying for and figur-
ing the increased standard deduction.
Election to use your 2016 earned income to figure
your 2017 earned income credit. For more informa-
tion, see the instructions for Form 1040, lines 66a and
66b; Form 1040A, lines 42a and 42b; or Form
1040EZ, lines 8a and 8b.
Election to use your 2016 earned income to figure
your 2017 additional child tax credit. See the Instruc-
tions for Schedule 8812 for more information on this
election.
For more information about tax benefits for individuals
affected by certain disasters, see Publication 976, Disas-
ter Relief.
Sinai Peninsula eligible for combat zone tax benefits.
Section 11026 of Public Law 115-97 designates the Sinai
Peninsula of Egypt as a qualified hazardous duty area that
is treated as if it were a combat zone, retroactively to June
9, 2015. See Sinai Peninsula, later.
Due date of return. File Form 1040 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.
Disability Severance Payments to Veterans. The
Combat-Injured Veterans Tax Fairness Act of 2016 gives
certain veterans who received disability severance pay-
ments after January 17, 1991, additional time to file claims
for credit or refund relating to overpayments attributable to
these payments. Veterans affected by this legislation
should receive a notice from the Department of Defense.
See Disability Severance Payments to Veterans, later.
Childless earned income credit (EIC). You may be
able to qualify for the EIC under the rules for taxpayers
without a qualifying child if you have a qualifying child for
the EIC who is claimed as a qualifying child by another
taxpayer. For more information, see Pub. 596.
Access your online account. You must authenticate
your identity. To securely log in to your federal tax ac-
count, go to IRS.gov/Account. View the amount you owe,
review 18 months of payment history, access online pay-
ment options, and create or modify an online payment
agreement. You can also access your tax records online.
Health coverage tax credit. You may have to repay ex-
cess advance payments of the health coverage tax credit
you received during your 2017 tax year. See the Instruc-
tions for Form 8885 for details.
Standard mileage rate. The standard mileage rate for
the cost of operating your car for business use in 2017 is
53.5 cents a mile. The standard mileage rate for operating
your car during 2017 to get medical care or to move is 17
cents a mile. The standard mileage rate for charitable use
of your vehicle is 14 cents a mile.
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 infor-
mation new users will need, go to IRS.gov/SecureAccess.
Reminders
Future developments. For the latest information about
developments related to Pub. 3, such as legislation enac-
ted after it was published, go to IRS.gov/Pub3.
Change of address. If you change your mailing address,
be sure to notify the IRS using Form 8822, Change of Ad-
dress. Mail it to the Internal Revenue Service Center for
your old address. (Addresses for the Service Centers are
on the back of the form.) Use Form 8822-B, Change of
Address or Responsible Party—Business, if you are
changing a business address.
Third party designee. You can check the “Yes” box in
the Third Party Designee area of your return to authorize
the IRS to discuss your return with your preparer, a friend,
a family member, or any other person you choose. This al-
lows the IRS to call the person you identified as your des-
ignee to answer any questions that may arise during the
processing of your tax return. It also allows your designee
to perform certain actions. See your income tax return in-
structions for details.
Photographs of missing children. The IRS is a proud
partner with the National Center for Missing & Exploited
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Children® (NCMEC). Photographs of missing children se-
lected by the Center may appear in this publication on pa-
ges that would otherwise be blank. You can help bring
these children home by looking at the photographs and
calling 1-800-THE-LOST (1-800-843-5678) if you recog-
nize a child.
Introduction
This publication covers the special tax situations of active
members of the U.S. Armed Forces.
For federal tax purposes, the U.S. Armed Forces in-
cludes commissioned officers, warrant officers, and enlis-
ted personnel in all regular and reserve units under control
of the Secretaries of the Defense, Army, Navy, and Air
Force. The U.S. Armed Forces also includes the Coast
Guard. The Public Health Service also can receive many
of the same tax benefits. The U.S. Armed Forces doesn't
include the U.S. Merchant Marine or the American Red
Cross.
Members serving in an area designated or treated as a
combat zone are granted special tax benefits. In the event
an area ceases to be a combat zone, the IRS will do its
best to notify you. Many of the relief provisions will end at
that time.
What isn't covered in this publication. This publication
doesn't cover military pensions or veterans' benefits (ex-
cept those discussed under Disability Severance Pay-
ments to Veterans, later) or give the basic tax rules that
apply to all taxpayers. For information on military pensions
or veterans' benefits, see Pub. 525, Taxable and Nontaxa-
ble Income. If you need the basic tax rules or information
on another subject not covered here, you can check our
other free publications. See Pub. 910, IRS Guide to Free
Tax Services, for a list and descriptions of the different tax
publications.
Comments and suggestions. We welcome your com-
ments about this publication and your suggestions for fu-
ture editions.
You can send us comments from IRS.gov/OrderForms.
Or you can write to:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it
would be helpful if you would include your daytime phone
number, including the area code, in your correspondence.
Although we cannot respond individually to each com-
ment received, we do appreciate your feedback and will
consider your comments as we revise our tax products.
Ordering forms and publications. Visit IRS.gov/
Forms to download forms and publications. Otherwise,
you can go to IRS.gov/OrderForms to order current and
prior-year forms and instructions. Your order should arrive
within 10 business days.
Tax questions. If you have a tax question not an-
swered by this publication, check IRS.gov and How To
Get Tax Help at the end of this publication.
Useful Items
You may want to see:
Publication
Tax Guide for U.S. Citizens and Resident Aliens
Abroad
Travel, Entertainment, Gift, and Car Expenses
Exemptions, Standard Deduction, and Filing
Information
Child and Dependent Care Expenses
Tax Withholding and Estimated Tax
U.S. Government Civilian Employees Stationed
Abroad
U.S. Tax Guide for Aliens
Moving Expenses
Selling Your Home
Taxable and Nontaxable Income
Residential Rental Property
Miscellaneous Deductions
Survivors, Executors, and Administrators
Contributions to Individual Retirement
Arrangements (IRAs)
Distributions from Individual Retirement
Arrangements (IRAs)
Earned Income Credit (EIC)
Tax Benefits for Education
Tax Relief for Victims of Terrorist Attacks
Form (and Instructions)
Amended U.S. Individual Income Tax Return
Statement of Person Claiming Refund Due a
Deceased Taxpayer
Foreign Earned Income
Foreign Earned Income Exclusion
Power of Attorney and Declaration of
Representative
Moving Expenses
Application for Automatic Extension of Time To
File U.S. Individual Income Tax Return
Change of Address
Change of Address or Responsible
Party—Business
Installment Agreement Request
54
463
501
503
505
516
519
521
523
525
527
529
559
590-A
590-B
596
970
3920
1040X
1310
2555
2555-EZ
2848
3903
4868
8822
8822-B
9465
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See How To Get Tax Help at the end of this publication for
information about getting IRS publications and forms.
Gross Income
Members of the Armed Forces receive many different
types of pay and allowances. Some are included in gross
income while others are excluded from gross income.
Items Included in Gross Income
You must report the items listed in Table 1 as gross in-
come on your tax return unless the pay is for service in a
combat zone. For pay for service in a combat zone, refer
to Table 2. The items in Table 1 are taxable. The list in Ta-
ble 1 isn't exclusive. Also see Income Items of Special In-
terest, later.
Items Excluded From Gross Income
Items in Table 2 aren't includible in your gross income
though you may have to report them on your income tax
Table 1. Items Included in Gross Income
These items are included in gross income, unless the pay is for service in a combat zone.
Basic pay • Active duty
• Attendance at a designated service school
• Back wages
• CONUS COLA
• Drills
• Reserve training
• Training duty
Special pay • Aviation career incentives
• Career sea
• Diving duty
• Foreign duty (outside the 48 contiguous states and the District of Columbia)
• Foreign language proficiency
• Hardship duty
• Hostile fire or imminent danger
• Medical and dental officers
• Nuclear-qualified officers
• Optometry
• Other Health Professional Special Pays (for example, nurse, physician assistant, social work, etc.)
• Pharmacy
• Special compensation for assistance with activities of daily living (SCAADL)
• Special duty assignment pay
• Veterinarian
• Voluntary Separation Incentive
Bonus pay • Career status
• Continuation pay
• Enlistment
• Officer
• Overseas extension
• Reenlistment
Incentive pay • Submarine
• Flight
• Hazardous duty
• High Altitude/Low Opening (HALO)
Other pay • Accrued leave
• High deployment per diem
• Personal money allowances paid to high-ranking officers
• Student loan repayment from programs such as the Department of Defense Educational Loan
Repayment Program when year's service (requirement) isn't attributable to a combat zone
In-kind military
benefits
• Personal use of a government-provided vehicle
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return. The list in Table 2 isn't exclusive. See your tax re-
turn instructions for more information on specific items.
Also see Income Items of Special Interest, later.
Combat pay. You may also be able to exclude pay for
service in a combat zone even though that pay would oth-
erwise be taxable. For information on the exclusion of pay
for service in a combat zone and other tax benefits for
combat zone participants, see Combat Pay Exclusion and
Are There Filing, Tax Payment, and Other Extensions
Specifically for Those in a Combat Zone or a Contingency
Operation, later.
Retroactive determination of nontaxable disa-
bility severance payments. The Combat-In-
jured Veterans Tax Fairness Act of 2016 gives
certain veterans who received disability severance pay-
ments after January 17, 1991, additional time to file claims
for credit or refund to recover overpayments attributable to
their disability severance payments. Veterans affected by
this legislation should receive a notice from the Depart-
ment of Defense reporting the amount of disability sever-
ance payments. You must file your claim by the later of 1
year after the date you received the notice from the De-
partment of Defense or the normal deadline for filing a
claim for refund or credit. The normal deadline is the later
of 3 years after filing the original return or 2 years after
paying the tax. See Disability Severance Payments to Vet-
erans, later.
Income Items of Special Interest
Death gratuity to a survivor. Any death gratuity paid to
a survivor of a member of the Armed Forces is excluded
from the survivor’s gross income.
Can I deduct expenses paid with my excluded basic
allowance for housing (BAH)? As noted in Table 2,
BAH is excluded from income. This doesn't prevent you
from deducting certain expenses paid for with your BAH.
You can still deduct mortgage interest and real estate
taxes on your home if you pay these expenses with your
BAH.
Differential wage payments. Differential wage pay-
ments are taxable. They aren't treated as combat pay
even if the individual was in a combat zone.
What are differential wage payments? Differential
wage payments are payments made by an employer
(other than the Armed Forces) to an individual. They are
paid for a period during which the individual performed
services in the uniformed services while on active duty for
a period of more than 30 days. These payments represent
all or a portion of the wages the individual would have re-
ceived from the employer if the individual had been per-
forming services for the employer during that period.
Military base realignment and closure benefits. Mili-
tary base realignment and closure benefits paid under the
Homeowners Assistance Program (HAP) generally are
excluded from income. However, for any property, the
TIP
sum of all your payments can't be more than the maximum
amount described in subsection (c) of 42 U.S.C. 3374 as
in effect on November 6, 2009. You must include in in-
come the excess over this maximum amount. For more in-
formation about the HAP, see http://hap.usace.army.mil/
Overview.html.
Qualified reservist distribution (QRD). The portion of
your QRD reported by your employer as wages on Form
W-2, Wage and Tax Statement, is included in your gross
income and is taxable. The amount reported should be
the QRD reduced by the after-tax contributions to your
health flexible spending arrangement. This amount is also
subject to employment taxes.
What is a QRD? A QRD is a distribution to an individ-
ual of all or part of the individual's balance in a cafeteria
plan or health flexible spending arrangement if:
The individual was a reservist who was ordered or
called to active duty for more than 179 days or for an
indefinite period, and
The distribution is made no sooner than the date the
reservist was ordered or called to active duty and no
later than the last day reimbursements could other-
wise be made under the arrangement for the plan year
which includes the date of the order or the call to duty.
Uniformed Services Traditional Thrift Savings Plan
(TSP) distributions. If you participate in the Uniformed
Services Traditional TSP and receive a distribution from
your account, the distribution is generally included in your
taxable income unless your contributions included tax-ex-
empt combat pay.
If your contributions included tax-exempt combat pay,
the part of the distribution attributable to those contribu-
tions is tax exempt. However, the earnings on the tax-ex-
empt portion of the distribution are taxable. The TSP will
provide a statement showing the taxable and nontaxable
portions of the distribution. For more information on TSP
distributions, see TSP-536 (01/2018), Important Tax Infor-
mation About Payments From Your TSP Account.
Roth Thrift Savings Plan (TSP) balance. Roth TSP
contributions are included in your income. They are af-
ter-tax contributions and are subject to the same contribu-
tion limits as the traditional TSP. Qualified distributions
from a Roth TSP aren't included in your income. For more
details, see Thrift Savings Plan in Part II of Pub. 721, Tax
Guide to U.S. Civil Service Retirement Benefits.
What is a Roth TSP balance? The TSP known as
the Roth TSP lets you invest in a designated Roth Ac-
count through a TSP. Your Roth TSP balance is the por-
tion of your TSP you have designated as Roth. To learn
more about Roth TSP balances, see TSP-536 (01/2018),
Important Tax Information About Payments From Your
TSP Account.
State bonus payments. A state bonus payment will be
treated as combat pay and may not be taxable if it is made
because of your current or former service in a combat
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zone. See Combat Zone Defined, later, for a list of desig-
nated combat zones.
What are state bonus payments? A state bonus
payment is a bonus payment made to you or to your de-
pendent(s) by a state (or a political subdivision of a state).
Disability Severance Payments to Veterans
Veterans discharged from military service due to medical
disability may receive a one-time lump sum severance
payment. If you received a disability severance payment
that was taxed to you, and either the amounts received
were by reason of a combat-related injury or the Depart-
ment of Veterans Affairs (VA) later determined that you
Table 2. Items Excluded From Gross Income
The exclusion for certain items applies whether the item is furnished in kind or is a reimbursement or allowance.
Combat pay • Compensation for active service while in a combat zone (See Combat Pay Exclusion, later)
Note. The exclusion for certain officers is limited. See Commissioned officers (other than
commissioned warrant officers), later.
Other pay • Defense counsel services
• Certain disability pension payments, including payments received for injuries incurred as a
direct result of a terrorist or military action
• Disability severance payments (See Disability Severance Payments to Veterans, later.)
• Group-term life insurance
• Professional education
• ROTC educational and subsistence allowances
• State bonus pay for service in a combat zone (See State bonus payments, later)
• Survivor and retirement protection plan premiums
• Uniform allowances
• Uniforms furnished to enlisted personnel
Death allowances • Burial services
• Death gratuity payments to eligible survivors
• Travel of dependents to burial site
Family allowances • Certain educational expenses for dependents
• Emergencies
• Evacuation to a place of safety
• Separation
Living allowances • BAH (Basic Allowance for Housing) (See also Can I deduct expenses paid with my excluded
basic allowance for housing (BAH), later)
• BAS (Basic Allowance for Subsistence)
• Housing and cost-of-living allowances abroad paid by the U.S. Government or by a foreign
government
• OHA (Overseas Housing Allowance)
Moving allowances • Dislocation
• Military base realignment and closure benefit (See Military base realignment and closure
benefits, later)
• Move-in housing
• Moving household and personal items
• Moving trailers or mobile homes
• Storage
• Temporary lodging and temporary lodging expenses
Travel allowances • Annual round trip for dependent students
• Leave between consecutive overseas tours
• Reassignment in a dependent restricted status
• Transportation for you or your dependents during ship overhaul or inactivation
• Per diem
In-kind military benefits • Dependent-care assistance program
• Legal assistance
• Medical/dental care
• Commissary/exchange discounts
• Space-available travel on government aircraft
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were entitled to receive disability compensation, your sev-
erance payment is not taxable and you can file a claim for
credit or refund using Form 1040X for the tax year in
which the disability severance payment was received and
included in income on your tax return.
For more information about amending prior year returns
to take advantage of this change, see the Instructions for
Form 1040X. For the latest information relating to Form
1040X, go to IRS.gov/Form1040X.
Retroactive determination of nontaxable disability
severance payments. The Combat-Injured Veterans
Tax Fairness Act of 2016 gives certain veterans who re-
ceived disability severance payments after January 17,
1991, additional time to file claims for credit or refund to
recover overpayments attributable to their disability sever-
ance payments. Veterans affected by this legislation
should receive a notice from the Department of Defense
(DoD) reporting the amount of disability severance pay-
ments.
How do I file a claim for a refund of an overpayment
attributable to my disability severance pay? Enter
“Veteran Disability Severance” or “St. Clair Claim” across
the top of Form 1040X, page 1, and attach documentation
showing the amount of and reason for your disability sev-
erance payment. Also, attach a copy of either the VA de-
termination letter confirming your disability or a determina-
tion that your injury or sickness was either incurred as a
direct result of armed conflict, while in extra-hazardous
service, or in simulated war exercises, or was caused by
an instrumentality of war. Documentation showing the
amount of and reason for your disability severance pay-
ment may include your Form DD214, a notice mailed to
you by the Department of Defense, or a letter from the De-
fense Finance and Accounting Services (DFAS) explain-
ing the severance payment at the time of the payment.
In addition to the documents listed above, Form
1310, Statement of Person Claiming Refund Due
a Deceased Taxpayer, may need to accompany
Form 1040X. See Step 4: Provide Form 1310, if required
under How Is Tax Forgiveness Claimed.
When must I file my claim? You must file your claim
by the later of 1 year after the date you received the notice
from the DoD or the normal deadline for filing a claim for
refund or credit. The normal deadline is the later of 3
years after filing the original return or 2 years after paying
the tax.
Where to file. Mail the completed Form 1040X and your
documents to the following address, regardless of where
you live:
Internal Revenue Service
333 W. Pershing Street, Stop 6503, P5
Kansas City, MO 64108
TIP
Foreign Source Income
What Is Foreign Source Income?
For U.S. citizens, foreign source income is income from
sources outside the United States. This section only dis-
cusses the tax consequences for foreign source income
of U.S. citizens.
Is My Foreign Source Income Taxable?
You must report all of your foreign source income on your
tax return, except for those amounts that U.S. law specifi-
cally allows you to exclude. This is true whether you re-
side inside or outside the United States and whether or
not you receive a Form W-2 or a Form 1099. This applies
to earned income (such as wages and tips) as well as un-
earned income (such as interest, dividends, capital gains,
pensions, rents, and royalties).
Some foreign income may be excluded, but these ex-
clusions aren't available for wages and salaries of military
and civilian employees of the U.S. Government. See more
on these exclusions in Foreign earned income exclusion
and American Samoa income exclusion below.
Foreign earned income exclusion. Certain taxpayers
can exclude income earned in foreign countries. For 2017,
this exclusion amount can be as much as $102,100. How-
ever, the foreign earned income exclusion doesn’t apply
to the wages and salaries of military and civilian employ-
ees of the U.S. Government. Employees of the U.S. Gov-
ernment include those who work at United States Armed
Forces exchanges, commissioned and noncommissioned
officers' messes, Armed Forces motion picture services,
and similar personnel. Other foreign income earned by
military personnel or their spouses may be eligible for the
foreign earned income exclusion. For more information on
the exclusion, see Pub. 54.
American Samoa income exclusion. Residents of
American Samoa may be able to exclude income from
American Samoa. However, this possession exclusion
doesn’t apply to wages and salaries of military and civilian
employees of the U.S. Government. If you need informa-
tion on this possession exclusion, see Pub. 570, Tax
Guide for Individuals With Income From U.S. Posses-
sions.
Community Property
The pay you earn as a member of the Armed Forces may
be subject to community property laws depending on your
marital status, the nature of the payment, and your domi-
cile. These laws may affect how much of your income is
included in your gross income for tax purposes. Commun-
ity property states include Arizona, California, Idaho, Loui-
siana, Nevada, New Mexico, Texas, Washington, and
Wisconsin.
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Marital Status
Community property rules apply to married persons
whose domicile during the tax year was in a community
property state. These rules may affect your tax liability if
you file separate returns or are divorced during the year.
Nature of the Payment
Active duty military pay is subject to community property
laws. Armed Forces retired or retainer pay may be sub-
ject to community property laws.
For more information on community property laws, see
Pub. 555, Community Property.
Domicile
Your domicile is the permanent legal home you intend to
use for an indefinite or unlimited period, and to which,
when absent, you intend to return. It isn't always where
you presently live.
Domicile of civilian spouse. If you are the civilian
spouse of an active duty U.S. military servicemember and
your domicile is the same as the servicemember's, you
may be able to keep your prior residence or domicile for
tax purposes when you accompany your spouse who relo-
cated to a new duty station. See Pub. 570 for more infor-
mation about this option, which is available under the Mili-
tary Spouses Residency Relief Act (MSRRA).
Nevada, Washington, and California
Domestic Partners
A registered domestic partner in Nevada, Washington, or
California generally must report half of his or her income
plus half of the income of his or her domestic partner. See
Form 8958 and Pub. 555.
Form W-2
What Information Can I Find on My Form
W-2?
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. Form W-2 also shows
other amounts that you may find important in box 12.
Form W-2 Reference Guide for Box 12 Codes
AUncollected social security or RRTA tax
on tips
BUncollected Medicare tax on tips (but not
Additional Medicare Tax)
CTaxable cost of group-term life
insurance over $50,000
DElective deferrals to a section 401(k)
cash or deferred arrangement plan
(including a SIMPLE 401(k) arrangement)
EElective deferrals under a section 403(b)
salary reduction agreement
FElective deferrals under a section
408(k)(6) salary reduction SEP
GElective deferrals and employer
contributions (including nonelective
deferrals) to a section 457(b) deferred
compensation plan
HElective deferrals to a section 501(c)(18)
(D) tax-exempt organization plan
JNontaxable sick pay
K20% excise tax on excess golden
parachute payments
LSubstantiated employee business
expense reimbursements
MUncollected social security or RRTA
tax on taxable cost of group-term life
insurance over $50,000 (former
employees only)
NUncollected Medicare tax on taxable
cost of group-term life insurance over
$50,000 (but not Additional Medicare
Tax) (former employees only)
PExcludable moving expense
reimbursements paid directly to employee
QNontaxable combat pay
REmployer contributions to an Archer MSA SEmployee salary reduction contributions
under a section 408(p) SIMPLE plan
TAdoption benefits
VIncome from exercise of nonstatutory
stock option(s)
WEmployer contributions (including
employee contributions through a
cafeteria plan) to an employee's health
savings account (HSA)
YDeferrals under a section 409A
nonqualified deferred compensation
plan
ZIncome under a nonqualified deferred
compensation plan that fails to satisfy
section 409A
AA Designated Roth contributions under a
section 401(k) plan
BB Designated Roth contributions under a
section 403(b) plan
DD Cost of employer-sponsored health
coverage
EE Designated Roth contributions under a
governmental section 457(b) plan
FF Permitted benefits under a qualified
small employer health reimbursement
arrangement
Note. For more information on these codes, see your Form W-2.
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What Do the Codes in Box 12 of Form W-2
Mean?
Box 12 shows amounts not listed in other places on the
form. The amounts shown in box 12 are generally prece-
ded by a code. A list of the codes used in box 12 is shown
next.
Adjustments to Income
Adjusted gross income is your total income minus certain
adjustments. The following adjustments are of particular
interest to members of the Armed Forces.
Travel Expenses of Armed Forces Reservists.
Individual Retirement Arrangements.
Moving Expenses.
Each of these adjustments is discussed below.
Travel Expenses of Armed Forces
Reservists
Are My Travel Expenses as a Reservist
Deductible?
If you are a member of a reserve component of the Armed
Forces and you travel more than 100 miles away from
home in connection with your performance of services as
a member of the reserves, you can deduct your unreim-
bursed travel expenses on your tax return. Include all un-
reimbursed expenses from the time you leave home until
the time you return home. See How To Report My Re-
serve-Related Travel Expenses below for information on
how to report these expenses on your tax return.
Am I a Member of a Reserve Component?
You are a member of a reserve component of the Armed
Forces if you are in:
The Army, Navy, Marine Corps, Air Force, or Coast
Guard Reserve;
The Army National Guard of the United States;
The Air National Guard of the United States; or
The Ready Reserve Corps of the Public Health Serv-
ice.
How To Report My Reserve-Related Travel
Expenses
If you have reserve-related travel that takes you more than
100 miles from home, you should first complete Form
2106, Employee Business Expenses, or Form 2106-EZ,
Unreimbursed Employee Business Expenses. Then enter
the amounts indicated below on Form 2106 (or Form
2106-EZ) and on Schedule A (Form 1040).
1. On Form 1040, line 24: enter the part of your expen-
ses, up to the federal rate, included on Form 2106,
line 10, or Form 2106-EZ, line 6, that is for reserve-re-
lated travel more than 100 miles from your home.
2. On Schedule A (Form 1040), line 21: enter as an
itemized deduction, the total on Form 2106, line 10, or
Form 2106-EZ, line 6, reduced by the amount in (1)
above.
For more information about this limit, see Per Diem and
Car Allowances in chapter 6 of Pub. 463.
Example. Captain Harris, a member of the Army Re-
serve, traveled to a location 220 miles from his home to
perform his work in the reserves in April 2017. He incurred
$1,535.40 of unreimbursed expenses consisting of
$235.40 for mileage (440 miles × 53.5 cents a mile), $300
for meals, and $1,000 for lodging. He also had other de-
ductible mileage expenses of $107 for five trips to a loca-
tion 20 miles from his home (5 x 40 miles x 53.5 cents a
mile). Only 50% of his meal expenses are deductible. He
shows his total deductible travel expenses of $1,492.40
($235.40 + $150 (50% of $300) + $1,000 + $107) on Form
2106, line 10. He enters the $1,385.40 ($235.40 + $150 +
$1,000) for travel over 100 miles from home on Form
1040, line 24. He then subtracts that $1,385.40 from
$1,492.40 (the amount on Form 2106, line 10) and gets
$107. He enters $107 on Schedule A (Form 1040),
line 21.
Individual Retirement Arrangements
(IRAs)
An IRA generally includes a traditional IRA, Roth IRA (in-
cluding a myRA), simplified employee pension (SEP) IRA,
and a savings incentive match plan for employees (SIM-
PLE) IRA.
Deductibility of Contributions to My IRA
Generally, you can deduct the lesser of the contributions
to your traditional IRA for the year or the general limit (or
spousal IRA limit, if applicable). However, if you or your
spouse was covered by an employer-maintained retire-
ment plan at any time during the year for which contribu-
tions were made, you may not be able to deduct all of the
contributions. The Form W-2 you or your spouse receives
from an employer has a box used to indicate whether you
were covered for the year. The “Retirement plan” box
should have a mark in it if you were covered.
For purposes of a deduction for contributions to a tradi-
tional IRA, Armed Forces members (including reservists
on active duty for more than 90 days during the year) are
considered covered by an employer-maintained retire-
ment plan. The "Retirement plan" box on your Form W-2
should have a mark in it. Your deduction for contributions
to a traditional IRA may be subject to a phase out. See
Limit if Covered by Employer Plan in Pub. 590-A for more
information.
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As a military person, do I get additional time to make
a contribution to my IRA? Individuals serving in the
U.S. Armed Forces or in support of the U.S. Armed
Forces in designated combat zones have additional time
to make a qualified retirement contribution to an IRA. For
more information on this extension of deadline provision,
see Are There Filing, Tax Payment, and Other Extensions
Specifically for Those in a Combat Zone or a Contingency
Operation, later. For more information on IRAs, see Pub.
590-A.
Is My Combat Pay Included in IRA
Calculations?
For IRA purposes, your compensation includes nontaxa-
ble combat pay. Even though you don't have to include
the combat pay in your gross income, you do include it in
your compensation when figuring the limits on contribu-
tions, and on deductions for contributions, to IRAs.
Treatment of Distributions (and
Repayments of Distributions) From an IRA
to Qualified Reservists
Is a qualified reservist distribution subject to the
10% additional tax? A qualified reservist distribution,
defined below, isn’t subject to the 10% additional tax on
early distributions from certain retirement plans.
What is a qualified reservist distribution? A distribu-
tion you receive is a qualified reservist distribution if the
following requirements are met.
You were ordered or called to active duty after Sep-
tember 11, 2001.
You were ordered or called to active duty for a period
of more than 179 days or for an indefinite period be-
cause you are a member of a reserve component (see
Am I a Member of a Reserve Component, earlier, un-
der Travel Expenses of Armed Forces Reservists).
The distribution is from an IRA or from amounts attrib-
utable to elective deferrals under a section 401(k) or
403(b) plan or a similar arrangement.
The distribution was made no earlier than the date of
the order or call to active duty and no later than the
close of the active duty period.
Can I repay amounts distributed from my IRA, sec-
tion 401(k) or 403(b) plan, or a similar arrangement?
You may be able to contribute (repay), to an IRA, amounts
equal to any qualified reservist distributions (defined ear-
lier) you received. You can make these repayment contri-
butions even if they would cause your total contributions
to the IRA to be more than the general limit on contribu-
tions. You make these repayment contributions to an IRA,
even if you received the qualified reservist distribution
from a section 401(k) or 403(b) plan or a similar arrange-
ment.
Is there a limit to the amount I can repay? Your
qualified reservist repayments can’t be more than your
qualified reservist distributions.
Is there a time limit for repaying? You can make
these repayment contributions up to and including the
date that is 2 years after your active duty period ends.
Can I deduct qualified reservist repayments? You
can’t deduct qualified reservist repayments.
Will the repayment affect my IRA deduction? The
repayment of qualified reservist distributions doesn’t affect
the amount you can deduct as an IRA contribution.
How do you report the repayment? If you repay a
qualified reservist distribution, include the amount of the
repayment with nondeductible contributions on line 1 of
Form 8606, Nondeductible IRAs.
Moving Expenses
You may be able to exclude from income the value of gov-
ernment-provided services and reimbursement. If you
weren't reimbursed, you may be able to deduct expenses
you incurred when you moved. We discuss both below.
Are Reimbursements, or the Value of Services Provi-
ded by the Government When I Move, Included in My
Income.
Which Moving Expenses Are Deductible and Which
Aren't.
To deduct moving expenses, you generally must meet
certain time and distance tests. But as a member of the
Armed Forces, you might not have to. See Do I Have To
Satisfy the Time and Distance Tests next. More details on
these tests are in Pub. 521. See How To Report Moving
Expenses, later, for details on how to report your moving
expense deduction.
Do I Have To Satisfy the Time and Distance
Tests?
If you are a member of the Armed Forces, you can deduct
your moving expenses without meeting the time and dis-
tance tests if you satisfy both of these criteria.
1. You are a member of the Armed Forces on active
duty.
2. You move because of a permanent change of station.
What constitutes a permanent change of station? A
permanent change of station includes:
A move from your home to your first post of active
duty,
A move from one permanent post of duty to another,
and
A move from your last post of duty to your home or to
a nearer point in the United States. The move must
occur within 1 year of ending your active duty or within
the period allowed under the Joint Travel Regulations.
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Are there additional considerations when a spouse
or dependent moves? If you are the spouse or depend-
ent of a member of the Armed Forces who deserts, is im-
prisoned, or dies, a permanent change of station for you
includes a move to:
The member's place of enlistment or induction;
Your, or the member's, home of record; or
A nearer point in the United States.
If the military moves you to or from a different location
than the member, the moves are treated as a single move
to your new main job location.
Are Reimbursements, or the Value of
Services Provided by the Government When
I Move, Included in My Income?
Don't include in your income the value of moving and stor-
age services provided by the government because of a
permanent change of station. Similarly, don't include in in-
come amounts received as a dislocation allowance, tem-
porary lodging expense, temporary lodging allowance, or
move-in housing allowance.
Generally, if the total reimbursements or allowances
that you receive from the government because of the
move are more than your actual moving expenses, the ex-
cess is included in your wages on Form W-2. However, if
any reimbursements or allowances (other than dislocation
allowances, temporary lodging expenses, temporary lodg-
ing allowances, or move-in housing allowances) exceed
the cost of moving and the excess isn't included in your
wages on Form W-2, the excess still must be included in
gross income on Form 1040, line 7.
If you must relocate and your spouse and dependents
move to or from a different location, don't include in in-
come reimbursements, allowances, or the value of moving
and storage services provided by the government to move
you and your spouse and dependents to and from the
separate locations.
Which Moving Expenses Are Deductible and
Which Aren't
How much of my moving expenses can I deduct? If
you move because of a permanent change of station, you
can deduct the reasonable unreimbursed expenses of
moving you and members of your household. See How To
Report Moving Expenses, later, for how to report this de-
duction.
A member of your household is anyone who has both
your former home and your new home as his or her main
home. It doesn't include a tenant or employee unless you
can claim that person as a dependent on your tax return.
Which moving expenses can I deduct? You can de-
duct expenses (if not reimbursed or furnished in kind) for:
Moving household goods and personal effects, and
Travel.
Moving household goods and personal effects. You
can deduct the expenses of moving your household
goods and personal effects, including expenses for haul-
ing a trailer, packing, crating, in-transit storage, and insur-
ance. You can't deduct expenses for moving furniture or
other goods you bought on the way from your old home to
your new home.
Storing and insuring household goods and per-
sonal effects. You can include only the cost of storing
and insuring your household goods and personal effects
within any period of 30 consecutive days after the day
these goods and effects are moved from your former
home and before they are delivered to your new home.
Travel. You can deduct the expenses of traveling (includ-
ing lodging within certain limitations, but not meals) from
your old home to your new home, including car expenses
and air fare. You can deduct as car expenses either:
Your actual out-of-pocket expenses such as gas and
oil, or
The standard mileage rate of 17 cents a mile.
You can add parking fees and tolls to the amount
claimed under either method. You can't deduct any ex-
penses for meals. You can't deduct the cost of unneces-
sary side trips or lavish and extravagant lodging.
Moving services and allowances provided by the
government. Don’t deduct any expenses for moving
services that were provided by the government. Also,
don’t deduct any expenses that were reimbursed by an al-
lowance you didn’t include in income.
Foreign Moves
A foreign move is a move from the United States or its
possessions to a foreign country or from one foreign
country to another foreign country. A move from a foreign
country to the United States or its possessions isn't a for-
eign move.
For a foreign move, the deductible moving expenses
described earlier are expanded to include the reasonable
expenses of:
Moving your household goods and personal effects to
and from storage, and
Storing these items for part or all of the time the new
job location remains your main job location. The new
job location must be outside the United States.
How To Report Moving Expenses
Figure moving expense deductions on Form 3903. Form
3903 will provide instructions on how to figure your deduc-
tion for qualified expenses that exceed your reimburse-
ments and allowances (including dislocation allowances,
temporary lodging expenses, temporary lodging allowan-
ces, or move-in housing allowances that are excluded
from gross income). Carry the moving expense deduction
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from Form 3903, line 5, to Form 1040, line 26. For more
information, see Pub. 521 and Form 3903.
Income Exclusions for Armed
Forces Members in Combat
Zones
Gross income does not include compensation you re-
ceived for active service in the Armed Forces for any
month during any part of which you served in a combat
zone or qualified hazardous duty area. The exclusion
available to you as a member of the Armed Forces may
depend on your rank.
Enlisted members, warrant officers, and commis-
sioned warrant officers. If you are an enlisted member,
warrant officer, or commissioned warrant officer, you can
exclude the following amounts from your income.
Active duty pay earned in any month you served in a
combat zone. See Combat Pay Exclusion below.
Imminent danger/hostile fire pay. See Serving in a
Combat Zone, later.
A reenlistment bonus if the voluntary extension or re-
enlistment occurs in a month you served in a combat
zone.
Pay for accrued leave earned in any month you
served in a combat zone. The Department of Defense
must determine that the unused leave was earned
during that period.
Pay received for duties as a member of the Armed
Forces in clubs, messes, post and station theaters,
and other nonappropriated fund activities. The pay
must be earned in a month you served in a combat
zone.
Awards for suggestions, inventions, or scientific ach-
ievements you are entitled to because of a submission
you made in a month you served in a combat zone.
Student loan repayments. If the entire year of service
required to earn the repayment was performed in a
combat zone, the entire repayment made because of
that year of service is excluded. If only part of that year
of service was performed in a combat zone, only part
of the repayment qualifies for exclusion. For example,
if you served in a combat zone for 5 months, 512 of
your repayment qualifies for exclusion.
Commissioned officers (other than commissioned
warrant officers). If you are a commissioned officer
(other than a commissioned warrant officer), you may ex-
clude part of your combat pay. There is a limit to the
amount of combat pay you can exclude. See Commis-
sioned officers (other than commissioned warrant officers)
under How Much of My Combat Pay Can I Exclude, later.
Combat Pay Exclusion
How Much of My Combat Pay Can I
Exclude?
Enlisted member, warrant officer, or commissioned
warrant officer. If you are an enlisted member, warrant
officer, or commissioned warrant officer, none of your
combat pay is included in your income for tax purposes.
Commissioned officers (other than commissioned
warrant officers). If you are a commissioned officer
(other than a commissioned warrant officer), there is a
limit to the amount of combat pay you can exclude. The
amount of your exclusion is limited to the highest rate of
enlisted pay (plus imminent danger/hostile fire pay you re-
ceived) for each month during any part of which you
served in a combat zone or were hospitalized as a result
of your service there. For 2017, the applicable amount is
$8,390.10 per month (that is, $8,165.10 for the highest en-
listed pay + $225 for imminent danger pay).
Earned income election. Though your combat pay is
excluded from income, you can elect to include it in in-
come in figuring your earned income credit. See Can I
treat my nontaxable combat pay as earned income? un-
der Earned Income Credit, later.
How Do I Report the Combat Pay
Exclusion?
Ordinarily, you don't have to do anything for this exclusion
to apply. The exclusion will be reflected on your Form
W-2. The wages shown in box 1 of your 2017 Form W-2
shouldn't include military pay excluded from your income
under the combat pay exclusion provisions. If it does, you
will need to get a corrected Form W-2 from your finance
office. You can't exclude as combat pay any wages shown
in box 1 of Form W-2. See also Disability Severance Pay-
ments to Veterans, later, for special rules relating to sever-
ance pay.
What Is Combat Pay?
Combat pay is pay received by a member of the U.S.
Armed Forces who serves in:
1. A combat zone as designated by the President in an
Executive order (see Combat Zone Defined, later);
2. A qualified hazardous duty area designated by Con-
gress while receiving hostile fire pay or imminent dan-
ger pay in accordance with 37 U.S.C. 310 and 37
U.S.C. 351 (see Serving in a Combat Zone, later); or
3. An area outside the combat zone or qualified hazard-
ous duty area when the Department of Defense
(DOD) certifies that such service is in direct support of
military operations in a combat zone or qualified haz-
ardous duty area, and the member receives hostile
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fire pay or imminent danger pay (see Serving outside
combat zone considered serving in a combat zone,
later).
The month for which you receive the pay must be a
month in which you either:
Served in a combat zone; or
Were hospitalized as a result of wounds, disease, or
injury incurred while serving in the combat zone.
You don't have to receive the excluded pay while you are
in a combat zone, are hospitalized, or in the same year
you served in a combat zone.
Partial month service is treated as full month of
service. If you serve in a combat zone for any part of one
or more days during a particular month, you are entitled to
a combat pay exclusion for that entire month.
Are my retirement pay and pensions treated as com-
bat pay? Retirement pay and pensions don't qualify for
the combat pay exclusion.
Combat Zone Defined
A combat zone is any area the President of the United
States designates by Executive order as an area in which
the U.S. Armed Forces are engaging or have engaged in
combat. An area usually becomes a combat zone and
ceases to be a combat zone on the dates the President
designates by Executive order. To date, the Afghanistan
area, the Kosovo area, and the Arabian Peninsula have
been designated as combat zones. Combat zone tax ben-
efits have been designated by Congress for the Sinai Pen-
insula of Egypt under certain circumstances. Each of the
combat zones and the Sinai Peninsula are discussed be-
low.
Serving outside combat zone considered serving
in a combat zone. Military service outside a combat
zone is considered to be performed in a combat zone if:
The Department of Defense designates that the serv-
ice is in direct support of military operations in the
combat zone, and
The service qualifies you for special military pay for
duty subject to hostile fire or imminent danger under
37 U.S.C. 310.
Military pay received for this service will qualify for the
combat pay exclusion if all of the requirements discussed
in Service Eligible for Combat Pay Exclusion, later, other
than service in a combat zone, are met and if the pay is
verifiable by reference to military pay records.
The Afghanistan area. By Executive Order No. 13239,
Afghanistan (and the airspace above) was designated as
a combat zone beginning September 19, 2001.
The following countries were certified by the Depart-
ment of Defense for combat zone tax benefits due to their
direct support of military operations in the Afghanistan
combat zone.
Jordan and Pakistan (as of September 19, 2001).
Philippines (from January 9, 2002, through September
30, 2015).
Djibouti (as of July 1, 2002).
Yemen (as of April 10, 2002).
Somalia and Syria (as of January 1, 2004).
Note. For the Philippines only, the personnel must have
deployed in conjunction with Operation Enduring Free-
dom or Operation Freedom Sentinel supporting military
operations in the Afghanistan combat zone.
The Kosovo area. By Executive Order No. 13119, the
following locations (including airspace above) were desig-
nated as a combat zone beginning March 24, 1999.
Federal Republic of Yugoslavia (Serbia/Montenegro).
Albania.
Kosovo.
The Adriatic Sea.
The Ionian Sea—north of the 39th parallel.
Note. The combat zone designation for Montenegro and
Kosovo (previously a province within Serbia) under Exec-
utive Order 13119 remains in force even though Montene-
gro and Kosovo have become independent nations since
EO 13119 was signed.
The Arabian Peninsula. By Executive Order No. 12744,
the following locations (and airspace above) were desig-
nated as a combat zone beginning January 17, 1991.
The Persian Gulf.
The Red Sea.
The Gulf of Oman.
The part of the Arabian Sea that is north of 10 degrees
north latitude and west of 68 degrees east longitude.
The Gulf of Aden.
The total land areas of Iraq, Kuwait, Saudi Arabia,
Oman, Bahrain, Qatar, and the United Arab Emirates.
The following countries were certified by the Depart-
ment of Defense for combat zone tax benefits due to their
direct support of military operations in the Arabian Penin-
sula combat zone.
Jordan (as of March 19, 2003).
Lebanon (2015–2020, unless terminated earlier).
Turkey east of 33.51 degrees East Longitude (as of
September 19, 2016).
Sinai Peninsula. Section 11026 of Public Law 115-97
designates the Sinai Peninsula of Egypt as a qualified
hazardous duty area that is treated as if it were a combat
zone. This designation generally applies for the period be-
ginning June 9, 2015. For more information about amend-
ing prior year returns to take advantage of the benefits as-
sociated with this designation, see the Instructions for
Form 1040X.
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Service Eligible for Combat Pay
Exclusion
As noted earlier, pay eligible for the combat pay exclusion
must have been received for a month in which you either
served in a combat zone or were hospitalized as a result
of wounds, disease, or injury incurred while serving in the
combat zone. We discuss these below. See also Serving
outside combat zone considered serving in a combat
zone, earlier, under Combat Zone Defined.
Serving in a Combat Zone
You are considered to be serving in a combat zone if you
are either assigned on official temporary duty to a combat
zone or you qualify for hostile fire/imminent danger pay
while in a combat zone.
Service in a combat zone includes any periods you are
absent from duty because of sickness, wounds, or leave.
If, as a result of serving in a combat zone, a person be-
comes a prisoner of war or is missing in action, that per-
son is considered to be serving in the combat zone so
long as he or she keeps that status for military pay purpo-
ses.
Hospitalization As a Result of Wounds,
Disease, or Injury Incurred While Serving in
a Combat Zone
Hospitalized while serving in a combat zone. If you
are hospitalized while serving in a combat zone, the
wound, disease, or injury causing the hospitalization will
be presumed to have been incurred while serving in the
combat zone unless there is clear evidence to the con-
trary.
Example. You are hospitalized for a specific disease
in a combat zone where you have been serving for 3
weeks, and the disease for which you are hospitalized has
an incubation period of 2 to 4 weeks. The disease is pre-
sumed to have been incurred while you were serving in
the combat zone. On the other hand, if the incubation pe-
riod of the disease is 1 year, the disease wouldn't have
been incurred while you were serving in the combat zone.
Hospitalized after leaving a combat zone. In some ca-
ses, the wound, disease, or injury may have been incurred
while you were serving in the combat zone, even though
you weren't hospitalized until after you left. In that case,
you can exclude military pay earned while you are hospi-
talized as a result of the wound, disease, or injury.
Example. You were hospitalized for a specific disease
3 weeks after you departed the combat zone. The incuba-
tion period of the disease is from 2 to 4 weeks. The dis-
ease is presumed to have been incurred while serving in
the combat zone.
Time limit on combat pay exclusion for pay received
while hospitalized. If you are hospitalized, you can't ex-
clude any military pay received for any month of service
that begins more than 2 years after the end of combat ac-
tivities in the combat zone. This pay won't be combat pay.
Nonqualifying Presence in a Combat
Zone
None of the following types of military service qualify as
service in a combat zone.
Presence in a combat zone while on leave from a duty
station located outside the combat zone.
Passage over or through a combat zone during a trip
between two points that are outside a combat zone.
Presence in a combat zone solely for your personal
convenience.
Gain or Loss From Sale of
Home
You may not have to pay tax on all or part of the gain from
the sale of your main home. Usually, your main home is
the one you live in most of the time. It can be a:
House,
Houseboat,
Mobile home,
Cooperative apartment, or
Condominium.
How much can you exclude? You generally can ex-
clude up to $250,000 of gain ($500,000, in most cases, if
married filing a joint return) realized on the sale or ex-
change of a main home in 2017. The exclusion is allowed
each time you sell or exchange a main home, but gener-
ally not more than once every 2 years.
What must you do to be eligible for the exclusion?
You will be eligible for the exclusion if, during the 5-year
period ending on the date of the sale, you:
Owned the home for at least 2 years (the ownership
test), and
Lived in the home as your main home for at least 2
years (the use test).
What happens if I don't meet the ownership and use
tests? If you don't meet the ownership and use tests due
to a move to a new permanent duty station, you can ex-
clude gain, but the maximum amount of gain you can ex-
clude will be reduced. See Pub. 523 for more details.
5-year test period can be suspended for members of
the Armed Forces. You can choose to have the 5-year
test period for ownership and use suspended during any
period you or your spouse serve on qualified official ex-
tended duty as a member of the Armed Forces. This
means that you may be able to meet the 2-year use test
even if, because of your service, you didn't actually live in
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your home for the required 2 years during the 5-year pe-
riod ending on the date of sale.
Example. David bought and moved into a home in
2009. He lived in it as his main home for 212 years. For the
next 6 years, he didn't live in it because he was on quali-
fied official extended duty with the Army. He then sold the
home at a gain in 2017. To meet the use test, David choo-
ses to suspend the 5-year test period for the 6 years he
was on qualifying official extended duty. This means he
can disregard those 6 years. Therefore, David's 5-year
test period consists of the 5 years before he went on qual-
ifying official extended duty. He meets the ownership and
use tests because he owned and lived in the home for 212
years during this test period.
Limits on period of suspension. The period of sus-
pension can't last more than 10 years. You can't suspend
the 5-year period for more than one property at a time.
You can revoke your choice to suspend the 5-year period
at any time.
Qualified official extended duty. You are on quali-
fied official extended duty if you serve on extended duty
either:
At a duty station at least 50 miles from your main
home, or
While you live in Government quarters under Govern-
ment orders.
You are on extended duty when you are called or or-
dered to active duty for a period of more than 90 days or
for an indefinite period.
What if the property was used for rental or business?
You may be able to exclude your gain from the sale of a
home that you have used as a rental property or for busi-
ness. However, you must meet the ownership and use
tests discussed in Pub. 523.
What if there were periods when I didn't use the
property as my main home and wasn’t on qualified
official extended duty? If the sale of your main home
results in a gain that is allocated to one or more period(s)
of nonqualified use, you can't exclude that gain from your
income.
Nonqualified use means any period after 2008 when
neither you nor your spouse (or your former spouse) used
the property as a main home, with certain exceptions. For
example, a period of nonqualified use doesn't include any
period (not to exceed a total of 10 years) during which you
or your spouse is serving on qualified official extended
duty, discussed above. You will be able to exclude the
gain attributable to the period during which you or your
spouse served on qualified official extended duty.
Are my losses deductible? You can't deduct a loss
from the sale of your main home.
More information. For more information, see Pub. 523.
Foreclosures
There may be tax consequences as a result of compensa-
tion payments for foreclosures.
Payments made for violations of the Servicemem-
bers Civil Relief Act (SCRA). All servicemembers who
received a settlement payment reported on a Form 1099
may need to report the amount on their tax return as in-
come. However, the tax treatment of settlement payments
will depend on the facts and circumstances as illustrated
below.
Lump-sum portion of settlement payment. Gener-
ally, you must include the lump-sum payment in gross in-
come. In limited circumstances, you may be able to ex-
clude part or all of the lump-sum payment from gross
income. For example, you may qualify to exclude part or
all of the payment from gross income if you can show that
the payment was made to reimburse specific nondeducti-
ble expenses (such as living expenses) you incurred be-
cause of the SCRA violation.
Interest payment on lump-sum portion of settle-
ment payment. You must include any interest on the
lump-sum portion of your settlement payment in your in-
come.
Lost equity portion of settlement payment. If you
lost your main home in foreclosure, you should treat the
lost equity payment as an additional amount you received
on the foreclosure of the home. You will have a gain on
the foreclosure only if the sum of the lost equity payment
and the value of the main home at foreclosure is more
than what you paid for the home. In many cases, this gain
may be excluded from income. For more information on
the rules for excluding all or part of any gain from the sale
(including a foreclosure) of a main home, see Pub. 523.
The rules that apply to a lost equity payment you
received for the foreclosure of a property that wasn't
your main home are different. To find rules for report-
ing gain or loss on the foreclosure of property that wasn't
your main home, see Pub. 544, Sales and Other Disposi-
tions of Assets.
Interest payment on lost equity portion of settle-
ment payment. You must include any interest on the lost
equity portion of your settlement payment in your income.
Itemized Deductions
To figure your taxable income, you must subtract either
your standard deduction or your itemized deductions from
adjusted gross income. For information on the standard
deduction, see Pub. 501.
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Itemized deductions are figured on Schedule A (Form
1040). This section discusses miscellaneous itemized de-
ductions for employee business expenses of particular in-
terest to members of the Armed Forces.
Employee Business Expenses.
–Travel Expenses.
–Transportation Expenses.
–Uniforms.
–Professional Dues.
–Education Expenses.
Repayments to Your Employer.
For information on other itemized deductions, see the
publications listed below. Also see the Instructions for
Schedule A (Form 1040).
Pub. 502, Medical and Dental Expenses.
Pub. 526, Charitable Contributions.
Pub. 547, Casualties, Disasters, and Thefts.
Pub. 550, Investment Income and Expenses.
You must reduce the total of most miscellaneous item-
ized deductions by 2% of your adjusted gross income. For
information on deductions that aren't subject to the 2%
limit, see Pub. 529.
Employee Business Expenses
Deductible employee business expenses generally are
miscellaneous itemized deductions subject to the 2% limit.
Certain employee business expenses are deductible as
adjustments to income. For information on many em-
ployee business expenses, see Pub. 463.
How do I claim an employee business expense?
Generally, you must file Form 2106, Employee Business
Expenses, or Form 2106-EZ, Unreimbursed Employee
Business Expenses, to claim these expenses. You don't
have to file Form 2106 or Form 2106-EZ if you are claim-
ing only unreimbursed expenses for uniforms, professio-
nal society dues, and work-related educational expenses
(all discussed later). You can deduct these expenses di-
rectly on Schedule A (Form 1040).
Can I claim the deduction if I received a reimburse-
ment? Generally, to receive advances, reimbursements,
or other allowances from the government, you must ade-
quately account for your expenses and return any excess
reimbursement. Your reimbursed expenses aren't deduc-
tible.
If your expenses are more than your reimbursement,
the excess expenses are deductible (subject to the 2%
limit) if you can prove them. You must file Form 2106 to
report these expenses.
You can use the shorter Form 2106-EZ if you meet all
three of the following conditions.
You are an employee deducting expenses related to
your job.
You weren't reimbursed by your employer for your ex-
penses. (Amounts included in box 1 of Form W-2
aren't considered reimbursements.)
If you claim car expenses, you use the standard mile-
age rate.
For 2017, the standard mileage rate is 53.5 cents
a mile for all business miles driven. This rate is
adjusted periodically.
Travel Expenses
You can deduct unreimbursed travel expenses only if they
are incurred while you are traveling away from home.
What if I am on a permanent duty assignment? If
you are a member of the U.S. Armed Forces on a perma-
nent duty assignment overseas, you aren't traveling away
from home. You can't deduct your expenses for meals
and lodging while at your permanent duty station. You
can't deduct these expenses even if you have to maintain
a home in the United States for your family members who
aren't allowed to accompany you overseas.
A sailor assigned to permanent duty aboard a ship that
has regular eating and living facilities has a home aboard
ship for travel expense purposes.
When am I considered to be away from home? Home
is your permanent duty station (which can be a ship or
base), regardless of where you or your family live. You are
away from home if you are away from your permanent
duty station substantially longer than an ordinary day's
work and you need to get sleep or rest to meet the de-
mands of your work while away from home.
What type of travel expenses can I deduct? To be de-
ductible, your travel expenses must be work related. You
can't deduct any expenses for personal travel, such as
visits to family while on furlough, leave, or liberty.
Examples of deductible travel expenses include the fol-
lowing.
Expenses for business-related meals (generally limi-
ted to 50% of your unreimbursed cost), lodging, taxi-
cabs, business telephone calls, tips, laundry, and dry
cleaning while you are away from home on temporary
duty or temporary additional duty.
Expenses of carrying out official business while on
“No Cost” orders.
Expenses of using your car while traveling away from
home overnight, but see the rules in chapter 4 of Pub.
463 to figure your car expense deduction.
You can't deduct any expenses for travel away
from home if the temporary assignment in a single
location is realistically expected to last (and does
in fact last) for more than 1 year. This rule may not apply if
you are participating in a federal crime investigation or
prosecution. For more information, see Pub. 463 and the
Form 2106 instructions.
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Transportation Expenses
These expenses include the unreimbursed ordinary and
necessary costs of:
Getting from one workplace to another while on duty
(for example, as a courier or to attend meetings) when
you aren't away from home,
Going to a business meeting away from your regular
workplace, and
Getting from your home to a temporary workplace
when you have one or more regular places of work if
you meet the conditions in What if I travel to a tempo-
rary work location, later.
These expenses include the costs of transportation by
air, bus, rail, taxi, and driving and maintaining your car.
Transportation expenses incurred while traveling away
from home are included with your travel expenses, dis-
cussed earlier.
What if I travel to a temporary work location? If you
have one or more regular places of business away from
your home and you commute to a temporary work location
in the same trade or business, you can deduct the expen-
ses of the daily round-trip transportation between your
home and the temporary location.
What makes employment at a work location tem-
porary? Generally, if your employment at a work location
is realistically expected to last (and does in fact last) for 1
year or less, the employment is temporary.
If your employment at a work location is realistically ex-
pected to last for more than 1 year or if there is no realistic
expectation that the employment will last for 1 year or
less, the employment isn't temporary, regardless of
whether it actually lasts for more than 1 year. If employ-
ment at a work location initially is realistically expected to
last for 1 year or less, but at some later date the employ-
ment is realistically expected to last more than 1 year, that
employment will be treated as temporary (unless there are
facts and circumstances that would indicate otherwise)
until your expectation changes.
If you don't have a regular place of business, but
you ordinarily work in the metropolitan area where
you live, you can deduct daily transportation ex-
penses between your home and a temporary work site
outside your metropolitan area. However, you can't de-
duct daily transportation costs between your home and
temporary work sites within your metropolitan area. These
are nondeductible commuting costs.
Can I deduct the expenses of commuting from my
home to my regular workplace? The expenses of get-
ting to and from your regular place of work (commuting)
aren't deductible.
What if I travel to an Armed Forces reserve unit
meeting? A meeting of an Armed Forces reserve unit is
a second place of business if the meeting is held on a day
on which you work at your regular job. You can deduct the
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expense of getting from one workplace to the other. You
usually can't deduct the expense if the reserve meeting is
held on a day on which you don't work at your regular job.
In this case, your transportation generally is a nondeducti-
ble commuting expense. However, you can deduct your
transportation expenses if the location of the meeting is
temporary and you have one or more regular places of
work.
If you ordinarily work in a particular metropolitan area
but not at any specific location and the reserve meeting is
held at a temporary location outside that metropolitan
area, you can deduct your transportation expenses. If you
travel away from home overnight to attend a guard or re-
serve meeting, you can deduct your travel expenses. If
you travel more than 100 miles to get to the meeting, you
may be able to take the expenses as an adjustment to in-
come on Form 1040, line 24. See Travel Expenses of
Armed Forces Reservists under Adjustments to Income,
earlier.
Uniforms
You usually can't deduct the expenses for uniform cost
and upkeep. Generally, you must wear uniforms when on
duty and you are allowed to wear them when off duty.
Can I ever deduct my uniform expenses? If military
regulations prohibit you from wearing certain uniforms
when off duty, you can deduct the cost and upkeep of the
uniforms, but you must reduce your expenses by any al-
lowance or reimbursement you receive.
Are there specific uniform expenses I can deduct?
You can deduct unreimbursed expenses for the cost and
upkeep of the following articles.
Military battle dress uniforms and utility uniforms that
you can't wear when off duty.
Articles not replacing regular clothing, including insig-
nia of rank, corps devices, epaulets, aiguillettes, and
swords.
Reservists' uniforms if you can wear the uniform only
while performing duties as a reservist.
Professional Dues
You can deduct unreimbursed dues paid to professional
societies directly related to your military position. How-
ever, you can't deduct amounts paid to an officers' club or
a noncommissioned officers' club.
Example. Lieutenant Margaret Allen, an electrical en-
gineer at Maxwell Air Force Base, can deduct professio-
nal dues paid to the American Society of Electrical Engi-
neers.
Education Expenses
You can deduct the unreimbursed costs of qualifying
work-related education. You can deduct these expenses
even if the education could lead to a degree. Qualifying
work-related education expenses are discussed below,
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but if you need more details on these expenses, see Pub.
970.
Is my education qualifying work-related education?
Qualifying work-related education is education that meets
at least one of the following two tests.
The education is required by your employer or the law
to keep your present salary, status, or job. The re-
quired education must serve a bona fide business pur-
pose of your employer.
The education maintains or improves skills needed in
your present work.
However, even if the education meets one or both of
the above tests, it isn't qualifying education if it:
Is needed to meet the minimum educational require-
ments of your present trade or business, or
Is part of a program of study that will qualify you for a
new trade or business.
Example 1. Lieutenant Colonel Mason has a degree
in financial management and is in charge of base finances
at her post of duty. She took an advanced finance course.
She already meets the minimum qualifications for her job.
By taking the course, she is improving skills in her current
position. The course doesn't qualify her for a new trade or
business. She can deduct educational expenses that are
more than the educational allowance she received.
Example 2. Major Williams worked in the military base
legal office as a legal intern. He was placed in excess
leave status by his employer to attend law school. He paid
all his educational expenses and wasn't reimbursed. After
obtaining his law degree, he passed the state bar exam
and worked as a judge advocate. His educational expen-
ses aren't deductible because the law degree qualified
him for a new trade or business, even though the educa-
tion maintained and improved his skills in his work.
Can I deduct travel expenses incurred to obtain edu-
cation? If you travel to obtain qualifying work-related ed-
ucation, you can deduct the costs of travel if the main pur-
pose of the trip is to obtain the education. Your deductible
travel costs will include meals (subject to the 50% limit)
and lodging.
You can't deduct the cost of travel that is itself a form of
education, even if it is directly related to your duties in
your work or business.
See Travel Expenses, earlier, for more information on
that topic.
Can I deduct transportation expenses incurred to ob-
tain education? If your work-related education qualifies
for a deduction, you can deduct the costs of transportation
to obtain that education. However, you can't deduct the
cost of services provided in kind, such as base-provided
transportation to or from class. Transportation expenses
include the actual costs of bus, subway, cab, or other
fares, as well as the costs of using your car.
See Transportation Expenses, earlier, for more infor-
mation on that topic.
Repayments to Your Employer
If you had to repay to your employer an amount that you
included in your income in an earlier year, you may be
able to deduct the repaid amount from your income for the
year in which you repaid it. Where you report the repay-
ment on your tax return will depend on the amount of the
repayment.
Repayment of $3,000 or less. If the amount you repaid
was $3,000 or less, deduct it from your income in the year
you repaid it. If you reported it as wages, deduct it as a
miscellaneous itemized deduction on Schedule A (Form
1040), line 23.
Repayment is over $3,000. If the amount you repaid
was more than $3,000, see Repayments in Pub. 525.
Credits
After you have figured your taxable income and tax liabil-
ity, you can determine if you are entitled to any tax credits.
This section discusses the Child Tax Credit, Additional
Child Tax Credit, Earned Income Credit, and Credit for Ex-
cess Social Security Tax Withheld. For information on
other credits, see your tax form instructions.
Child Tax Credit
Form 8862 required. If your 2016 child tax credit was de-
nied or reduced for any reason other than a math or cleri-
cal error, you must attach a completed Form 8862 to your
2017 tax return to claim the credit in 2017. See Form 8862
and its instructions for details.
If you take the child tax credit even though you
aren't eligible and it is determined that your error
is due to reckless or intentional disregard of the
child tax credit rules, you won't be allowed to take the
child tax credit or the additional child tax credit for 2 years
even if you are otherwise eligible to do so. If you fraudu-
lently take the child tax credit, you won't be allowed to
take either credit for 10 years. See the Instructions for
Form 8862 for more information. You also may have to
pay penalties.
The child tax credit is a credit that may reduce your tax
by as much as $1,000 for each of your qualifying children.
See How Much Can I Claim As a Child Tax Credit, later.
The additional child tax credit is a credit you may be
able to take if you aren't able to claim the full amount of
the child tax credit. The additional child tax credit is dis-
cussed later.
The child tax credit isn't the same as the credit for
child and dependent care expenses. See Pub.
503 for information on the credit for child and de-
pendent care expenses.
Can I claim the child tax credit if I don't have an SSN
or ITIN? If you don't have an SSN or ITIN by the due date
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of your 2017 return (including extensions), you can't claim
the child tax credit on either your original or an amended
2017 return, even if you later get an SSN (or ITIN). If you
apply for an ITIN on or before the due date of your 2017
return (including extensions) and the IRS issues you an
ITIN as a result of the application, the IRS will consider
your ITIN as issued on or before the due date of your re-
turn.
Is My Child a Qualifying Child?
Your child is a qualifying child for purposes of the child
tax credit if your child meets all seven of the following con-
ditions.
1. Is your son, daughter, stepchild, foster child, brother,
sister, stepbrother, stepsister, half brother, half sister,
or a descendant of any of them (for example, your
grandchild, niece, or nephew).
2. Was under age 17 at the end of 2017.
3. Didn't provide over half of his or her own support for
2017.
4. Lived with you for more than half of 2017 (but see Are
there exceptions to the time lived with you require-
ment, later).
5. Is claimed as a dependent on your return.
6. Doesn't file a joint return for the year (or files it only as
a claim for refund).
7. Was a U.S. citizen, a U.S. national, or a U.S. resident
alien. If the child was adopted, see Adopted child,
later. If the child has an ITIN, instead of an SSN or
ATIN, see Substantial Presence Test in the Instruc-
tions for Schedule 8812 (Form 1040), Child Tax
Credit, for additional requirements.
Your child must meet all seven conditions. If the child was
adopted, see Adopted child, later.
For each qualifying child, you must check the box on
Form 1040 or Form 1040A, line 6c, column (4).
Are there exceptions to the time lived with you re-
quirement? A child is considered to have lived with you
for all of 2017 if the child was born or died in 2017 and
your home was this child's home for the entire time he or
she was alive. This is true even if the child wasn't alive for
half of 2017. Temporary absences by you or the child for
special circumstances aren't counted. Special circumstan-
ces includes absences for school, vacation, business,
medical care, military service, or detention in a juvenile fa-
cility. These temporary absences count as time the child
lived with you.
There are also exceptions for kidnapped children and
children of divorced or separated parents. For details, see
Pub. 501.
What if my child is the qualifying child of more than
one person? A special rule applies if your qualifying
child is the qualifying child of more than one person. For
details, see Pub. 501.
Adopted child. Your adopted child is always treated as
your own child. An adopted child includes a child lawfully
placed with you for legal adoption. If you are a U.S. citizen
or U.S. national and your adopted child lived with you as a
member of your household all year, that child meets Con-
dition 7.
How Much Can I Claim As a Child Tax
Credit?
The maximum amount you can claim for the credit is
$1,000 for each qualifying child.
What factors affect the amount of my child tax
credit? You must reduce your child tax credit if either (1)
or (2) below applies.
1. The amount on Form 1040, line 47, or Form 1040A,
line 30, is less than the credit. If the amount is zero,
you can't take this credit because there is no tax to re-
duce. However, you may be able to take the addi-
tional child tax credit. See Additional Child Tax Credit,
later.
2. Your modified adjusted gross income (AGI), figured
as described later, is more than the amount shown
below for your filing status.
Married filing jointly — $110,000.
Single, head of household.
Married filing separately — $55,000.
Modified AGI. For purposes of the child tax credit,
your modified AGI is the amount on Form 1040, line 38, or
Form 1040A, line 22, plus the following amounts that may
apply to you.
Any amount excluded from income because of the ex-
clusion of income from Puerto Rico.
Any amount on line 45 or line 50 of Form 2555.
Any amount on line 18 of Form 2555-EZ.
Any amount on line 15 of Form 4563, Exclusion of In-
come for Bona Fide Residents of American Samoa.
If you don't have any of the above, your modified AGI is
the same as your AGI.
Claiming the Credit
To claim the child tax credit, you must file Form 1040 or
Form 1040A. For each qualifying child, you must check
the box on Form 1040 or Form 1040A, line 6c, column (4).
For more information on the child tax credit, see the in-
structions for Form 1040 or Form 1040A, especially the
Child Tax Credit Worksheet in those instructions. Also at-
tach Schedule 8812, if required.
You and each qualifying child must have the re-
quired taxpayer identification number. If you didn't
have an SSN (or ITIN) by the due date of your 2017 return
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(including extensions), you can't claim the child tax credit
on either your original or an amended 2017 return, even if
you later get an SSN (or ITIN). Also, no credit is allowed
on either your original or an amended 2017 return with re-
spect to a child who didn't have an SSN, ATIN, or ITIN by
the due date of your 2017 return (including extensions),
even if that child later gets one of those numbers.
If you apply for an ATIN or an ITIN on or before the due
date of your 2017 return (including extensions) and the
IRS issues you an ATIN or an ITIN as a result of the appli-
cation, the IRS will consider your ATIN or ITIN as issued
on or before the due date of your return.
Additional Child Tax Credit
You may be able to use your 2016 earned income
to figure your additional child tax credit if (a) your
2016 earned income is more than your 2017
earned income, and (b) your main home was located in
one of the Presidentially declared disaster areas eligible
for this relief on the specified date. For details, see Pub.
976.
If you elect to use your 2016 earned income on
line 4a, Schedule 8812 (Form 1040), to figure
your additional child tax credit, you must enter
your 2016 nontaxable combat pay on line 4b, Schedule
8812 (Form 1040), to figure the additional child tax credit.
If you aren't able to claim the full amount of the child tax
credit, you might be eligible for the additional child tax
credit. The additional child tax credit is for certain individu-
als who get less than the full amount of the child tax credit.
The additional child tax credit may give you a refund even
if you don't owe any tax.
You can't claim the additional child tax credit if you file
Form 2555 or Form 2555-EZ. The discussion above ex-
plains the child tax credit. For more information on the ad-
ditional child tax credit, see the instructions for Form 1040
or Form 1040A, and Schedule 8812.
Refunds for returns claiming the additional child
tax credit can’t be issued before mid-February
2018. This delay applies to the entire refund, not
just the portion associated with the additional child tax
credit.
Earned Income Credit
The earned income credit (EIC) is a credit for certain per-
sons who work. The credit reduces the amount of tax you
owe (if any). It may also give you a refund.
You must satisfy certain criteria in order to claim the
EIC. The criteria you must meet depends on whether you
have a qualifying child. Detailed information is provided in
Claiming the EIC if I Have a Qualifying Child and Claiming
the EIC if I Don't Have a Qualifying Child, later.
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If you claim the EIC and it is later disallowed, you
may have to complete an additional form if you
want to claim the credit in a following year. See
chapter 5 in Pub. 596 for more information, including how
to claim the EIC after disallowance.
Refunds for returns claiming the earned income
EIC can't be issued before mid-February 2018.
This delay applies to the entire refund, not just the
portion associated with the EIC.
Can I claim the EIC if I don't have a social security
number? If you don't have a social security number (an
SSN) by the due date of your 2017 return (including ex-
tensions), you can't claim the EIC on either your original or
an amended 2017 return, even if you later get an SSN.
Claiming the EIC if I Have a Qualifying Child
If you have a qualifying child (defined later), you must sat-
isfy all nine of the following rules to claim the earned in-
come credit.
1. You must have earned income (defined later).
2. Your earned income and adjusted gross income (AGI)
must each be less than:
a. $48,340 ($53,930 for married filing jointly) if you
have three or more qualifying children,
b. $45,007 ($50,597 for married filing jointly) if you
have two qualifying children, or
c. $39,617 ($45,207 for married filing jointly) if you
have one qualifying child.
3. Your filing status can't be married filing separately.
4. You generally can't be a qualifying child of another
person. If filing a joint return, your spouse also can't
be a qualifying child of another person.
5. Your qualifying child can't be used by more than one
person to claim the credit. If your qualifying child is the
qualifying child of more than one person, you must be
the person who can treat the child as a qualifying
child. If the other person can claim the child as a qual-
ifying child, you may be able to claim the EIC under
the rules for a taxpayer without a qualifying child. For
details, see Rule 9 in Pub. 596.
6. You can't file Form 2555 or Form 2555-EZ to exclude
income earned in foreign countries, or to deduct or
exclude a foreign housing amount. See Pub. 54 for
more information about these forms.
7. You must be a U.S. citizen or resident alien all year
unless:
a. You are married to a U.S. citizen or a resident
alien, and
b. You choose to be treated as a resident alien for
the entire year. If you need more information about
making this choice, see Resident Aliens, later.
CAUTION
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8. Your investment income must be $3,450 or less dur-
ing the year. For most people, investment income is
taxable interest and dividends, tax-exempt interest,
and capital gain net income.
9. You must have a valid social security number for
yourself, your spouse (if filing a joint return), and any
qualifying child.
How to report. If you satisfy all these rules, fill out
Schedule EIC (Form 1040), Earned Income Credit, and at-
tach it to either Form 1040 or Form 1040A.
Qualifying child. Your child is a qualifying child if your
child passes four tests and has a social security number
as required in Social security number of child, later. The
four tests are:
1. Relationship,
2. Age,
3. Residency, and
4. Joint return.
Each test, and the social security number requirement,
are discussed below.
Relationship test. In order to be classified as a quali-
fying child, your child must pass the relationship test. Your
child passes this test if the child is your:
Son, daughter, stepchild, foster child, or a descendant
of any of them (for example, your grandchild); or
Brother, sister, half brother, half sister, stepbrother,
stepsister, or a descendant of any of them (for exam-
ple, your niece or nephew).
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.
Your foster child, for the relationship test, is a child
placed with you by an authorized placement agency or by
judgment, decree, or other order of any court of compe-
tent jurisdiction. An authorized placement agency in-
cludes a state or local government agency. It also in-
cludes a tax-exempt organization licensed by a state. In
addition, it includes an Indian tribal government or an or-
ganization authorized by an Indian tribal government to
place Indian children.
Age test. In order to be classified as a qualifying child,
your child must pass the age test. A child passes the age
test if he or she is in at least one of the following catego-
ries.
1. Category 1. Under age 19 at the end of 2017 and
younger than you (or your spouse, if filing jointly).
2. Category 2. Under age 24 at the end of 2017, a
full-time student, and younger than you (or your
spouse, if filing jointly).
3. Category 3. Permanently and totally disabled at any
time during 2017, regardless of age.
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.
To qualify as a student, your child must be, during
some part of each of any 5 calendar months during the
calendar year:
1. A full-time student at a school that has a regular
teaching staff, course of study, and regular student
body at the school; or
2. A student taking a full-time, on-farm training course
given by a school described in (1), or a state, county,
or local government.
The 5 calendar months need not be consecutive.
A school can be an elementary school, junior or senior
high school, college, university, or technical, trade, or me-
chanical school. However, on-the-job training courses,
correspondence schools, and schools offering courses
only through the Internet don't count as schools for the
EIC.
Students who work in co-op jobs in private industry as
a part of a school's regular course of classroom and prac-
tical training are considered full-time students.
Permanently and totally disabled. Your child is per-
manently and totally disabled if both of the following apply.
1. He or she can't engage in any substantial gainful ac-
tivity because of a physical or mental condition.
2. 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. In order to be classified as a qualify-
ing child, your child must pass the residency test. A child
passes the residency test if he or she has lived with you in
the United States for more than half of 2017.
The United States includes the 50 states and the Dis-
trict of Columbia. It doesn't include Puerto Rico or U.S.
possessions such as Guam.
U.S. military personnel stationed outside the United
States on extended active duty are considered to live in
the United States during that duty period for purposes of
the EIC. Extended active duty means you are called or or-
dered to duty for an indefinite period or for a period of
more than 90 days. Once you begin serving your exten-
ded active duty, you are still considered to have been on
extended active duty even if you don't serve more than 90
days.
A child who was born or died in 2017 is treated as hav-
ing lived with you for more than half of 2017 if your home
was the child's home for more than half of the time he or
she was alive in 2017.
Count time that you or your child is away from home on
a temporary absence due to a special circumstance as
time the child lived with you.
A kidnapped child is treated as living with you for more
than half of the year if the child lived with you for more
than half the part of the year before the date of the kidnap-
ping. The child must be presumed by law enforcement au-
thorities to have been kidnapped by someone who isn't a
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member of your family or your child's family. This treat-
ment applies for all years until the child is returned. In the
year of the child’s return, the child must have lived with
you for more than half the part of the year following the
date of the child’s return. However, the last year this treat-
ment can apply is the earlier of:
1. The year there is a determination that the child is
dead, or
2. The year the child would have reached age 18.
If your qualifying child has been kidnapped and meets
these requirements, enter “KC,” instead of a number, on
line 6 of Schedule EIC.
Joint return test. In order to be classified as a quali-
fying child, your child must satisfy the joint return test.
There are two parts to this test. First, the child can't file a
joint return for the year (unless the joint return is filed only
as a claim for refund).
Second, if your child was married at the end of the
year, he or she can't be your qualifying child unless either:
1. You can claim the child's personal exemption, or
2. You can't claim the child's personal exemption be-
cause you gave that right to your child's other parent
under the Special rule for divorced or separated pa-
rents or parents who live apart described in chapter 2
of Pub. 596.
Social security number of child. In order to be clas-
sified as a qualifying child, your child must have a valid so-
cial security number (SSN) unless the child was born and
died in 2017. If a child didn't have an SSN by the due date
of your return (including extensions), you can't count that
child as a qualifying child in figuring the EIC on either your
original or an amended 2017 return, even if that child later
gets an SSN. You can't claim the EIC on the basis of a
qualifying child if:
1. Your qualifying child's SSN is missing from your tax
return or is incorrect;
2. Your qualifying child's social security card says “Not
valid for employment” and was issued for use in get-
ting a federally funded benefit; or
3. Instead of an SSN, your qualifying child has:
a. An individual taxpayer identification number
(ITIN), which is issued to a noncitizen who can't
get an SSN; or
b. An adoption taxpayer identification number
(ATIN), which is issued to adopting parents who
can't get an SSN for the child being adopted until
the adoption is final.
If you have more than one qualifying child and only one
has a valid SSN, you can claim the EIC only on the basis
of that one child.
More information. For more information, see Pub. 596.
Claiming the EIC if I Don't Have a Qualifying
Child
If you don't have a qualifying child, you can take the credit
if you satisfy all 11 of the following rules.
1. You must have earned income (defined later).
2. Your earned income and adjusted gross income must
each be less than $15,010 ($20,600 for married filing
jointly).
3. Your filing status can't be married filing separately.
4. You can't be a qualifying child of another person. If fil-
ing a joint return, your spouse also can't be a qualify-
ing child of another person.
5. You must be at least age 25 but under age 65 at the
end of the year. If filing a joint return, either you or
your spouse must be at least age 25 but under age 65
at the end of the year.
6. You can't be claimed as a dependent by anyone else
on that person's return. If filing a joint return, your
spouse also can't be claimed as a dependent by any-
one else on that person's return.
7. Your main home must be in the United States for
more than half the year. (U.S. military personnel sta-
tioned outside the United States on extended active
duty are considered to be living in the United States.)
8. You can't file Form 2555 or Form 2555-EZ.
9. You must be a U.S. citizen or resident alien all year
unless:
a. You are married to a U.S. citizen or a resident
alien, and
b. You choose to be treated as a resident alien for
the entire year.
10.
Your investment income must be $3,450 or less dur-
ing the year. For most people, investment income is
taxable interest and dividends, tax-exempt interest,
and capital gain net income.
11.
You (and your spouse, if filing a joint return) must
have a valid social security number.
How to report. If you satisfy all 11 of these rules, fill out
the EIC worksheet in your tax form instructions to figure
the amount of your credit.
More information. For more information, see Pub. 596.
How Do I Figure My Earned Income?
When figuring your earned income for the EIC, you must
know what counts as earned income as well as what
doesn't count as earned income. Both categories of in-
come are described below.
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You may be able to use your 2016 earned income
to figure your EIC if (a) your 2016 earned income
is more than your 2017 earned income, and (b)
your main home was located in one of the Presidentially
declared disaster areas eligible for this relief on the speci-
fied date. For details, see Pub. 976.
What is included in my earned income for the EIC?
For purposes of the earned income credit, earned income
includes the following.
Wages, salaries, tips, and other taxable employee
pay.
Net earnings from self-employment.
Gross income received as a statutory employee.
Nontaxable combat pay if you elect to include it in
earned income. See Can I treat my nontaxable com-
bat pay as earned income? next.
Can I treat my nontaxable combat pay as earned
income? You can elect to include your nontaxable com-
bat pay in earned income for the earned income credit. If
you make the election, you must include in earned income
all nontaxable combat pay you received. If you are filing a
joint return and both you and your spouse received non-
taxable combat pay, you can each make your own elec-
tion. The amount of your nontaxable combat pay should
be shown on your Form W-2 in box 12 with code Q. Elect-
ing to include nontaxable combat pay in earned income
may increase or decrease your EIC.
Figure the credit with and without your nontaxable com-
bat pay before making the election. Whether the election
increases or decreases your EIC depends on your total
earned income, filing status, and number of qualifying chil-
dren. If your earned income without your combat pay is
less than the amount shown below for your number of chil-
dren, you may benefit from electing to include your non-
taxable combat pay in earned income and you should fig-
ure the credit both ways. If your earned income without
your combat pay is equal to or more than these amounts,
you won't benefit from including your combat pay in your
earned income.
$6,670 if you have no qualifying children.
$10,000 if you have one qualifying child.
$14,040 if you have two or more qualifying children.
If you are using your 2016 earned income to fig-
ure your 2017 EIC and you elected to include
nontaxable combat pay, be sure to use 2016 non-
taxable combat pay.
The following examples illustrate the effect of including
nontaxable combat pay in earned income for the EIC.
Example 1—election increases the EIC. George
and Janice are married and will file a joint return. They
have one qualifying child. George was in the Army and
earned $15,000 ($5,000 taxable wages + $10,000 nontax-
able combat pay). Janice worked part of the year and
earned $2,000. Their taxable earned income and AGI are
both $7,000. George and Janice qualify for the earned
TIP
CAUTION
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income credit and fill out the Earned Income Credit (EIC)
Worksheet in the Form 1040A instructions and Sched-
ule EIC.
When they complete the worksheet without adding the
nontaxable combat pay to their earned income, they find
their credit to be $2,389. When they complete the EIC
worksheet with the nontaxable combat pay added to their
earned income, they find their credit to be $3,400. Be-
cause making the election will increase their EIC, they
elect to add the nontaxable combat pay to their earned in-
come for the EIC. They enter $3,400 on line 38a of their
Form 1040A and enter the amount of their nontaxable
combat pay on line 38b.
Example 2—election doesn't increase the EIC. The
facts are the same as in Example 1 except George had
nontaxable combat pay of $23,000. When George and
Janice add their nontaxable combat pay to their earned in-
come, they find their credit to be $2,368. Because the
credit they can get if they don't add the nontaxable com-
bat pay to their earned income is $2,389, they decide not
to make the election. They enter $2,389 on line 38a of
their Form 1040A.
What isn't earned income for the EIC? When figuring
your earned income for purposes of the earned income
credit, don't include any of these amounts.
Basic pay or special, bonus, or other incentive pay
that is subject to the combat pay exclusion (unless
you make the election described earlier in Can I treat
my nontaxable combat pay as earned income).
Basic Allowance for Housing (BAH).
Basic Allowance for Subsistence (BAS).
Any other nontaxable employee compensation.
Interest and dividends.
Social security and railroad retirement payments.
Certain workfare payments.
Pensions or annuities.
Veterans' benefits (including VA rehabilitation pay-
ments).
Workers' compensation.
Unemployment compensation.
Alimony and child support.
IRS Can Figure Your Credit for You
There are certain instructions you must follow before the
IRS can figure the credit for you. See IRS Will Figure the
EIC for You in Pub. 596.
Credit for Excess Social Security Tax
Withheld
Most employers must withhold social security tax from
your wages. If you worked for two or more employers in
2017 and you earned more than $127,200, you may be
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able to take the credit for excess social security tax with-
held. The maximum amount of social security tax that
should have been withheld for 2017 is $7,886.00. You are
eligible for the credit for excess social security tax with-
held only if you had more than one employer. You should
use the Credit for Excess Social Security Tax Withheld
Worksheet to figure your credit.
All wages are subject to Medicare tax withholding.
What if one of my employers withheld more than
$7,886.00? If any one employer withheld more than
$7,886.00 in social security taxes in 2017, you can't take a
credit for the excess social security tax withheld over
$7,886.00 by that employer. The employer should adjust
the tax for you. If the employer doesn't adjust the overcol-
lection, you can file a claim for refund using Form 843,
Claim for Refund and Request for Abatement.
Joint return. If you are filing a joint return, you can't add
the social security tax withheld from your spouse's wages
to the amount withheld from your wages in determining
whether you or your spouse had excess social security tax
withheld. You must figure the withholding separately for
you and your spouse to determine if either of you has ex-
cess withholding.
Credit for Excess Social Security Tax Withheld Work-
sheet. You can use the Credit for Excess Social Security
Tax Withheld Worksheet to figure your credit for excess
social security tax withheld on wages in 2017 only if you
had no wages in 2017 from employers that were railroads.
If you worked for a railroad employer in 2017, see Do I fig-
ure my credit differently if I am a railroad employee? next.
Do I figure my credit differently if I am a railroad
employee? If you work for a railroad employer, the dis-
cussion in this section doesn't apply to you. Your railroad
employer must withhold tier 1 railroad retirement (RRTA)
tax and tier 2 RRTA tax. See Excess Social Security or
Railroad Retirement Tax Withholding in chapter 3 of Pub.
505 for more information.
CAUTION
!
How to take the credit. For Form 1040 filers, enter the
credit on Form 1040, line 71. For Form 1040A filers, follow
the instructions for line 46.
First-Time Homebuyer Credit
Repayment
The first-time homebuyer credit wasn't available for
homes purchased after 2011. In 2011, this credit had al-
ready expired for most taxpayers. However, certain mem-
bers of the uniformed services and Foreign Service and
certain employees of the intelligence community could
claim the credit for homes purchased in 2011.
If you bought your home in 2008, you generally must
repay the credit over a 15-year period in 15 equal install-
ments. For your 2017 (and later) tax returns, the repay-
ment requirement will only apply to a home you bought in
2008.
For more information, see Form 5405, Repayment of
the First-Time Homebuyer Credit, and its instructions.
Forgiveness of Decedent's Tax
Liability
Tax liability can be forgiven if a member of the U.S. Armed
Forces dies:
While in active service in a combat zone (see Combat
Zone Related Forgiveness, later);
From wounds, disease, or other injury received in a
combat zone (see Combat Zone Related Forgiveness,
later); or
From wounds or injury incurred in a terrorist or military
action (see Terrorist or Military Action Related For-
giveness, later).
Credit for Excess Social Security Tax Withheld Worksheet
* If you received wages from a railroad employer, you can't use this worksheet. See Do I figure my credit differently if I am a railroad
employee? below.
** If you had only one employer, don't use this worksheet. Instead see What if one of my employers withheld more than $7,886.00?
below.
1. Add all social security tax withheld (but not more than $7,886.00 for each employer). Enter
the total here ................................................................. 1.
2. Enter any uncollected social security tax on wages, tips, or group-term life insurance
included in the total on Form 1040, line 58 ......................................... 2.
3. Add lines 1 and 2. If $7,886.00 or less, stop here. You can't take the credit ............. 3.
4. Social security tax limit ........................................................ 4. 7,886.00
5. Subtract line 4 from line 3. This is your excess social security tax withheld credit. Enter the
result here and on Form 1040, line 71 (or Form 1040A, line 46) ....................... 5.
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What does tax forgiveness mean? When there is tax
forgiveness, the following occurs.
If the tax being forgiven hasn't yet been paid, it may
not have to be paid.
If the tax being forgiven has been paid, the payment
may be refunded.
How Do I Make a Claim for Tax Forgiveness, later, pro-
vides details.
Combat Zone Related Forgiveness
Combat zone related forgiveness occurs when an individ-
ual meets both of the following criteria.
1. Is a member of the U.S. Armed Forces at death.
2. Dies while in active service in a combat zone, or at
any place from wounds, disease, or injury incurred
while in active service in a combat zone.
Except as limited in Deadline for Filing a Claim for Tax
Forgiveness, later, forgiveness applies to:
The tax year death occurred, and
Any earlier tax year ending on or after the first day the
member served in a combat zone in active service.
In addition, any unpaid taxes for years ending before
the member began service in a combat zone will be for-
given and any of those taxes that are paid after the date of
death will be refunded.
The beneficiary or trustee of the estate of a deceased
servicemember doesn't have to pay tax on any amount re-
ceived that would have been included (had the service-
member not died) in the deceased member's gross in-
come for the year of death.
Service outside combat zone. These rules also apply
to a member of the Armed Forces serving outside the
combat zone if the service:
Was in direct support of military operations in the
zone, and
Qualified the member for special military pay for duty
subject to hostile fire or imminent danger.
For a description of combat zone, see Combat Zone De-
fined, earlier, under Combat Pay Exclusion.
Missing status. The date of death for a member of the
Armed Forces who was in a missing status (missing in ac-
tion or prisoner of war) is the date his or her name is re-
moved from missing status for military pay purposes. This
is true even if death actually occurred earlier.
Terrorist or Military Action
Related Forgiveness
Terrorist or military action related forgiveness occurs
when an individual meets both of the following criteria.
Is a member of the U.S. Armed Forces at death.
Dies from wounds or injury incurred while a member
of the U.S. Armed Forces in a terrorist or military ac-
tion.
Except as limited in Deadline for Filing a Claim for Tax
Forgiveness, later, forgiveness applies to:
The tax year death occurred, and
Any earlier tax year in the period beginning with the
year before the year in which the wounds or injury oc-
curred.
A terrorist or military action is any terrorist activity primarily
directed against the United States or its allies or any mili-
tary action involving the U.S. Armed Forces and resulting
from violence or aggression against the United States or
its allies (or threat thereof).
Any multinational force in which the United States par-
ticipates is considered an ally of the United States.
The beneficiary or trustee of the estate of a deceased
servicemember doesn't have to pay tax on any amount re-
ceived that would have been included (had the service-
member not died) in the deceased member's gross in-
come for the year of death.
Example. Army Private John Kane died in 2017 of
wounds incurred in a terrorist attack in 2016. His income
tax liability is forgiven for all tax years from 2015 through
2017.
How Do I Make a Claim for Tax
Forgiveness?
How Is Tax Forgiveness Claimed?
If the decedent's tax liability is forgiven, the personal rep-
resentative should take the following steps.
Step 1: File the proper form. The form filed to claim the
tax forgiveness depends on whether a return has already
been filed for the tax year.
File a paper Form 1040 if a tax return hasn't been filed
for the tax year. Form W-2 must accompany the re-
turn.
File a paper Form 1040X if a tax return has been filed.
A separate paper Form 1040X must be filed for each
year in question.
Step 2: Properly identify the return. Properly identify
the return by providing the conflict or action on which the
claim for tax forgiveness is based.
All returns and claims must be identified by writing
“Iraqi Freedom—KIA,” “Enduring Freedom—KIA,”
“Kosovo Operation—KIA,” “Desert Storm—KIA,” or
“Former Yugoslavia—KIA” in bold letters on the top of
page 1 of the return or claim.
On Forms 1040 and 1040X, the phrase “Iraqi Free-
dom—KIA,” “Enduring Freedom—KIA,” “Kosovo Op-
eration—KIA,” “Desert Storm—KIA,” or “Former Yu-
goslavia—KIA” must be written on the line for total tax.
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If the individual was killed in a terrorist action, write
“KITA” on the front of the return and on the line for to-
tal tax.
Step 3: Include a Before and After Tax Forgiveness
Computation. Include an attachment with a computation
of the decedent's tax liability before any amount is for-
given and the amount that is to be forgiven. For computa-
tions when the decedent has filed joint returns or the
spouse has filed as married filing separately, see below.
Computation when the decedent filed joint re-
turns. Only the decedent's part of the joint income tax lia-
bility is eligible for the refund or tax forgiveness. To deter-
mine the decedent's part, the person filing the claim must:
1. Figure the income tax for which the decedent would
have been liable if a separate return had been filed,
2. Figure the income tax for which the spouse would
have been liable if a separate return had been filed,
and
3. Multiply the joint tax liability by a fraction. The top
number of the fraction is the amount in (1) above. The
bottom number of the fraction is the total of (1) and
(2).
The amount in (3) is the decedent's tax liability that is eligi-
ble for the refund or tax forgiveness. If you are unable to
complete this process, you should attach a statement of
all income and deductions, indicating the part that belongs
to each spouse. The IRS will determine the amount eligi-
ble for forgiveness.
Computation when in a community property state.
If the decedent's legal residence was in a community
property state and the spouse reported half the military
pay on a separate return, the spouse can get a refund of
taxes paid on his or her share of the pay for the years in-
volved. The forgiveness of unpaid tax on the military pay
also would apply to the half owed by the spouse for the
years involved. See Community Property, earlier, for a
discussion of community property.
Step 4: Provide Form 1310, if required. Form 1310,
Statement of Person Claiming Refund Due a Deceased
Taxpayer, must accompany the return unless the person
filing the return is:
A surviving spouse filing a joint return, or
A personal representative filing an original Form 1040
for the decedent and a court certificate showing the
appointment as personal representative is attached to
the return.
Step 5: Provide the death certification. The death
certification must come from the proper agency.
For military and civilian employees of the Department
of Defense, certification must be made by the Department
on DD Form 1300, Report Of Casualty.
For civilian employees of all other agencies who are kil-
led overseas, certification must be a letter signed by the
Director General of the Foreign Service, Department of
State, or his or her delegate. The certification must include
the deceased individual's name and social security num-
ber, the date of injury, the date of death, and a statement
that the individual died as the result of a terrorist or military
action. If the individual died as a result of a terrorist or mili-
tary action outside the United States, the statement also
must include the fact that the individual was a U.S. em-
ployee on the date of injury and on the date of death.
Can I get more time to file if I don't have enough tax
information by the deadline? If the death certification
required in Step 5 earlier has been received but there isn't
enough tax information to file a timely claim for refund, file
Form 1040X with Form 1310 by the deadline. Include a
statement saying that an amended claim will be filed as
soon as the necessary tax information is available. File the
amended Form 1040X as soon as you get the needed tax
information.
Who Can File a Claim for Tax Forgiveness?
If a member of the Armed Forces dies, a surviving spouse
or personal representative handles duties such as filing
any tax returns and claims for refund involving tax forgive-
ness. A personal representative can be an executor, ad-
ministrator, or anyone who is in charge of the decedent's
assets.
Deadline for Filing a Claim for Tax
Forgiveness
Whether a credit or refund is requested, generally, the pe-
riod for filing the claim is 3 years from the time the return
was filed or 2 years from the time the tax was paid, which-
ever is later. If the decedent's return was filed before it
was due, it will be considered filed on the regular due
date, usually April 15.
Extension of deadline when the death is com-
bat-zone related. If the death occurred in a combat zone
or from wounds, disease, or injury incurred in a combat
zone, the deadline for filing a claim for credit or refund is
extended using the rules discussed later under Are There
Filing, Tax Payment, and Other Extensions Specifically for
Those in a Combat Zone or a Contingency Operation.
Where To File a Return Requesting Tax
Forgiveness
A return requesting tax forgiveness must be filed at the fol-
lowing address.
Internal Revenue Service
333 W. Pershing, Stop 6503, P5
Kansas City, MO 64108
Filing Returns
This section discusses the procedures members of the
Armed Forces should follow when filing their federal in-
come tax returns. These same rules apply when the return
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is filed on behalf of a member of the Armed Forces, for ex-
ample, by a tax preparer or by a surviving spouse or per-
sonal representative. Special rules apply when filing re-
turns for those involved in a combat zone or a contingency
operation. See Are There Filing, Tax Payment, and Other
Extensions Specifically for Those in a Combat Zone or a
Contingency Operation, later.
What is my filing status if I am in a same-sex mar-
riage? For federal tax purposes, marriages of couples of
the same sex are treated the same as marriages of cou-
ples of the opposite sex. The term “spouse” includes an
individual married to a person of the same sex. You must
select married, or married filing separately, as your filing
status.
What is my filing status if I am in a registered domes-
tic partnership, civil union, or other similar relation-
ship? If you have entered into a registered domestic part-
nership, civil union, or other similar relationship that isn't
considered a marriage under state (or foreign) law, you
aren't considered married for federal tax purposes. You
must select single (or head of household if eligible) as
your filing status. For more details, see Pub. 501.
Where To File My Return
Electronic filing (e-filing) of your tax return. You are
encouraged to e-file your return. Eight in 10 taxpayers get
their refunds faster by using direct deposit and e-file. You
can e-file your 2017 federal income tax return free through
Free File if your 2017 adjusted gross income was $66,000
or less. Go to IRS.gov and click on the e-file icon for more
information on e-filing and Free File.
If you e-file your return, there is no need to mail it.
Paper returns. A tax return for Forgiveness of Dece-
dent's Tax Liability, discussed earlier, must be filed on pa-
per. For the address where those returns should be filed,
see Where To File a Return Requesting Tax Forgiveness
under Forgiveness of Decedent's Tax Liability, earlier.
If you choose to file a federal income tax return on paper
and you aren't claiming tax forgiveness on the return,
send your federal tax return to the Internal Revenue Serv-
ice Center for the place where you live. The instructions
for Forms 1040, 1040A, and 1040EZ give the addresses
for the service centers. If you are overseas and have an
APO or FPO address, file your return with the Internal
Revenue Service Center listed for an APO or FPO ad-
dress.
Example. Sgt. Kane, who is stationed in Maine but
whose permanent home address is in California, should
send her federal return to the service center for Maine.
When To File My Return
Most individuals must file their tax returns by the regular
due date. You may be eligible for an extension. Some ex-
tensions are automatic, some aren't. See Extensions of
Deadlines To File Your Tax Return, To Pay Your Taxes,
and for Other Actions, later.
What Is the Regular Due Date of My Return?
For calendar year taxpayers, the regular due date is April
15 of the following year. If April 15 falls on a Saturday,
Sunday, or legal holiday, your tax return is considered
timely filed if it is filed by the next business day that isn't a
Saturday, Sunday, or legal holiday. For 2017 tax returns,
the due date is April 17, 2018, because of the Emancipa-
tion Day holiday in the District of Columbia—even if you
don't live in the District of Columbia.
When Is the Latest I Can Pay
My Tax?
You always should pay your tax by the regular due date
for filing your return. An extension of time to file doesn't
mean you have an extension of time to pay any tax due.
You must estimate your tax due and pay it by the regular
due date for the return unless you qualify for one of the ex-
tensions described in Can I delay my payment of income
taxes next. You don't have to send in any payment of tax
due when you file Form 4868. However, if you pay the tax
after the regular due date, you will be charged interest
from the regular due date to the date the tax is paid. You
also may be charged a penalty for paying the tax late un-
less you have reasonable cause for not paying your tax
when due.
You can pay your taxes by authorizing an electronic
funds withdrawal from your checking or savings account.
For the various ways to electronically pay your taxes, see
your tax return instructions or visit IRS.gov/Payments. Or
you can mail a Form 1040-V with the payment. See Form
1040-V and its instructions at IRS.gov/Form1040V.
Can I delay my payment of income taxes? If you
are a member of the Armed Forces, you may qualify for an
extension of time to pay income tax that becomes due be-
fore or during your military service.
If you serve in a combat zone, have qualifying service
outside a combat zone, or are outside the United States in
a contingency operation, you may be eligible for the ex-
tension discussed in Are There Filing, Tax Payment, and
Other Extensions Specifically for Those in a Combat Zone
or a Contingency Operation, later.
If you don't meet the criteria detailed in Are There Fil-
ing, Tax Payment, and Other Extensions Specifically for
Those in a Combat Zone or a Contingency Operation, you
still may be able to extend the time to pay your tax. See
Can I Get an Extension To Pay My Tax If I Am Not in a
Combat Zone or a Contingency Operation, later.
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If you are unable to pay the tax owed by the end
of the extension period, you may want to ask the
IRS for an installment payment agreement that re-
flects your ability to pay the tax owed. To do that, go on-
line to IRS.gov/Payments, call, or download and file Form
9465, which is available at IRS.gov.
Extensions of Deadlines To
File Your Tax Return, To Pay
Your Taxes, and for Other
Actions
In this section, we discuss extensions of the deadlines for
tax return filing, tax payments, and other actions. We dis-
cuss extensions related to combat zone service and con-
tingency operations, and those not related to combat zone
service and contingency operations.
Can I Get an Extension To File My Return If I Am Not
in a Combat Zone or a Contingency Operation?
Are There Filing, Tax Payment, and Other Extensions
Specifically for Those in a Combat Zone or a Contin-
gency Operation?
Can I Get an Extension To Pay My Tax If I Am Not in a
Combat Zone or a Contingency Operation?
Can I Get an Extension To File My
Return If I Am Not in a Combat Zone
or a Contingency Operation?
If you aren't in a combat zone or a contingency operation,
you still may be eligible for an extension of time to file your
return. Different rules apply depending on whether you
live inside or outside the United States.
Getting an Extension If I Am Inside the
United States
If you are inside the United States, you can receive an au-
tomatic 6-month extension to file your return if you either
file Form 4868, or pay any part of your expected tax due
by credit or debit card, by the regular due date of your re-
turn. You can file Form 4868 electronically or on paper.
See Form 4868 for details.
The extension of time to file is automatic, and you won't
receive any notice of approval. However, your request for
an extension will be denied if it isn't made timely. The IRS
will inform you of the denial.
You can't use the automatic extension if you
choose to have the IRS figure the tax or you are
under a court order to file your return by the regu-
lar due date.
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CAUTION
!
Where on my return do I enter the amount paid with
my request for an extension? Enter the amount you
paid with your request for the extension on Form 1040,
line 70. On Form 1040A, include the amount in the total on
line 46. On Form 1040EZ, include the amount in the total
on line 9. To the left of Form 1040A, line 46 (or Form
1040EZ, line 9), enter “Form 4868” and show the amount
paid.
Getting an Extension If I Am Outside the
United States and Puerto Rico
If you are outside the United States and Puerto Rico, there
are two automatic extensions that apply to you and a third
extension that is discretionary.
The automatic 2-month extension. If you are a U.S.
citizen or resident alien, you qualify for an automatic
2-month extension of time without filing Form 4868 if ei-
ther of the following situations applies to you.
Situation 1. You live 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.
Situation 2. You are in military or naval service on an
assigned tour of duty outside the United States and
Puerto Rico for a period that includes the entire due
date of the return.
You will be charged interest on any amount not paid by
the regular due date until the date the tax is paid.
If you use this automatic extension, you must attach a
statement to the return showing that you are described in
Situation 1 or 2 above.
What if I'm filing a joint return? A married couple fil-
ing a joint return is given the automatic 2-month extension
if one of the spouses met the requirement under Situation
1 or Situation 2 above.
What if I'm filing as married filing separately? For
married persons filing separate returns, only the spouse
who satisfies the criteria in Situation 1 or Situation 2 quali-
fies for the automatic 2-month extension.
The additional automatic 4-month extension (Form
4868). You can request an additional 4-month extension
by filing Form 4868 by June 15, 2018, for a 2017 calen-
dar-year tax return. Check the box on line 8. This will ex-
tend your due date to October 15, 2018, if you are a cal-
endar-year taxpayer.
Are There Filing, Tax Payment, and
Other Extensions Specifically for
Those in a Combat Zone or a
Contingency Operation?
The postponements for filing, tax payment, and the other
actions listed in For Which Actions Are My Deadlines Ex-
tended, later, such as collection and examination actions,
are specifically for persons in the Armed Forces in combat
zones or contingency operations. As noted in some of our
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earlier discussions, these postponements are referred to
as “extensions of deadlines.”
What Type of Service Will Qualify Me for
These Extensions?
You will qualify for these extensions if either of the follow-
ing statements is true.
You serve in the Armed Forces in a combat zone or
you have qualifying service outside of a combat zone.
You serve in the Armed Forces on deployment out-
side the United States away from your permanent duty
station while participating in a contingency operation.
A contingency operation is a military operation that is
designated by the Secretary of Defense or results in
calling members of the uniformed services to active
duty (or retains them on active duty) during a war or a
national emergency declared by the President or Con-
gress.
See Combat Zone Defined, earlier, under Combat Pay
Exclusion, for the beginning dates for the Afghanistan
area combat zone, the Kosovo area combat zone, and the
Arabian Peninsula combat zone.
Do the extensions apply to those in missing status?
Time in a missing status (missing in action or prisoner of
war) counts as time in a combat zone or a contingency
operation.
Do the extensions apply to support personnel?
Deadlines are also extended if you are serving in a com-
bat zone or a contingency operation in support of the
Armed Forces. This applies to Red Cross personnel, ac-
credited correspondents, and civilian personnel acting un-
der the direction of the Armed Forces in support of those
forces.
Do the extensions apply to spouses? Spouses of indi-
viduals who served in a combat zone or contingency oper-
ation are entitled to the same deadline extensions with
two exceptions.
The extension doesn't apply to a spouse for any tax
year beginning more than 2 years after the date the
area ceases to be a combat zone or the operation
ceases to be a contingency operation.
The extension doesn't apply to a spouse for any pe-
riod the qualifying individual is hospitalized in the Uni-
ted States for injuries incurred in a combat zone or
contingency operation.
How Much Extra Time Do These Extensions
Give Me?
Your deadline for filing your return, paying your tax, claim-
ing a refund, and taking other actions with the IRS is ex-
tended in two steps.
First, your deadline is extended for 180 days after the
later of the following.
1. The last day you are in a combat zone, have qualify-
ing service outside of the combat zone, or serve in a
contingency operation (or the last day the area quali-
fies as a combat zone or the operation qualifies as a
contingency operation).
2. The last day of any continuous qualified hospitaliza-
tion (defined later) for injury from service in the com-
bat zone or contingency operation or while performing
qualifying service outside of the combat zone.
Second, in addition to the 180 days, your deadline is
extended by the number of days that were left for you to
take the action with the IRS when you entered a combat
zone (or began performing qualifying service outside the
combat zone) or began serving in a contingency opera-
tion. If you entered the combat zone or began serving in
the contingency operation before the period of time to
take the action began, your deadline is extended by the
entire period of time you have to take the action. For ex-
ample, you had 312 months (January 1–April 18, 2017) to
file your 2016 tax return. Any days of this 312 month period
that were left when you entered the combat zone (or the
entire 312 months if you entered the combat zone by Janu-
ary 1, 2017) are added to the 180 days when determining
the last day allowed for filing your 2016 tax return.
Example 1. Captain Margaret Jones, a resident of
Maryland, entered Saudi Arabia on December 1, 2015.
She remained there through March 31, 2017, when she
departed for the United States. She wasn't injured and
didn't return to the combat zone. The deadlines for filing
Captain Jones' 2015, 2016, and 2017 returns are figured
as follows.
The 2015 tax return. The deadline is January 14,
2018. This deadline is 289 days (180 plus 109) after
Captain Jones' last day in the combat zone (March 31,
2017). The 109 additional days are the number of
days in the 312 month filing period that were left when
she entered the combat zone (January 1–April 18,
2016).
The 2016 tax return. The deadline is January 13,
2018. The deadline is 288 days (180 plus 108) after
Captain Jones' last day in the combat zone (March 31,
2017). The 108 additional days are the number of
days in the 312 month filing period that were left when
she entered the combat zone (January 1–April 18,
2017).
The 2017 tax return. The deadline isn't extended be-
cause the 180-day extension period after March 31,
2017, plus the number of days left in the filing period
when she entered the combat zone (107) ends on
January 12, 2018, which is before the due date for her
2017 return (April 17, 2018).
When the due date for doing any act for tax pur-
poses—filing a return, paying taxes, etc.—falls on
a Saturday, Sunday, or legal holiday, the due date
is delayed until the next business day.
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Example 2. You generally have 3 years from April 17,
2017, to file a claim for refund against your timely filed
2016 tax return. This means that your claim normally must
be filed by April 17, 2020. However, if you serve in a com-
bat zone from November 1, 2019, through March 23,
2020, and aren't injured, your deadline for filing that claim
is extended 349 days (180 plus 169) after you leave the
combat zone. This extends your deadline to March 7,
2021. The 169 additional days are the number of days in
the 3-year period for filing the refund claim that were left
when you entered the combat zone on November 1 (No-
vember 1, 2019–April 17, 2020).
Qualified hospitalization. The hospitalization must be
the result of an injury received while serving in a combat
zone or a contingency operation. Qualified hospitalization
means:
Any hospitalization outside the United States, and
Up to 5 years of hospitalization in the United States.
Example. Petty Officer Leonard Brown's ship entered
the Persian Gulf on January 5, 2016. On February 15,
2016, Petty Officer Brown, a resident of Maryland, was in-
jured and was flown to a U.S. hospital. He remained in the
hospital through April 21, 2017. The deadlines for filing
Petty Officer Brown's 2015, 2016, and 2017 returns are
figured as follows.
The 2015 tax return. The deadline is January 31,
2018. Petty Officer Brown has 285 days (180 plus
105) after his last day in the hospital (April 21, 2017) to
file his 2015 return. The 105 additional days are the
number of days in the 312 month filing period that were
left when he entered the combat zone (January 5–
April 18, 2016).
The 2016 tax return. The deadline is February 5,
2018. Petty Officer Brown has 289 days (180 plus
109) after April 21, 2017, to file his 2016 tax return.
The 109 additional days are the number of days in the
2016 filing period that were left when he entered the
combat zone (January 1–April 18, 2017).
The 2017 tax return. The deadline isn't extended be-
cause the 180-day extension period after April 21,
2017, plus the number of days left in the filing period
when he entered the combat zone (107) ends on Feb-
ruary 2, 2018, which is before the due date for his
2017 return (April 17, 2018).
For Which Actions Are My Deadlines
Extended?
The actions to which this deadline extension provision ap-
plies include:
Filing any return of income, estate, gift, employment,
or excise tax;
Paying any income, estate, gift, employment, or ex-
cise tax;
Filing a petition with the Tax Court for redetermination
of a deficiency, or for review of a Tax Court decision;
Filing a claim for credit or refund of any tax;
Bringing suit for any claim for credit or refund;
Making a qualified retirement contribution to an IRA;
Allowing a credit or refund of any tax by the IRS;
Assessment of any tax by the IRS;
Giving or making any notice or demand by the IRS for
the payment of any tax, or for any liability for any tax;
Collection by the IRS of any tax due (Note. As a result
of section 309 of Public Law 114-113, the second bul-
let under How Much Extra Time Do These Extensions
Give Me, earlier, discussing continuous qualified hos-
pitalization doesn't apply when figuring the period for
the IRS to take collection actions for taxes, even those
assessed before the law was enacted); and
Bringing suit by the United States for any tax due.
If the IRS takes any actions covered by these provi-
sions or sends you a notice of examination before learning
that you are entitled to an extension of the deadline, con-
tact your legal assistance office. No penalties or interest
will be imposed for failure to file a return or pay taxes dur-
ing the extension period.
Other actions to which the deadline extension provision
applies are listed in Revenue Procedure 2007-56,
2007-34 I.R.B. 388, available at
IRS.gov/irb/2007-34_IRB/ar13.html.
Even though the deadline is extended, you may
want to file a return earlier to receive any refund
due. See Filing Returns, earlier.
Can I Get an Extension To Pay My Tax
If I Am Not in a Combat Zone or a
Contingency Operation?
If you are a member of the Armed Forces, you may qualify
for an extension to pay (that is, defer or delay payment of)
income tax that becomes due before or during your mili-
tary service. To qualify, you must:
Be performing military service, and
Notify the IRS that your ability to pay the income tax
has been materially affected by your military service
(defined later).
You will then be allowed up to 180 days after termina-
tion or release from military service to pay the tax. If you
pay the tax in full by the end of the extension period, you
won't be charged interest or penalty for that period.
This exception doesn't apply to the employee's share of
social security and Medicare taxes.
Military service. The term “military service” means the
period beginning on the date on which you enter military
service and ending on the date on which you are released
from military service or die while in military service. If you
are a member of the National Guard, your military service
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will include service meeting all three of the following crite-
ria:
under a call to active service authorized by the Presi-
dent or the Secretary of Defense
for a period of more than 30 consecutive days under
section 502(f) of title 32, United States Code,
for purposes of responding to a national emergency
declared by the President and supported by federal
funds.
How do I request an extension of time to pay my tax?
If you have a current payment agreement (such as an in-
stallment agreement), you must make a written request for
an extension of time to pay the tax to the IRS office where
you have the agreement.
If you don't have a current payment agreement, you
must wait until you receive a notice asking for payment
before you request an extension of time to pay the tax.
Once you have received a notice, you must make a writ-
ten request for an extension of time to pay the tax to the
IRS office that issued the notice.
In either case, your request must include:
Your name,
Social security number,
Monthly income and source of income before military
service,
Current monthly income,
Military rank,
Date you entered military service, and
Date you are eligible for discharge.
If possible, enclosing a copy of your orders would be help-
ful.
How will I know if my request for an extension of
time to pay the tax has been granted? The IRS will re-
view your request and advise you in writing of its decision.
Should you need further assistance, go to IRS.gov/uac/
Tax-Law-Questions for a wide selection of resources.
Maximum Rate of Interest
When There Is Hardship
Section 207 of the Servicemembers Civil Relief Act may
limit the maximum interest rate you can be charged to 6%
per year for obligations or liabilities incurred before your
entry into military service. The reduced rate will apply only
if your service materially affects your ability to pay. This
rate applies only to that interest charged during the period
of your military service.
To substantiate your claim for this reduced interest
rate, you must furnish the IRS a copy of your orders or re-
porting instructions that detail the call to military service.
You must do so no later than 180 days after the date of
your termination or release from military service.
Tax Returns of Aliens
For tax purposes, an alien is an individual who isn't a U.S.
citizen. An alien is in one of the three categories dis-
cussed below: resident, nonresident, or dual-status.
Placement in the correct category is crucial in determining
what income to report and what forms to file.
If you are an alien and in the Armed Forces. Most
members of the Armed Forces are U.S. citizens or resi-
dent aliens. Under peacetime enlistment rules, you gener-
ally can't enlist in the Armed Forces unless you are a citi-
zen or have been legally admitted to the United States for
permanent residence. If you are an alien enlistee in the
Armed Forces, you are probably a resident alien. If, under
an income tax treaty, you are considered a resident of a
foreign country, see your base legal officer. Other aliens
who are in the United States only because of military as-
signments and who have a home outside the United
States are nonresident aliens. Guam and Puerto Rico
have special rules. Residents of those areas should con-
tact their taxing authority with their questions.
If you have questions about your alien status or the
alien status of your dependents or spouse, you should
read the information in the following paragraphs and see
Pub. 519.
Resident Aliens
What are the tax consequences of being a resident
alien? Generally, resident aliens are taxed on their world-
wide income and file the same tax forms as U.S. citizens.
Am I a resident alien? You are considered a resident
alien of the United States for tax purposes if you meet ei-
ther the “green card test” or the “substantial presence test”
for the calendar year (January 1–December 31).
You may be able to choose to be treated as a U.S. resi-
dent for part of 2017 if you:
Met the substantial presence test for 2016;
Didn't meet either the green card test or the substan-
tial presence test for 2016 or 2017; and
Didn't choose to be treated as a resident for part of
2017.
See First-Year Choice in Pub. 519. These tests are ex-
plained in Pub. 519.
Treating nonresident alien spouse as resident alien.
A nonresident alien spouse can be treated as a resident
alien if all the following conditions are met.
One spouse is a U.S. citizen or resident alien at the
end of the tax year.
That spouse is married to the nonresident alien at the
end of the tax year.
You both choose to treat the nonresident alien spouse
as a resident alien.
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Making the choice. Both you and your spouse must
sign a statement and attach it to your joint return for the
first tax year for which the choice applies. Include in the
statement:
A declaration that one spouse was a nonresident alien
and the other was a U.S. citizen or resident alien on
the last day of the year;
A declaration that both spouses choose to be treated
as U.S. residents for the entire tax year; and
The name, address, and taxpayer identification num-
ber (social security number or individual taxpayer
identification number) of each spouse. If the nonresi-
dent alien spouse isn't eligible to get a social security
number, he or she should file Form W-7, Application
for IRS Individual Taxpayer Identification Number. For
more details regarding this statement and on making
this election, see Nonresident Spouse Treated as a
Resident in chapter 1 of Pub. 519.
Once you make this choice, the nonresident alien
spouse's worldwide income is subject to U.S. tax.
If the nonresident alien spouse has substantial
foreign income, there may be no advantage to making this
choice. Also, if you make this election, you may forfeit the
right to claim benefits otherwise available under a U.S. tax
treaty.
Ending the choice. Once you make this choice, it ap-
plies to all later years unless one of the following situa-
tions occurs.
You or your spouse revokes the choice.
You or your spouse dies.
You and your spouse become legally separated under
a decree of divorce or separate maintenance.
The IRS ends the choice because you or your spouse
kept inadequate records.
For specific details on these situations, see Pub. 519.
If the choice is ended for any of these reasons, neither
spouse can make the choice for any later year.
Choice not made. If you and your nonresident alien
spouse don't make this choice, the following restrictions
apply.
You can't file a joint return. You can file as married fil-
ing separately, or head of household if you qualify.
You can claim an exemption for your nonresident alien
spouse if he or she has no gross income for U.S. tax
purposes and isn't another taxpayer's dependent.
The nonresident alien spouse generally doesn't have
to file a federal income tax return if he or she had no
income from sources in the United States. If the
spouse has to file a return, see Nonresident Aliens be-
low. The nonresident alien spouse isn't eligible for the
earned income credit, the credit for the elderly or disa-
bled, or any education credit if he or she has to file a
return.
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Nonresident Aliens
Am I a nonresident alien? You are a nonresident alien if
you are an alien who doesn't meet the requirements dis-
cussed earlier for being classified as a resident alien.
What are the tax consequences of being a nonresi-
dent alien? If you are required to file a federal tax return,
you must file either Form 1040NR, U.S. Nonresident Alien
Income Tax Return, or Form 1040NR-EZ, U.S. Income
Tax Return for Certain Nonresident Aliens With No De-
pendents. See these forms’ instructions for information on
who must file and filing status.
If you are a nonresident alien, you generally must pay tax
on income from sources in the United States. Your income
from conducting a trade or business in the United States
is taxed at graduated U.S. tax rates. Other income from
U.S. sources is taxed at a flat 30% (or lower treaty) rate.
For example, dividends from a U.S. corporation paid to a
nonresident alien generally are subject to a 30% (or lower
treaty) rate.
Dual-Status Aliens
Am I a dual-status alien? You are a dual-status alien if
you are both a nonresident and resident alien during the
same tax year. This usually occurs in the year you arrive in
or depart from the United States.
What are the tax consequences of being a dual-sta-
tus alien? If you are a dual-status alien, you are taxed on
income from all sources for the part of the year you are a
resident alien. Generally, for the part of the year you are a
nonresident alien, you are taxed only on income from
sources in the United States. See the Instructions for
Form 1040NR for more information.
Signing Returns
Generally, you must sign your return. If you e-file your tax
return, you must validate your signature. To validate your
signature, you must use your prior-year adjusted gross in-
come or prior-year self-select PIN. See Electronic Return
Signatures in your tax return instructions.
If you are overseas or incapacitated, you can grant a
power of attorney to an agent to file and sign your return.
If you are acting on behalf of your spouse, see Do both
my spouse and I have to sign our joint return, later.
Form 2848, Power of Attorney and Declaration of
Representative. A power of attorney can be granted by
filing Form 2848. These forms are available at your near-
est legal assistance office. While other power of attorney
forms can be used, they must contain the information re-
quired by Form 2848.
In Part I of the form, you must indicate that you are
granting the power to sign the return, the tax form number,
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and the tax year for which the form is being filed. Attach
the power of attorney to the tax return.
Do both my spouse and I have to sign our joint re-
turn? Generally, joint returns must be signed by both
spouses. However, when a spouse is overseas, in a com-
bat zone, in a missing status, incapacitated, or deceased,
one spouse may sign for the other when the conditions
described below are met. Otherwise, a power of attorney
may be needed.
Spouse overseas. If one spouse is overseas on mili-
tary duty, there are two options when filing a joint return.
One spouse can prepare the return, sign it, and send it
to the other spouse to sign early enough so that it can
be filed by the due date; or
The spouse who expects to be overseas on the due
date of the return can file Form 2848 specifically des-
ignating that the spouse who remains in the United
States can sign the return for the absent spouse.
Spouse in combat zone. If your spouse is unable to
sign the return because he or she is serving in a combat
zone or is performing qualifying service outside of a com-
bat zone, and you don't have a power of attorney or other
statement, you can sign for your spouse. Attach a signed
statement to your return that explains that your spouse is
serving in a combat zone.
Spouse in missing status. The spouse of a member
of the Armed Forces who is in a missing status in a com-
bat zone can still file a joint return. A joint return can be
filed for any year beginning not more than 2 years after the
end of the combat zone activities. A joint return filed under
these conditions is valid even if it is later determined that
the missing spouse died before the year covered by the
return.
Spouse incapacitated. If your spouse can't sign be-
cause of disease or injury and he or she tells you to sign,
you can sign your spouse's name in the proper space on
the return, followed by the words “by [your name], Hus-
band (or Wife).” Be sure to sign your name in the space
provided for your signature. Attach a dated statement,
signed by you, to your return. The statement should in-
clude the form number of the return you are filing, the tax
year, the reason your spouse couldn't sign, and that your
spouse has agreed to your signing for him or her.
Spouse died during the year. If one spouse died
during the year and the surviving spouse didn't remarry
before the end of the year, the surviving spouse can file a
joint return for that year writing in the signature area “Filing
as surviving spouse.” If an executor or administrator has
been appointed, both he or she and the surviving spouse
must sign the return filed for the decedent.
How To Get Tax Help
Most military installations offer some degree of free tax
assistance at their installation legal assistance offices. If
your installation doesn't offer such assistance, check one
of the nearby installations and consider visiting an office
from another Service (for example, Air Force personnel
may want to visit an Army Legal Assistance Office or Tax
Center) or visit www.militaryonesource.mil/.
If you have questions about a tax issue, need help pre-
paring your tax return, or want to download free publica-
tions, forms, or instructions, go to IRS.gov and find resour-
ces that can help you right away.
Preparing and filing your tax return. Find free options
to prepare and file your return on IRS.gov or in your local
community if you qualify.
The Volunteer Income Tax Assistance (VITA) program
offers free tax help to people who generally make $54,000
or less, persons with disabilities, the elderly, and limi-
ted-English-speaking taxpayers who need help preparing
their own tax returns. The Tax Counseling for the Elderly
(TCE) program offers free tax help for all taxpayers, par-
ticularly those who are 60 years of age and older. TCE
volunteers specialize in answering questions about pen-
sions and retirement-related issues unique to seniors.
You can go to IRS.gov and click on the Filing tab to see
your options for preparing and filing your return which in-
clude the following.
Free File. Go to IRS.gov/FreeFile. See if you qualify
to use brand-name software to prepare and e-file your
federal tax return for free.
VITA. Go to IRS.gov/VITA, download the free IRS2Go
app, or call 1-800-906-9887 to find the nearest VITA
location for free tax preparation.
TCE. Go to IRS.gov/TCE, download the free IRS2Go
app, or call 1-888-227-7669 to find the nearest TCE
location for free tax preparation.
Getting answers to your tax law questions.
On IRS.gov get answers to your tax questions
anytime, anywhere.
Go to IRS.gov/Help or IRS.gov/LetUsHelp pages for a
variety of tools that will help you get answers to some
of the most common tax questions.
Go to IRS.gov/ITA for the Interactive Tax Assistant, a
tool that will ask you questions on a number of tax law
topics and provide answers. You can print the entire
interview and the final response for your records.
Go to IRS.gov/Pub17 to get Pub. 17, Your Federal In-
come Tax for Individuals, which features details on
tax-saving opportunities, 2017 tax changes, and thou-
sands of interactive links to help you find answers to
your questions. View it online in HTML or as a PDF or,
better yet, download it to your mobile device to enjoy
eBook features.
You also may be able to access tax law information in
your electronic filing software.
Getting tax forms and publications. Go to IRS.gov/
Forms to view, download, or print all of the forms and pub-
lications you may need. You also can download and view
popular tax publications and instructions (including the
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1040 instructions) on mobile devices as an eBook at no
charge. Or, you can go to IRS.gov/OrderForms to place
an order and have forms mailed to you within 10 business
days.
Using direct deposit. The fastest way to receive a tax
refund is to combine direct deposit and IRS e-file. Direct
deposit securely and electronically transfers your refund
directly into your financial account. Eight in 10 taxpayers
use direct deposit to receive their refund. IRS issues more
than 90% of refunds in less than 21 days.
Delayed refund for returns claiming certain credits.
Due to changes in the law, the IRS can’t issue refunds be-
fore February 15, 2018, for returns that claim the earned
income credit (EIC) or the additional child tax credit
(ACTC). This applies to the entire refund, not just the por-
tion associated with these credits.
Getting a transcript or copy of a return. The quickest
way to get a copy of your tax transcript is to go to IRS.gov/
Transcripts. Click on either "Get Transcript Online" or "Get
Transcript by Mail" to order a copy of your transcript. If
you prefer, you can:
Order your transcript by calling 1-800-908-9946.
Mail Form 4506-T or Form 4506T-EZ (both available
on IRS.gov).
Using online tools to help prepare your return. Go to
IRS.gov/Tools for the following.
The Earned Income Tax Credit Assistant (IRS.gov/
EIC) determines if you are eligible for the EIC.
The Online EIN Application (IRS.gov/EIN) helps you
get an employer identification number.
The IRS Withholding Calculator (IRS.gov/W4APP) es-
timates the amount you should have withheld from
your paycheck for federal income tax purposes.
The First Time Homebuyer Credit Account Look-up
(IRS.gov/Homebuyer) tool provides information on
your repayments and account balance.
The Sales Tax Deduction Calculator (IRS.gov/
SalesTax) figures the amount you can claim if you
itemize deductions on Schedule A (Form 1040),
choose not to claim state and local income taxes, and
you didn’t save your receipts showing the sales tax
you paid.
For help with the alternative minimum tax, go to
IRS.gov/AMT.
Resolving tax-related identity theft issues.
The IRS doesn’t initiate contact with taxpayers by
email or telephone to request personal or financial in-
formation. This includes any type of electronic com-
munication, such as text messages and social media
channels.
Go to IRS.gov/IDProtection for information and vid-
eos.
If your SSN has been lost or stolen or you suspect you
are a victim of tax-related identity theft, visit
IRS.gov/ID to learn what steps you should take.
Checking on the status of your refund.
Go to IRS.gov/Refunds.
Due to changes in the law, the IRS can’t issue refunds
before February 15, 2018, for returns that claim the
EIC or the ACTC. This applies to the entire refund, not
just the portion associated with these credits.
Download the official IRS2Go app to your mobile de-
vice to check your refund status.
Call the automated refund hotline at 1-800-829-1954.
Making a tax payment. The IRS uses the latest encryp-
tion technology to ensure your electronic payments are
safe and secure. You can make electronic payments on-
line, by phone, and from a mobile device using the
IRS2Go app. Paying electronically is quick, easy, and
faster than mailing in a check or money order. Go to
IRS.gov/Payments to make a payment using any of the
following options.
IRS Direct Pay: Pay your individual tax bill or estima-
ted tax payment directly from your checking or sav-
ings account at no cost to you.
Debit or credit card: Choose an approved payment
processor to pay online, by phone, and by mobile de-
vice.
Electronic Funds Withdrawal: Offered only when fil-
ing your federal taxes using tax preparation software
or through a tax professional.
Electronic Federal Tax Payment System: Best op-
tion for businesses. Enrollment is required.
Check or money order: Mail your payment to the ad-
dress listed on the notice or instructions.
Cash: If cash is your only option, you may be able to
pay your taxes at a participating retail store.
What if I can’t pay now? Go to IRS.gov/Payments for
more information about your options.
Apply for an online payment agreement (IRS.gov/
OPA) to meet your tax obligation in monthly install-
ments if you can’t pay your taxes in full today. Once
you complete the online process, you will receive im-
mediate notification of whether your agreement has
been approved.
Use the Offer in Compromise Pre-Qualifier (IRS.gov/
OIC) to see if you can settle your tax debt for less than
the full amount you owe.
Checking the status of an amended return. Go to
IRS.gov and click on Where’s My Amended Return?
(IRS.gov/WMAR) under the “Tools” bar to track the status
of Form 1040X amended returns. Please note that it can
take up to 3 weeks from the date you mailed your amen-
ded return for it to show up in our system and processing
it can take up to 16 weeks.
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Understanding an IRS notice or letter. Go to IRS.gov/
Notices to find additional information about responding to
an IRS notice or letter.
Contacting your local IRS office. Keep in mind, many
questions can be resolved on IRS.gov without visiting an
IRS Tax Assistance Center (TAC). Go to IRS.gov/
LetUsHelp for the topics people ask about most. If you still
need help, IRS TACs provide tax help when a tax issue
can’t be handled online or by phone. All TACs now pro-
vide service by appointment so you’ll know in advance
that you can get the service you need without waiting. Be-
fore you visit, go to IRS.gov/TACLocator to find the near-
est TAC, check hours, available services, and appoint-
ment options. Or, on the IRS2Go app, under the Stay
Connected tab, choose the Contact Us option and click on
“Local Offices.”
Watching IRS videos. The IRS Video portal
(IRSvideos.gov) contains video and audio presentations
for individuals, small businesses, and tax professionals.
Getting tax information in other languages. For tax-
payers whose native language isn’t English, we have the
following resources available. Taxpayers can find informa-
tion on IRS.gov in the following languages.
Spanish (IRS.gov/Spanish).
Chinese (IRS.gov/Chinese).
Vietnamese (IRS.gov/Vietnamese).
Korean (IRS.gov/Korean).
Russian (IRS.gov/Russian).
The IRS TACs provide over-the-phone interpreter serv-
ice in over 170 languages, and the service is available
free to taxpayers.
The Taxpayer Advocate Service Is
Here To Help You
What is the Taxpayer Advocate Service?
The Taxpayer Advocate Service (TAS) is an independ-
ent organization within the IRS that helps taxpayers and
protects taxpayer rights. Our job is to ensure that every
taxpayer is treated fairly and that you know and under-
stand your rights under the Taxpayer Bill of Rights.
What Can the Taxpayer Advocate Service
Do For You?
We can help you resolve problems that you can’t resolve
with the IRS. And our service is free. If you qualify for our
assistance, you will be assigned to one advocate who will
work with you throughout the process and will do every-
thing possible to resolve your issue. TAS can help you if:
Your problem is causing financial difficulty for you,
your family, or your business,
You face (or your business is facing) an immediate
threat of adverse action, or
You’ve tried repeatedly to contact the IRS but no one
has responded, or the IRS hasn’t responded by the
date promised.
How Can You Reach Us?
We have offices in every state, the District of Columbia,
and Puerto Rico. Your local advocate’s number is at
TaxpayerAdvocate.IRS.gov, at IRS.gov/Advocate, and in
your local directory. You can also call us at
1-877-777-4778.
How Can You Learn About Your Taxpayer
Rights?
The Taxpayer Bill of Rights describes 10 basic rights that
all taxpayers have when dealing with the IRS. Our Tax
Toolkit at TaxpayerAdvocate.IRS.gov can help you under-
stand what these rights mean to you and how they apply.
These are your rights. Know them. Use them.
How Else Does the Taxpayer Advocate
Service Help Taxpayers?
TAS works to resolve large-scale problems that affect
many taxpayers. If you know of one of these broad issues,
please report it to us at IRS.gov/SAMS.
Low Income Taxpayer Clinics
Low Income Taxpayer Clinics (LITCs) serve individuals
whose income is below a certain level and need to resolve
tax problems such as audits, appeals, and tax collection
disputes. Some clinics can provide information about tax-
payer rights and responsibilities in different languages for
individuals who speak English as a second language. To
find a clinic near you, visit IRS.gov/LITC or see IRS Publi-
cation 4134, Low Income Taxpayer Clinic List.
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To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
Index
A
Additional child tax credit 20
Adoption:
Child tax credit 19
Afghanistan 13
Aliens 31
Arabian Peninsula 13
Assistance (See Tax help)
C
Child, qualifying 21
Child tax credit 18
Limits:
Modified adjusted gross
income 19
Qualifying child 19
Claims for tax forgiveness 25
Codes, W-2 8
Combat zone:
Election to include pay for earned
income credit 23
Exclusion 12
Extension of deadlines 29
Related forgiveness 25
Community property 7, 26
Contingency operation 29
Credits:
Additional child tax 20
Child tax 18
Earned income 20
Excess social security tax
withheld 23
D
Decedents 24
Deductions, itemized 15
Disability Severance Payments to
Veterans 6
Dual-status aliens 32
E
Earned income credit 20
Social security card 22
Social security number 22
Educational expenses 17
Employee business expenses 16
Excess social security tax withheld
credit 23
Expenses:
Employee business 16
Moving 10
Extensions:
Generally 28
Extensions of:
Deadlines 28
Time to file 28
Time to pay 28, 30
Extensions while in:
Combat zone 28
Contingency operation 28
F
Family 19
(See also Child tax credit)
Filing returns 26
First-time homebuyer credit
repayment 24
Foreclosures:
Mortgage settlement payouts 15
Foreign income 7
Foreign moves 11
Forms:
1040 11, 16, 27
1040A 27
1040EZ 27
1040NR 32
1040NR-EZ 32
2106 16
2106-EZ 16
2848 32, 33
3903 10
4868 28
W-2 8, 23
Foster care:
Child tax credit 19
G
Gross income 4
H
Home:
Away from 16
Definition of 16
Sale of 14
Homebuyer credit 24
Hospitalization 14, 30
I
Identity theft 34
Income:
Foreign source 7
Gross 4
Individual retirement
arrangements 9
Installment agreement:
Payment deferment 31
Interest rate (maximum) 31
Iraq 13
Itemized deductions 15
J
Joint returns 26, 28, 33
K
Kosovo 13
M
Military action related
forgiveness 25
Miscellaneous itemized
deductions 16
Missing status 25, 29, 33
Modified adjusted gross income
(MAGI):
Child tax credit limits 19
Moving expenses 10
N
Nonresident aliens 32
P
Permanent change of station 10
Personal representative 24
Power of attorney 32
Professional dues 17
Publications (See Tax help)
Q
Qualifying child 21
R
Reimbursements:
Employee business expenses 16
Moving and storage 11
Uniforms 17
Reservists 17
Travel 9
Uniforms 17
Resident aliens 31
Returns:
Filing 26
Signing 32
S
Sale of home 14
Same-sex marriage 27
SCRA violation payouts 15
Separate returns 28
Servicemembers Civil Relief Act 31
Serving in a combat zone 14
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Sinai Peninsula 13
Social security numbers (SSNs):
Earned income credit 22
Spouse:
Deadline extension 29
Died 33
Incapacitated 33
Missing 33
Nonresident alien 31
Overseas 33
State bonus payments 5
T
Tax forgiven 25
Tax help 33
Temporary work location 17
Terrorist related forgiveness 25
Transportation 17
Transportation expenses 17
Travel expenses 16
U
Uniforms 17
W
When to file 27
Where to file 27
Y
Yugoslavia 13
Publication 3 (2017) Page 37

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