Income

irs.gov -

Income

Generally, you must report all income except income that is exempt from tax by law. For details, see the following instructions, especially the instructions for lines 7 through 14b. Also see Pub. 525.

Foreign-Source Income

You must report unearned income, such as interest, dividends, and pensions, from sources outside the United States unless exempt by law or a tax treaty. You must also report earned income, such as wages and tips, from sources outside the United States.

If you worked abroad, you may be able to exclude part or all of your foreign earned income if you file Form 1040. For details, see Pub. 54 and Form 2555 or 2555-EZ.

Foreign retirement plans. If you were a beneficiary of a foreign retirement plan, you may have to report the undistributed income earned in your plan. However, if you were the beneficiary of a Canadian registered retirement plan, see Form 8891 to find out if you can elect to defer tax on the undistributed income. If you elect to defer tax, you must file Form 1040.

Report distributions from foreign pension plans on lines 12a and 12b.

Foreign accounts and trusts. You must complete Part III of Schedule B if you:
  • Had a foreign account, or

  • Received a distribution from, or were a grantor of, or a transferor to, a foreign trust.

Note.

If you had foreign financial assets in 2012, you may have to file Form 8938. If you must file Form 8938, you cannot file Form 1040A. You must file Form 1040. See Form 8938 and its instructions.

Rounding Off to Whole Dollars

You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.

If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.

Example.

You received two Forms W-2, one showing wages of $5,009.55 and one showing wages of $8,760.73. On Form 1040A, line 7, you would enter $13,770 ($5,009.55 + $8,760.73 = $13,770.28).

Refunds of State or Local Income Taxes

If you received a refund, credit, or offset of state or local income taxes in 2012, you may receive a Form 1099-G.

For the year the tax was paid to the state or other taxing authority, did you itemize deductions?

No.
None of your refund is taxable.
Yes.
You may have to report part or all of the refund as income on Form 1040 for 2012. See Pub. 525 for details.

Community Property States

Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you and your spouse lived in a community property state, you must usually follow state law to determine what is community income and what is separate income. For details, see Form 8958 and Pub. 555.

Nevada, Washington, and California domestic partners. A registered domestic partner in Nevada, Washington, or California (or a person in California who is married to a person of the same sex) generally must report half the combined community income of the individual and his or her domestic partner (or California same-sex spouse). See Form 8958 and see Pub 555.

Line 7

Wages, Salaries, Tips, etc.

Enter the total of your wages, salaries, tips, etc. If a joint return, also include your spouse's income. For most people, the amount to enter on this line should be shown in box 1 of their Form(s) W-2. But the following types of income must also be included in the total on line 7.

  • All wages received as a household employee for which you did not receive a Form W-2 because your employer paid you less than $1,800 in 2012. Also, enter “HSH” and the amount not reported on a Form W-2 in the space to the left of line 7.

  • Tip income you did not report to your employer. But you must use Form 1040 and Form 4137 if you received tips of $20 or more in any month and did not report the full amount to your employer, or your Form(s) W-2 shows allocated tips that you must report as income. You must report the allocated tips shown on your Form(s) W-2 unless you can prove that you received less. Allocated tips should be shown in box 8 of your Form(s) W-2. They are not included as income in box 1. See Pub. 531 for more details.

  • Dependent care benefits, which should be shown in box 10 of your Form(s) W-2. But first complete Form 2441 to see if you can exclude part or all of the benefits.

  • Scholarship and fellowship grants not reported on Form W-2. Also, enter “SCH” and the amount in the space to the left of line 7. However, if you were a degree candidate, include on line 7 only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel must be reported on line 7.

  • Disability pensions shown on Form 1099-R if you have not reached the minimum retirement age set by your employer. But see Insurance premiums for retired public safety officers, in the instructions for lines 12a and 12b. Disability pensions received after you reach minimum retirement age and other payments shown on Form 1099-R (other than payments from an IRA*) are reported on lines 12a and 12b of Form 1040A. Payments from an IRA are reported on lines 11a and 11b.

    * This includes a Roth, SEP, or SIMPLE IRA.

Missing or Incorrect Form W-2?

Your employer is required to provide or send Form W-2 to you no later than January 31, 2013. If you do not receive it by early February, use TeleTax topic 154 to find out what to do. Even if you do not get a Form W-2, you must still report your earnings on line 7. If you lose your Form W-2 or it is incorrect, ask your employer for a new one.

Line 8a

Taxable Interest

Each payer should send you a Form 1099-INT or Form 1099-OID. Enter your total taxable interest income on line 8a. But you must fill in and attach Schedule B if the total is over $1,500 or any of the other conditions listed at the beginning of the Schedule B instructions apply to you.

Interest credited in 2012 on deposits that you could not withdraw because of the bankruptcy or insolvency of the financial institution may not have to be included in your 2012 income. For details, see Pub. 550.

If you get a 2012 Form 1099-INT for U.S. savings bond interest that includes amounts you reported before 2012, see Pub. 550.

Line 8b

Tax-Exempt Interest

If you received any tax-exempt interest, such as from municipal bonds, each payer should send you a Form 1099-INT. Your tax-exempt interest should be shown in box 8 of Form 1099-INT. Enter the total on line 8b. Also include on line 8b any exempt-interest dividends from a mutual fund or other regulated investment company. This amount should be shown in box 10 of Form 1099-DIV.

Do not include interest earned on your IRA, health savings account, Archer or Medicare Advantage MSA, or Coverdell education savings account.

If you received tax-exempt interest from private activity bonds issued after August 7, 1986, you must use Form 1040.

Line 9a

Ordinary Dividends

Each payer should send you a Form 1099-DIV. Enter your total ordinary dividends on line 9a. This amount should be shown in box 1a of Form(s) 1099-DIV.

You must fill in and attach Schedule B if the total is over $1,500 or you received, as a nominee, ordinary dividends that actually belong to someone else.

You must use Form 1040 if you received nondividend distributions (box 3 of Form 1099-DIV) required to be reported as capital gains.

For details, see Pub. 550.

Line 9b

Qualified Dividends

Enter your total qualified dividends on line 9b. Qualified dividends are also included in the ordinary dividend total required to be shown on line 9a. Qualified dividends are eligible for a lower tax rate than other ordinary income. Generally, these dividends are shown in box 1b of Form(s) 1099-DIV. See Pub. 550 for the definition of qualified dividends if you received dividends not reported on Form 1099-DIV.

Exception. Some dividends may be reported as qualified dividends in box 1b of Form 1099-DIV but are not qualified dividends. These include:
  • Dividends you received as a nominee. See the Schedule B instructions.

  • Dividends you received on any share of stock that you held for less than 61 days during the 121-day period that began 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. When counting the number of days you held the stock, include the day you disposed of the stock but not the day you acquired it. See the examples that follow. Also, when counting the number of days you held the stock, you cannot count certain days during which your risk of loss was diminished. See Pub. 550 for more details.

  • Dividends attributable to periods totaling more than 366 days that you received on any share of preferred stock held for less than 91 days during the 181-day period that began 90 days before the ex-dividend date. When counting the number of days you held the stock, you cannot count certain days during which your risk of loss was diminished. See Pub. 550 for more details. Preferred dividends attributable to periods totaling less than 367 days are subject to the 61-day holding period rule just described.

  • Dividends on any share of stock to the extent that you are under an obligation (including a short sale) to make related payments with respect to positions in substantially similar or related property.

  • Payments in lieu of dividends, but only if you know or have reason to know that the payments are not qualified dividends.

Example 1.

You bought 5,000 shares of XYZ Corp. common stock on July 8, 2012. XYZ Corp. paid a cash dividend of 10 cents per share. The ex-dividend date was July 16, 2012. Your Form 1099-DIV from XYZ Corp. shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). However, you sold the 5,000 shares on August 11, 2012. You held your shares of XYZ Corp. for only 34 days of the 121-day period (from July 9, 2012, through August 11, 2012). The 121-day period began on May 17, 2012, (60 days before the ex-dividend date) and ended on September 14, 2012. You have no qualified dividends from XYZ Corp. because you held the XYZ stock for less than 61 days.

Example 2.

Assume the same facts as in Example 1 except that you bought the stock on July 15, 2012 (the day before the ex-dividend date), and you sold the stock on September 16, 2012. You held the stock for 63 days (from July 15, 2012, through September 16, 2012). The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2012, through September 14, 2012).

Example 3.

You bought 10,000 shares of ABC Mutual Fund common stock on July 8, 2012. ABC Mutual Fund paid a cash dividend of 10 cents a share. The ex-dividend date was July 16, 2012. The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000, and qualified dividends of $200. However, you sold the 10,000 shares on August 11, 2012. You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days.

Be sure you use the Qualified Dividends and Capital Gain Tax Worksheet to figure your tax.

Line 10

Capital Gain Distributions

Each payer should send you a Form 1099-DIV. Do any of the Forms 1099-DIV or substitute statements you, or your spouse if filing a joint return, received have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain)?

Yes.
You must use Form 1040.
No.
You can use Form 1040A. Enter your total capital gain distributions (from box 2a of Form(s) 1099-DIV) on line 10. Also, be sure you use the Qualified Dividends and Capital Gain Tax Worksheet to figure your tax.

If you received capital gain distributions as a nominee (that is, they were paid to you but actually belong to someone else), report on line 10 only the amount that belongs to you. Include a statement showing the full amount you received and the amount you received as a nominee. See the Schedule B instructions for filing requirements for Forms 1099-DIV and 1096.

Lines 11a and 11b

IRA Distributions

You should receive a Form 1099-R showing the total amount of any distribution from your IRA before income tax and other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. Unless otherwise noted in the line 11a and 11b instructions, an IRA includes a traditional IRA, Roth IRA, simplified employee pension (SEP) IRA, and a savings incentive match plan for employees (SIMPLE) IRA. Except as provided below, leave line 11a blank and enter the total distribution (from Form 1099-R, box 1) on line 11b.

If you converted part or all of an IRA to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, you generally should have reported half of it on your 2011 return. Report the rest on your 2012 return. See 2010 Roth IRA conversions, later.

Exception 1. Enter the total distribution on line 11a if you rolled over part or all of the distribution from one:
  • IRA to another IRA of the same type (for example, from one traditional IRA to another traditional IRA),

  • SEP or SIMPLE IRA to a traditional IRA, or

  • IRA to a qualified plan other than an IRA.

Also, enter “Rollover” next to line 11b. If the total distribution was rolled over in a qualified rollover, enter -0- on line 11b. If the total distribution was not rolled over in a qualified rollover, enter the part not rolled over on line 11b unless Exception 2 applies to the part not rolled over. Generally, a qualified rollover must be made within 60 days after the day you received the distribution. For more details on rollovers, see Pub. 590.

If you rolled over the distribution into a qualified plan other than an IRA or you made the rollover in 2013, include a statement explaining what you did.

Exception 2. If any of the following apply, enter the total distribution on line 11a and see Form 8606 and its instructions to figure the amount to enter on line 11b.
  1. You received a distribution from an IRA (other than a Roth IRA) and you made nondeductible contributions to any of your traditional or SEP IRAs for 2012 or an earlier year. If you made nondeductible contributions to these IRAs for 2012, also seePub. 590.

  2. You received a distribution from a Roth IRA. But if either (a) or (b) below applies, enter -0- on line 11b; you do not have to see Form 8606 or its instructions.

    1. Distribution code T is shown in box 7 of Form 1099-R and you made a contribution (including a conversion) to a Roth IRA for 2007 or an earlier year.

    2. Distribution code Q is shown in box 7 of Form 1099-R.

  3. You converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 2012.

  4. You had a 2011 or 2012 IRA contribution returned to you, with the related earnings or less any loss, by the due date (including extensions) of your tax return for that year.

  5. You made excess contributions to your IRA for an earlier year and had them returned to you in 2012.

  6. You recharacterized part or all of a contribution to a Roth IRA as a traditional IRA contribution, or vice versa.

Exception 3. If the distribution is a qualified charitable distribution (QCD), enter the total distribution on line 11a. If the total amount distributed is a QCD, enter -0- on line 11b. If only part of the distribution is a QCD, enter the part that is not a QCD on line 11b unless Exception 2 applies to that part. Enter “QCD” next to line 11b.

A QCD is a distribution made directly by the trustee of your IRA (other than an ongoing SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions (with certain exceptions). You must have been at least age 70½ when the distribution was made. Your total QCDs for the year cannot be more than $100,000. (On a joint return, your spouse can also have a QCD of up to $100,000.) The amount of the QCD is limited to the amount that would otherwise be included in your income. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income. See Pub. 590 for details.

You cannot claim a charitable contribution deduction for any QCD not included in your income.

If a QCD is made in January 2013, you can elect to treat it as made in 2012. Also, a distribution made to you in December 2012 can be treated as a QCD if you transferred it to a charity in January 2013. See Pub. 590.

Exception 4. If the distribution is a health savings account (HSA) funding distribution (HFD), you must file Form 1040. See Exception 4 in the instructions for Form 1040, lines 15a and 15b. An HFD is a distribution made directly by the trustee of your IRA (other than an ongoing SEP or SIMPLE IRA) to your HSA.

More than one exception applies. If more than one exception applies, include a statement showing the amount of each exception, instead of making an entry next to line 11b. For example: “Line 11b--$1,000 Rollover and $500 QCD.” But you do not need to attach a statement if only Exception 2 and one other exception apply.

2010 Roth IRA conversions. If you converted part or all of an IRA to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, include on line 11b the amount from your 2010 Form 8606, line 20b. However, you may have to include a different amount on line 11b if either of the following applies.
  • You received a distribution from a Roth IRA in 2010 but not in 2011. See Pub. 590 to figure the amount to include on line 11b.

  • You received a distribution from a Roth IRA in 2011. Include on line 11b the amount from your 2011 Form 8606, line 38.

More than one distribution. If you (or your spouse if filing jointly) received more than one distribution, figure the taxable amount of each distribution and enter the total of the taxable amounts on line 11b. Enter the total amount of those distributions on line 11a.

You may have to pay an additional tax if (a) you received an early distribution from your IRA and the total was not rolled over or (b) you were born before July 1, 1941, and received less than the minimum required distribution from your traditional, SEP, and SIMPLE IRAs. If you do owe this tax, you must use Form 1040.

More information. For more information about IRAs, see Pub. 590.

Lines 12a and 12b

Pensions and Annuities

You should receive a Form 1099-R showing the total amount of your pension and annuity payments before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. Pension and annuity payments include distributions from 401(k), 403(b), and governmental 457(b) plans. Rollovers and lump-sum distributions are explained later. Do not include the following payments on lines 12a and 12b. Instead, report them on line 7.

  • Disability pensions received before you reach the minimum retirement age set by your employer.

  • Corrective distributions (including any earnings) of excess salary deferrals or excess contributions to retirement plans. The plan must advise you of the year(s) the distributions are includible in income.

Attach Form(s) 1099-R to Form 1040A if any federal income tax was withheld.

If you rolled over part or all of a distribution from a qualified retirement plan (other than a designated Roth account) to a Roth IRA in 2010 (or you rolled over part or all of a distribution from a 401(k) or 403(b) plan to a designated Roth account in 2010) and did not elect to report the taxable amount on your 2010 return, you generally should have reported half of it on your 2011 return. Report the rest on your 2012 return. See 2010 Roth IRA rollovers or 2010 in-plan Roth rollovers, whichever applies.

Fully taxable pensions and annuities. Your payments are fully taxable if (a) you did not contribute to the cost (see Cost, later) of your pension or annuity, or (b) you got back your entire cost tax free before 2012. But see Insurance premiums for retired public safety officers, later. If your pension or annuity is fully taxable, enter the total pension or annuity payments (from Form(s) 1099-R, box 1) on line 12b; do not make an entry on line 12a.

Fully taxable pensions and annuities also include military retirement pay shown on Form 1099-R. For details on military disability pensions, see Pub. 525. If you received a Form RRB-1099-R, see Pub. 575 to find out how to report your benefits.

Partially taxable pensions and annuities. Enter the total pension or annuity payments (from Form 1099-R, box 1) on line 12a. If your Form 1099-R does not show the taxable amount, you must use the General Rule explained in Pub. 939 to figure the taxable part to enter on line 12b. But if your annuity starting date (defined later) was after July 1, 1986, see Simplified Method, later, to find out if you must use that method to figure the taxable part.

You can ask the IRS to figure the taxable part for you for a $1,000 fee. For details, see Pub. 939.

If your Form 1099-R shows a taxable amount, you can report that amount on line 12b. But you may be able to report a lower taxable amount by using the General Rule or the Simplified Method or if the exclusion for retired public safety officers, discussed next, applies.

Insurance premiums for retired public safety officers. If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for coverage by an accident or health plan or a long-term care insurance contract. You can do this only if you retired because of disability or because you reached normal retirement age. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be from a plan maintained by the employer from which you retired as a public safety officer. Also, the distribution must be made directly from the plan to the provider of the accident or health plan or long-term care insurance contract. You can exclude from income the smaller of the amount of the premiums or $3,000. You can only make this election for amounts that would otherwise be included in your income.

An eligible retirement plan is a governmental plan that is:

  • a qualified trust,

  • a section 403(a) plan,

  • a section 403(b) plan, or

  • a section 457(b) plan.

If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The amount shown in box 2a of Form 1099-R does not reflect the exclusion. Report your total distributions on line 12a and the taxable amount on line 12b. Enter “PSO” next to line 12b.

If you are retired on disability and reporting your disability pension on line 7, include only the taxable amount on that line and enter “PSO” and the amount excluded in the space to the left of line 7.

Simplified Method. You must use the Simplified Method if either of the following applies.
  1. Your annuity starting date was after July 1, 1986, and you used this method last year to figure the taxable part.

  2. Your annuity starting date was after November 18, 1996, and both of the following apply.

    1. The payments are from a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity.

    2. On your annuity starting date, either you were under age 75 or the number of years of guaranteed payments was fewer than 5. See Pub. 575 for the definition of guaranteed payments.

If you must use the Simplified Method, complete the Simplified Method Worksheet in these instructions to figure the taxable part of your pension or annuity. For more details on the Simplified Method, see Pub. 575 or Pub. 721 for U.S. Civil Service retirement benefits.

If you received U.S. Civil Service retirement benefits and you chose the alternative annuity option, see Pub. 721 to figure the taxable part of your annuity. Do not use the Simplified Method Worksheet in these instructions.

Annuity starting date. Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed.

Age (or combined ages) at annuity starting date. If you are the retiree, use your age on the annuity starting date. If you are the survivor of a retiree, use the retiree's age on his or her annuity starting date. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, use your combined ages on the annuity starting date.

If you are the beneficiary of an employee who died, see Pub. 575. If there is more than one beneficiary, see Pub. 575 or Pub. 721 to figure each beneficiary's taxable amount.

Cost. Your cost is generally your net investment in the plan as of the annuity starting date. It does not include pre-tax contributions. Your net investment should be shown in box 9b of Form 1099-R for the first year you received payments from the plan.

Rollovers. Generally, a qualified rollover is a tax-free distribution of cash or other assets from one retirement plan that is contributed to another plan within 60 days of receiving the distribution. However, a qualified rollover to a Roth IRA or a designated Roth account is generally not a tax-free distribution. Use lines 12a and 12b to report a qualified rollover, including a direct rollover, from one qualified employer's plan to another or to an IRA or SEP.

Enter on line 12a the distribution from Form 1099-R, box 1. From this amount, subtract any contributions (usually shown in box 5) that were taxable to you when made. From that result, subtract the amount of the qualified rollover. Enter the remaining amount on line 12b. If the remaining amount is zero and you have no other distribution to report on line 12b, enter zero on line 12b. Also, enter “Rollover” next to line 12b.

See Pub. 575 for more details on rollovers, including special rules that apply to rollovers from designated Roth accounts, partial rollovers of property, and distributions under qualified domestic relations orders.

2010 Roth IRA rollovers. If you rolled over part or all of a qualified retirement plan (other than a designated Roth account) to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, include on line 12b the amount from your 2010 Form 8606, line 25b. However, you may have to include a different amount on line 12b if either of the following applies.
  • You received a distribution from a Roth IRA in 2010 but not in 2011. See Pub. 575 to figure the amount to enter on line 12b.

  • You received a distribution from a Roth IRA in 2011. Include on line 12b the amount from your 2011 Form 8606, line 38.

.

2010 in-plan Roth rollovers. If you rolled over part or all of a qualified retirement plan to a designated Roth account in 2010 and did not report the taxable amount on your 2010 return, include on line 12b the amount from your 2010 Form 8606, line 25b. However, you may have to include a different amount on line 12b if either of the following applies.
  • You received a distribution from your designated Roth account allocable to an in-plan Roth rollover in 2010 but not in 2011. See Pub. 575 to figure the amount to include on line 12b.

  • You received a distribution from your designated Roth account allocable to an in-plan Roth rollover in 2011. Include on line 12b the amount from your 2011 Form 8606, line 48.

Lump-sum distributions. If you received a lump-sum distribution from a profit-sharing or retirement plan, your Form 1099-R should have the “Total distribution” box in box 2b checked. You must use Form 1040 if you owe additional tax because you received an early distribution from a qualified retirement plan and the total amount was not rolled over in a qualified rollover. See Pub. 575 to find out if you owe this tax.

Enter the total distribution on line 12a and the taxable part on line 12b. For details, see Pub. 575.

You may be able to pay less tax on the distribution if you were born before January 2, 1936, or you are the beneficiary of a deceased employee who was born before January 2, 1936. But you must use Form 1040 to do so. For details, see Form 4972.

Simplified Method Worksheet—Lines 12a and 12b

Before you begin:

  • If you are the beneficiary of a deceased employee or former employee who died before August 21, 1996, include any death benefit exclusion that you are entitled to (up to $5,000) in the amount entered on line 2 below.

Note. If you had more than one partially taxable pension or annuity, figure the taxable part of each separately. Enter the total of the taxable parts on Form 1040A, line 12b. Enter the total pension or annuity payments received in 2012 on Form 1040A, line 12a.

1. Enter the total pension or annuity payments from Form 1099-R, box 1. Also, enter this amount on Form 1040A,
line 12a
1.
2. Enter your cost in the plan at the annuity starting date 2.
Note. If you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Otherwise, go to line 3.
3. Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3.
4. Divide line 2 by the number on line 3 4.
5. Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date was before 1987, skip lines 6 and 7 and enter this amount on line 8. Otherwise, go to line 6 5.
6. Enter the amount, if any, recovered tax free in years after 1986. If you completed this worksheet last year, enter the amount from line 10 of last year's worksheet 6.
7. Subtract line 6 from line 2 7.
8. Enter the smaller of line 5 or line 7 8.
9. Taxable amount. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, enter this amount on Form 1040A, line 12b. If your Form 1099-R shows a larger amount, use the amount on this line instead of the amount from Form 1099-R. If you are a retired public safety officer, see Insurance premiums for retired public safety officers before entering an amount on line 12b 9.
10. Was your annuity starting date before 1987?
Yes.
Leave line 10 blank.
No.
Add lines 6 and 8. This is the amount you have recovered tax free through 2012. You will need this number when you fill out this worksheet next year. 10.
Table 1 for Line 3 Above
AND your annuity starting date was—
IF the age at annuity starting date was . . . before November 19, 1996,
enter on line 3 . . .
after November 18, 1996, enter on line 3 . . .
55 or under 300 360
56–60 260 310
61–65 240 260
66–70 170 210
71 or older 120 160
Table 2 for Line 3 Above
IF the combined ages at annuity
starting date were . . .
THEN enter on line 3 . . .
110 or under 410
111–120 360
121–130 310
131–140 260
141 or older 210

Line 13

Unemployment Compensation and Alaska Permanent Fund Dividends

Unemployment compensation. You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you in 2012. Report this amount on line 13. However, if you made contributions to a governmental unemployment compensation program or to a governmental paid family leave program, reduce the amount you report on line 13 by those contributions.

If you received an overpayment of unemployment compensation in 2012 and you repaid any of it in 2012, subtract the amount you repaid from the total amount you received. Enter the result on line 13. Also, enter “Repaid” and the amount you repaid in the space to the left of line 13. If, in 2012, you repaid unemployment compensation that you included in gross income in an earlier year, you can deduct the amount repaid. But you must use Form 1040 to do so. See Pub. 525 for details.

Alaska Permanent Fund dividends. Include the dividends in the total on line 13.

Social Security Benefits Worksheet—Lines 14a and 14b

Before you begin:

  • Complete Form 1040A, lines 16 and 17, if they apply to you.

  • If you are married filing separately and you lived apart from your spouse for all of 2012, enter “D” to the right of the word “benefits” on line 14a. If you do not, you may get a math error notice from the IRS.

  • Be sure you have read the Exception in the line 14a and 14b instructions to see if you can use this worksheet instead of a publication to find out if any of your benefits are taxable.

1. Enter the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099. Also, enter this amount on Form 1040A, line 14a 1.
2. Enter one-half of line 1 2.
3. Enter the total of the amounts from Form 1040A, lines 7, 8a, 9a, 10, 11b, 12b, and 13 3.
4. Enter the amount, if any, from Form 1040A, line 8b 4.
5. Add lines 2, 3, and 4 5.
6. Enter the total of the amounts from Form 1040A, lines 16 and 17 6.
7. Is the amount on line 6 less than the amount on line 5?
No.
None of your social security benefits are taxable. Enter -0- on Form 1040A, line 14b.
Yes. Subtract line 6 from line 5 7.
8. If you are:
  • Married filing jointly, enter $32,000.

  • Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2012, enter $25,000.

8.
  • Married filing separately and you lived with your spouse at any time in 2012, skip lines 8 through 15; multiply line 7 by 85% (.85) and enter the result on line 16. Then go to line 17.

9. Is the amount on line 8 less than the amount on line 7?
No.
None of your social security benefits are taxable. Enter -0- on Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2012, be sure you entered “D” to the right of the word “benefits” on line 14a.
Yes. Subtract line 8 from line 7 9.
10. Enter: $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2012 10.
11. Subtract line 10 from line 9. If zero or less, enter -0- 11.
12. Enter the smaller of line 9 or line 10 12.
13. Enter one-half of line 12 13.
14. Enter the smaller of line 2 or line 13 14.
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0- 15.
16. Add lines 14 and 15 16.
17. Multiply line 1 by 85% (.85) 17.
18. Taxable social security benefits. Enter the smaller of line 16 or line 17. Also enter this amount on Form 1040A, line 14b 18.
If any of your benefits are taxable for 2012 and they include a lump-sum benefit payment that was for an earlier year, you may be able to reduce the taxable amount. See Pub. 915 for details.

Lines 14a and 14b

Social Security Benefits

You should receive a Form SSA-1099 showing in box 3 the total social security benefits paid to you. Box 4 will show the amount of any benefits you repaid in 2012. If you received railroad retirement benefits treated as social security, you should receive a Form RRB-1099.

Use the Social Security Benefits Worksheet in these instructions to see if any of your benefits are taxable.

Exception. Do not use the Social Security Benefits Worksheet if any of the following applies.

  • You made contributions to a traditional IRA for 2012 and you or your spouse were covered by a retirement plan at work. Instead, use the worksheets in Pub. 590 to see if any of your social security benefits are taxable and to figure your IRA deduction.

  • You repaid any benefits in 2012 and your total repayments (box 4) were more than your total benefits for 2012 (box 3). None of your benefits are taxable for 2012. Also, you may be able to take an itemized deduction or a credit for part of the excess repayments if they were for benefits you included in gross income in an earlier year. But you must use Form 1040 to do so. For more details, see Pub. 915.

  • You file Form 8815. Instead, use the worksheet in Pub. 915.