1. Lesson 9 Miscellaneous Credits

2. Objectives Determine eligibility for the Credit for the Elderly or the Disabled Calculate the Credit for the Elderly or the Disabled Calculate the Credit for Qualified Retirement Savings Contributions - Form 8880 Calculate the Residential Energy Credits for nonbusiness energy property and residential energy efficient property using Form 5695. Calculate the Qualified Electric Vehicle Credit using Form 8834. Calculate the Alternative Motor Vehicle Credit using Form 8910. Accurately report the Foreign Tax Credit if Form 1116 is not required Be aware of the Mortgage Interest Credit

3. Intake/Interview Process Form 13614 – Intake and Interview Sheet - Credits Section

4. Credit - Elderly/Disabled Qualifications U.S. Citizen or resident At least age 65 or retired on permanent and total disability AGI is less than: Single, Head of Household, or Qualifying Widow(er) $17,500 MFJ (both spouses qualified) $25,000 MFJ (one spouse qualified) $20,000 MFS (didn’t live together) $12,500

5. Credit – Elderly/Disabled Computation Nontaxable Social Security or nontaxable pension(s) must be less than: Single, Head of Household, or Qualifying Widow(er) $5,000 MFJ (both spouses qualify) $7,500 MFJ (one spouse qualifies) $5,000 MFS (didn’t live together) $3,750 Use Schedule 3 if filing Form 1040A, use Schedule R if filing Form 1040 Substantial Gainful Activity

6. Credit for Qualified Retirement Savings Contributions Contributions to a retirement plan or IRA may be eligible for a tax credit Non-refundable credit Maximum credit is $1,000 Limitations based on: Filing status Adjusted Gross Income Qualified contributions

7. Credit for Qualified Retirement Savings Contributions Form 8880 is used to calculate the credit Chart for the applicable percentage is part of the form If the taxpayer has received any distributions from a retirement plan, you may need to complete line 4 on the Form 8880

8. Residential Energy Credits Nonbusiness Energy Property Credit Residential Energy Efficient Property Credit Form 5695

9. Qualified Electric Vehicle Credit Qualified Electric Vehicle Form 8834

10. Alternative Motor Vehicle Credit Requirements - Alternative Motor Vehicle Form 8910

11. Foreign Tax Credit Created to avoid double taxation If the Taxpayer paid income, war profits, excess profit taxes to any: Foreign country, U.S. possession, political subdivision or agency of the country or possession. May need to consult paid tax preparer to determine if the tax paid is eligible for the foreign tax credit.

12. Foreign Tax Credit If all of the following requirements are met, Form 1116 is not required: Foreign-source income is from interest and dividends only The total of the foreign taxes does not exceed $300 ($600 for MFJ) All of the foreign taxes were legally owed and paid to countries recognized by the U.S. as eligible for the credit

13. Mortgage Interest Credit Hold a qualified Mortgage Interest Credit Certificate on main home Must reduce mortgage interest deduction on Schedule A (if itemizing) Use Form 8396 to figure credit on mortgage interest paid May carry forward unused credit for up to three years

14. Quality Review (QR) Form 8158 – Quality Review Checklist Adjustments, Deductions and Credits Section

15. Lesson Summary Credit for the Elderly or the Disabled Credit for Qualified Retirement Savings Contributions Residential Energy Credits Qualified Electric Vehicle Credit Alternative Motor Vehicle Credit Foreign Tax Credit Mortgage Interest Credit

16. Lesson 9 International Segment Foreign Tax Credit

17. Objectives Determine which taxes are eligible for the Foreign Tax Credit Apply the criteria for claiming the Foreign Tax Credit Accurately compute the foreign tax credit using Form 1116 or tax preparation software Assist taxpayer in compiling the documents necessary for a paid tax preparer to complete the return

18. Intake/Interview Process Form 13614 – Intake and Interview Sheet - Credits Section

19. What Taxes Qualify Foreign Source Income – Taxed by Foreign Country The following are the basic requirements: - Tax imposed must be similar to income tax imposed in the US - Taxpayer must not receive any kind of specific economic benefit from the payment of the tax - Tax must be imposed by “eligible foreign country”

20. Types of Income Passive Income High Withholding Tax Interest General Limitation Income

21. Form 1116 Part I – Used to report the taxable income or loss from sources outside the United States Part II – Used to report foreign taxes paid or accrued Part III – Used to compute the amount of the Foreign Tax Credit

22. Quality Review (QR) Form 8158 – Quality Review Checklist Adjustments, Deductions and Credits Section

23. International Summary To be eligible for the Foreign Tax Credit, foreign taxes must be: - Based on foreign sourced income - Similar to US income tax - Free of any specific economic benefit - Paid to an “eligible foreign country” The Foreign Tax Credit is computed using Form 1116