Specific Instructions

Identifying Number

Enter the identifying number shown on your tax return. If you are filing Form 1040EZ-T and you did not enter an identifying number on that form, leave this space blank.

How To Complete Lines 1-14, Columns (b) and (c)

Figuring the Actual Amount of Credit or Refund

Taxpayers must have appropriate records for each period a credit or refund is requested. Businesses and nonprofit organizations may be eligible to use an estimation method (described below). Enter the tax for all telephone lines for each period in the applicable column shown on lines 1-14. Complete and attach only one Form 8913 to your return. Include the tax on prepaid telephone cards and prepaid cellular service with long distance service in column (b). Do not include the tax on local-only service.

business and personal
Individuals cannot request the standard amount for their personal or business phone service if they figure the actual credit or refund for any of their phone service.

Example 1.

A corporation files a consolidated return with three subsidiaries. The corporation prepares one Form 8913 which combines the credit or refund request for the entire group.

Example 2.

Audrey files Form 1040 that includes a separate Schedule C (Form 1040) for each of her three businesses. Audrey combines the actual tax paid for her personal and business phone lines and files one Form 8913 with Form 1040.

Business and Nonprofit Estimation Method

A business and nonprofit estimation method is available for corporations, partnerships, estates, trusts, and nonprofit organizations. Business also includes individual taxpayers filing Schedule C, Schedule C-EZ, Schedule E, Schedule F, or Form 4835, with gross receipts above the limit figured in Step 1 of the worksheet. Your organization must have been in business April through September of 2006 to use this method.

This method will allow organizations to make a reasonable estimate of their actual credit or refund for the 41-month refund period. Using the estimation method may reduce the burden of computing the actual credit or refund for all 41 months. However, there are limits on the amount of credit or refund using this method. The limits are explained in the worksheet. Any organization, or individual filing Schedules C, C-EZ, E, F, or Form 4835, can always figure the actual amount of credit or refund and not use the estimation method.

Step 1. Are You Eligible To Use This Method?

1. Are you an individual taxpayer?   
Box
Yes.
Box
No.
Continue
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You can use this method. Go to Step 2 at the bottom of this page.

2. Are you filing Schedule C, C-EZ, E, or F, or Form 4835?   
Box
Yes.
Box
No.
Stop reading here. This does not apply to you.
Continue
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You cannot use this method.

3. Enter the amounts from the following lines of your tax return:   
3a. Schedule C, line 1      
3b. Schedule C, line 6 +    
3c. Schedule C-EZ, line 1 +    
3d. Schedule E, line 3 +    
3e. Schedule F, line 2 +    
3f. Schedule F, line 11 +    
3g. Schedule F, line 45 +    
3h. Form 4835, line 7 +    
3i. Add lines 3a through 3h =    
       

4. Is line 3i more than $25,000?   
Box
Yes.
Box
No.
Stop reading here. This does not apply to you.
You can use this method.
Go to Step 2.
You cannot use this method. Complete lines 1-14 using the actual amounts of tax paid.

Step 2. Figure Your Allowable Excise Tax Rate

1. Enter the total amount you paid for telephone service (including all fees
and taxes) billed in April 2006.
1.    
2. Enter the total federal excise
tax included on line 1.
2.    
3. Divide line 2 by line 1. Carry the
result to at least four decimal places
3.  
4. Enter the total amount you paid for telephone service (including all fees
and taxes) billed in September 2006.
4.      
5. Enter the total federal excise
tax included on line 4.
5.      
6. Divide line 5 by line 4. Carry the
result to at least four decimal places
6.  
7. Subtract line 6 from line 3. 7.  
8. Enter the number of employees
from line 1 of your second quarter of
2006 Form 941 (but do not count any household employees, employees in nonpay status, pensioners, or active members of the Armed Forces). If you did not file Form 941, enter -0-.
8.      
9. If line 8 is 250 or less, enter 0.02.
Otherwise, enter 0.01
9.  
10. Enter the smaller of line 7 or line 9. 10.  

Step 3. Figure Your Credit or Refund for Each Period

  • In column (b) of the worksheet below, enter the telephone expenses paid or accrued from your books and records that were billed for the period in column (a). You may determine your telephone expenses for each month during your tax year by dividing your annual telephone expenses for that tax year by 12.

  • In column (c) of the worksheet below, enter the rate from Step 2, line 10.

  • In column (d) of the worksheet below, multiply column (b) by column (c). Enter the result on the corresponding line in column (d) of Form 8913.

(a) Period (b) Telephone Expenses (including all fees and taxes) (c) Rate From Step 2, Line 10 (d) Tax Credit or Refund (column (b) x column (c))
1. March 2003 - May 2003 $   $
2. June 2003 - Aug. 2003      
3. Sept. 2003 - Nov. 2003      
4. Dec. 2003 - Feb. 2004      
5. March 2004 - May 2004      
6. June 2004 - Aug. 2004      
7. Sept. 2004 - Nov. 2004      
8. Dec. 2004 - Feb. 2005      
9. March 2005 - May 2005      
10. June 2005 - Aug. 2005      
11. Sept. 2005 - Nov. 2005      
12. Dec. 2005 - Feb. 2006      
13. March 2006 - May 2006      
14. June 2006 - July 2006      

Do not complete columns (b) and (c) on Form 8913. Complete column (e) and the rest of Form 8913 using these instructions.

Lines 1-14, Column (e)

All taxpayers must figure the interest due on the credit or refund for each period. If you are an individual, estate, trust, or partnership (except an electing large partnership) and you are filing a calendar year return on or before its original due date, multiply the amount of tax on Form 8913, lines 1-14, column (d), by the interest factor for the corresponding line in the table below. Interest is computed through
May 30, 2007.

Line From Form 8913 Interest Start Date Interest Factor
Line 1 August 1, 2003 .260351533
Line 2 November 1, 2003 .245625746
Line 3 February 1, 2004 .233142332
Line 4 May 1, 2004 .220072831
Line 5 August 1, 2004 .205856373
Line 6 November 1, 2004 .192782734
Line 7 February 1, 2005 .177872636
Line 8 May 1, 2005 .162644579
Line 9 August 1, 2005 .145195286
Line 10 November 1, 2005 .127050415
Line 11 February 1, 2006 .107341197
Line 12 May 1, 2006 .088602722
Line 13 August 1, 2006 .068658029
Line 14 November 1, 2006 .047327318

Interest factors are not provided in these instructions for other taxpayers. Tables of interest rates to figure interest on overpayments for other taxpayers are available in Rev. Proc. 95-17, 1995-1 C.B. 556. The applicable interest rates for overpayments in effect for periods through December 31, 2006, are shown in Rev. Rul. 2006-49, 2006-40 I.R.B. 584, which is available at www.irs.gov/pub/irs-irbs/irb06-40.pdf. For periods after December 31, 2006, use the applicable overpayment rate under section 6621(a)(1) in the quarterly revenue rulings published in the Internal Revenue Bulletin.

Interest must be figured using the interest start date shown in the table above. The interest ending date is 45 days after the later of the original due date or the date you file your return.

Including the Credit or Refund in Income

You must report as interest income in the year received or accrued the part of your credit or refund attributable to interest, from line 15, column (e). If you deducted any telephone excise tax paid, you also must include in gross income in the year received or accrued the smaller of the amount deducted or the rest of your credit or refund, from line 15, column (d), except to the extent the deduction did not reduce federal income tax.

Amended Return

You must complete another Form 8913 in full if you are amending a previously filed Form 8913. On the corrected Form 8913, use the same interest start date and ending date that were required to be used on your original
Form 8913. Attach both a copy of the original Form 8913 and the corrected Form 8913 to the applicable amended return. Write “Amended TETR” at the top of the corrected Form 8913 and the amended return.

Individuals also may file an amended return changing from the standard amount to the actual amount of credit or refund. Attach Form 8913 to Form 1040X and state that you are changing from the standard amount to the actual amount of credit or refund. Write “Amended TETR” at the top of the amended return.


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