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Recent Developments for Publication 17 -- 17-Feb-2016

New

Earned income credit. If you didn't have a social security number (an SSN) by the due date of your 2015 return (including extensions), you can't claim the EIC on either your original or an amended 2015 return, even if you later get an SSN. Also, 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 2015 return, even if that child later gets an SSN. See the instructions for Form 1040, lines 66a and 66b.

Child tax credit. If you didn't have an SSN (or ITIN) by the due date of your 2015 return (including extensions), you can't claim the child tax credit on either your original or an amended 2015 return, even if you later get an SSN (or ITIN). Also, no credit is allowed on either your original or an amended 2015 return with respect to a child who didn't have an SSN, ATIN, or ITIN by the due date of your return (including extensions), even if that child later gets one of those numbers. See the instructions for Form 1040, line 52.

American opportunity credit. If you didn't have an SSN (or ITIN) by the due date of your 2015 return (including extensions), you can't claim the American opportunity credit on either your original or an amended 2015 return, even if you later get an SSN (or ITIN). Also, you can't claim this credit on your original or an amended 2015 return for a student who didn't have an SSN, ATIN, or ITIN by the due date of your return (including extensions), even if the student later gets one of those numbers. See Pub. 970, Tax Benefits for Education, and the Instructions for Form 8863, Education Credits, for more information.

Form W2 verification code. The IRS is testing the use of a 16-character code to verify certain Forms W-2. If you are e-filing and your Form W-2 includes a code in a box labeled “Verification Code,” enter the code when prompted by your software; disregard the prompt if your Form W-2 doesn't have the code. If you are filing a paper Form 1040, you do not have to use the code.

Forms 1095-B and 1095-C due dates extended. The due date for furnishing 2015 Form 1095-B, Health Coverage, and the 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, has been extended from January 31, 2016, to March 31, 2016. See Notice 2016-4 for guidance if, as a result of these extensions, you do not receive your Form 1095-B or 1095-C by the time you file your income tax return.

Rollovers to SIMPLE IRAs. Beginning December 19, 2015, you can rollover distributions from traditional IRAs (that are not SIMPLE IRAs) and certain other plans into a SIMPLE IRA after the expiration of the two-year period following the date you first participated in the SIMPLE IRA. For more information, see Pub. 590-A, Contributions to Individual Retirement Accounts (IRAs).

Penalty for erroneous claim of Earned Income Credit. Erroneous claims of the earned income credit may be subject to a penalty under IRC section 6676(a). For more information, see PL 114-113, sec. 209(b).

Correction

Chapter 30, page 205, replace “unless the child was born and died in 2014” with “unless the child was born and died in 2015” at the end of the second paragraph under Earned income credit in both Form 1040A Line Entries and Form 1040 Line Entries.

Chapter 38, page 245, replace “line 47” with “the total of lines 44 and 46” in the first sentence under the paragraph titled Limit on the Credit.

Tax benefits extended

PL 114-113 has extended the following tax benefits mentioned in Pub. 17. You may be able to claim these benefits on your 2015 income tax return.

  • Tuition and fees deduction (PL 114-113, sec. 153).
  • Deduction for educator expenses (PL 114-113, sec. 104).
  • Itemized deduction for general sales taxes in lieu of the itemized deduction for state and local income taxes (PL 114-113, sec. 106).
  • Qualified charitable distributions (PL 114-113, sec. 112).
  • Credit for certain nonbusiness energy property (PL 114-113, sec. 181).
  • Deduction for mortgage insurance premiums (PL 114-113, sec. 152).
  • Exclusion for discharge of qualified principal residence indebtedness (PL 114-113, sec. 151).
  • Indian coal production credit (PL 114-113, sec. 186).
  • Work opportunity credit (PL 114-113, sec. 142).
  • Alternative motor vehicle credit (PL 114-113, sec. 193).
  • Alternative fuel vehicle refueling property credit (PL 114-113, sec. 182).
  • Credit for qualified 2-wheeled plug-in electric vehicles (PL 114-113, sec 183).
  • Allowance for special depreciation (PL 114-113, sec. 143).

What’s New

Page 1 — PL 114-113 has extended the tax benefits listed in Expired tax benefits. On your 2015 income tax return, you may be able to claim the tuition and fees deduction, the deduction for educator expenses, the deduction for state and local general sales taxes, the exclusion from income of qualified charitable distributions from IRAs, the credit for certain nonbusiness energy property, and the deduction for mortgage insurance premiums.

Chapter 1

Page 4 — PL 114-113 has extended the tax benefits listed in Expired tax benefits. On your 2015 income tax return, you may be able to deduct educator expenses. For more information, see Pub. 529, Miscellaneous Deductions. You may also be able to deduct qualified tuition and fees. For more information, see Pub. 970, Tax Benefits for Education.

Page 22 — PL 114-113 has extended the tax benefit listed in the Caution. On your 2015 income tax return, you may be able to claim the tuition and fees deduction, but you cannot do so if your filing status is married filing separately.

Chapter 9

Pages 70 and 75 — PL 114-113 has extended the tax benefit listed in the Cautions. On your 2015 income tax return, you may be able to deduct qualified mortgage insurance premiums for the part of the year the property was held for personal use. If you complete Worksheet 9-1, take these premiums into account when completing lines 2a and 4b. For more information, see Pub. 527, Residential Rental Property.

Chapter 12

Page 89 — PL 114-113 has extended the tax benefit listed in the Caution. You can exclude canceled debt from income if it is qualified principal residence indebtedness, even if the cancelation happened in 2015.

Chapter 13

Page 100 — PL 114-113 has extended the tax benefit listed in Tax Credits. You may be able to claim the nonbusiness energy property credit for property placed in service during 2015. For more information about the credit and how it may affect your basis in property, see the Instructions for Form 5695, Residential Energy Credits.

Chapter 15

Page 111 — PL 114-113 has extended the tax benefits listed in the first, seventh, and last bullet, and also the nonbusiness energy property credit included in the eighth bullet, under Decreases to basis. If you claim these benefits, you must take them into account in figuring the adjusted basis of your home.

Page 112 — PL 114-113 has extended the tax benefit listed in Discharges of qualified principal residence indebtedness. You can exclude from gross income a discharge of qualified principal residence indebtedness, even if the discharge was made in 2015. If you choose to exclude this income, you must reduce (but not below zero) the basis of principal residence by the amount excluded from your gross income.

Chapter 17

Page 120 — PL 114-113 has extended the tax benefit listed in the Caution. The provision allowing qualified charitable distributions from individual retirement accounts (IRAs) applies for 2015. To see if you can claim a deduction for a qualified charitable distribution, see Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs). 

Pages 123 and 124— PL 114-113 has extended the tax benefit listed in the Cautions. On your 2015 income tax return, you may be able to claim the deduction for tuition and fees. If you claim the deduction, do not take it into account in figuring your modified adjusted gross income.

Chapter 19

Page 136— PL 114-113 has extended the tax benefits listed in What’s New for 2015. On your 2015 income tax return, you may be able to deduct educator expenses. For more information, see Pub. 529, Miscellaneous Deductions. You may also be able to deduct qualified tuition and fees. For more information, see Pub. 970, Tax Benefits for Education.

Chapter 22

Pages 148 and 151— PL 114-113 has extended the tax benefit listed in the Cautions. On your 2015 income tax return, you may be able to deduct general sales taxes in lieu of the itemized deduction for state and local income taxes. For more information, see the Instructions for Schedule A (Form 1040).

Chapter 23

Pages 151 and 152 — PL 114-113 has extended the tax benefit listed in the Caution. On your 2015 income tax return, you may be able to deduct qualified mortgage insurance premiums.

Chapter 26

Pages 173, 182, and 183 — PL 114-113 has extended the tax benefit listed in the Cautions. On your 2015 income tax return, you may be able to claim the allowance for special depreciation. For more information, see Pub. 463, Travel, Entertainment, Gift, and Car Expenses.

Chapter 28

Page 195 — PL 114-113 has extended the tax benefits listed in the Caution. On your 2015 income tax return, you may be able to deduct educator expenses. For more information, see Pub. 529, Miscellaneous Deductions.

Chapter 29

Page 200 — PL 114-113 has extended the tax benefits listed in the What’s New. On your 2015 income tax return, you may be able to claim the itemized deduction for general sales taxes in lieu of the itemized deduction for state and local income taxes; the deduction for qualified mortgage insurance premiums; the deduction for educator expenses; and the tuition and fees deduction.

Chapter 30

Page 202 — PL 114-113 has extended the tax benefits listed in the Cautions. On your 2015 income tax return, you may be able to claim the Indian coal production credit and the work opportunity credit. For more information, see the Instructions for Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit; and the Instructions for Form 5884, Work Opportunity Credit.

Chapter 38

Pages 244 and 246 — PL 114-113 has extended the tax benefits listed in the Cautions. On your 2015 income tax return, you may be able to claim the alternative fuel vehicle refueling property credit, the alternative motor vehicle credit, and the nonbusiness energy property credit. For more information, see the Instructions for Form 8910, Alternative Motor Vehicle Credit; the Instructions for Form 8911, Alternative Fuel Vehicle Refueling Property Credit; and the Instructions for Form 5695, Residential Energy Credits. You may also be able to claim a credit for qualified two-wheeled plug-in electric vehicles acquired in 2015. For more information, see the Instructions for Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit.

Page Last Reviewed or Updated: 30-Mar-2016