Some credits (such as the earned income credit) are not listed above because they are treated as payments. See Payments , later.

  There are other credits that are not discussed in this publication. These include the following credits.

  Another tax you may have to pay, the alternative minimum tax, is discussed later in this chapter.

  There are other taxes that are not discussed in this publication. These include the following items.

  Another credit that is treated as a payment is the credit for federal excise tax paid on fuels. This credit is for persons who have a nontaxable use of certain fuels, such as diesel fuel and kerosene. It is claimed on Form 1040, line 70. See Form 4136, Credit for Federal Tax Paid on Fuels.

After you complete the line entries for the tax form you are filing, fill in your name and address. Enter your social security number in the space provided. If you are married, enter the social security numbers of you and your spouse even if you file separately. Sign and date your return and enter your occupation(s). If you are filing a joint return, both you and your spouse must sign it. Enter your daytime phone number in the space provided. This may help speed the processing of your return if we have a question that can be answered over the phone. If you are filing a joint return, you may enter either your or your spouse's daytime phone number.

If you want to allow a friend, family member, or any other person you choose to discuss your 2011 tax return with the IRS, check the “Yes” box in the “Third party designee” area on your return. Also enter the designee's name, phone number, and any five digits the designee chooses as his or her personal identification number (PIN). If you check the “Yes” box, you, and your spouse if filing a joint return, are authorizing the IRS to call the designee to answer any questions that may arise during the processing of your return.

Fill in and attach any schedules and forms asked for on the lines you completed. Attach a copy of each of your Forms W-2 to your return. Also attach any Form 1099-R you received that has withholding tax in box 4.

Mail your return to the Internal Revenue Service Center for the area where you live. A list of Service Center addresses is shown near the end of this publication.

For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax.

Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends .

  A child born on January 1, 1988, is considered to be age 24 at the end of 2011. You cannot make this election for such a child.

The federal income tax on your child's income may be more if you make the Form 8814 election.

Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Only the amount over $1,900 is added to your income. The amount over $1,900 is shown on Form 8814, line 6. Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Include the amount from Form 8814, line 12, on Form 1040, line 21. Enter “Form 8814” on the dotted line next to line 21. If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040, line 21.

Use Form 8814, Part II, to figure the tax on the $1,900 of your child's interest and dividends that you do not include in your income. This tax is added to the tax figured on your income.

This additional tax is the smaller of:

Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44. Check box a on Form 1040, line 44.

David and Linda Parks are married and will file separate tax returns for 2011. Their only child, Philip, is 8. Philip received a Form 1099-INT showing $1,650 taxable interest income and a Form 1099-DIV showing $1,150 ordinary dividends. All the dividends were qualified dividends. His parents decide to include that income on one of their returns so they will not have to file a return for Philip.

First, David and Linda each figure their taxable income (Form 1040, line 43) without regard to Philip's income. David's taxable income is $56,700 and Linda's is $74,300. Because her taxable income is greater, Linda can elect to include Philip's income on her return. See Which Parent's Return To Use , earlier.

On Form 8814 (see illustrated form), Linda enters her name and social security number, then Philip's name and social security number. She enters Philip's taxable interest income, $1,650, on line 1a. Philip had no tax-exempt interest income, so she leaves line 1b blank. She enters Philip's ordinary dividends, $1,150, on line 2a. All of Philip's ordinary dividends were qualified dividends, so Linda also enters $1,150 on line 2b. Philip did not have any capital gain distributions, so she leaves line 3 blank.

Linda adds lines 1a and 2a and enters the result, $2,800, on line 4. Because Philip had qualified dividends, Linda must complete lines 7 through 11 of Form 8814. She includes the amount from line 9 of Form 8814 ($370) on lines 9a and 9b of her Form 1040. On the dotted lines next to lines 9a and 9b, she enters “Form 8814–$370.”

Linda includes $530 in the total on line 21 of her Form 1040 (not illustrated) and in the space next to that line writes “Form 8814–$530.” Adding that amount, plus the $370 of qualified dividends, to her income increases each of the amounts on lines 22, 37, 38, 41, and 43 of her Form 1040 by $900. Linda is not claiming any deductions that are affected by the increase to her income. Therefore, her revised taxable income on line 43 is $75,200 ($74,300 + $370 + $530).

On Form 8814, Linda subtracts the $950 shown on line 13 from the $2,800 on line 4 and enters the result, $1,850, on line 14. Because that amount is not less than $950, she enters $95 on line 15. This is the tax on the first $1,900 of Philip's income, which Linda did not have to add to her income. She must add this additional tax to the tax figured on her revised taxable income.

The tax on her $75,200 revised taxable income, figured using the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions, is $15,098. She adds $95, and enters $15,193 on Form 1040, line 44, and checks box a.

Linda attaches Form 8814 to her Form 1040.

On Form 8615, lines A and B, enter the parent's name and social security number. (If the parents filed a joint return, enter the name and social security number listed first on the joint return.) On line C, check the box for the parent's filing status.

See Which Parent's Return To Use at the beginning of this chapter for information on which parent's return information must be used on Form 8615.

The first step in figuring a child's tax using Form 8615 is to figure the child's net investment income. To do that, use Form 8615, Part I.

The next step in completing Form 8615 is to figure a tentative tax on the child's net investment income at the parent's tax rate. The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net investment income (plus the net investment income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it.

When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net investment income. For example, do not refigure the medical expense deduction.

Figure the tentative tax on Form 8615, lines 6 through 13.

The final step in figuring a child's tax using Form 8615 is to determine the larger of:

This is the child's tax. It is figured on Form 8615, lines 14 through 18.

The following example includes a completed Form 8615. Form 1040A is not shown.

John and Laura Brown have one child, Sara. She is 13 and has $2,800 taxable interest income and $1,500 earned income. She does not itemize deductions. John and Laura file a joint return with John's name and social security number listed first. They claim three exemptions, including an exemption for Sara, on their return.

Because Sara is under age 18 and has more than $1,900 investment income, part of her income may be subject to tax at her parents' rate. A completed Form 8615 must be attached to her return.

Sara's father, John, fills out Sara's return for her. He completes her Form 1040A through line 27, then begins completing her Form 8615.

John enters his name and social security number on Sara's Form 8615 because his name and number are listed first on the joint return he and Laura are filing. He checks the box for married filing jointly.

He enters Sara's investment income, $2,800, on line 1. Sara does not itemize deductions, so John enters $1,900 on line 2. He enters $900 ($2,800 - $1,900) on line 3.

Sara's taxable income on her Form 1040A, line 27, is $2,500. This is her total income ($4,300) minus her standard deduction ($1,800). Her standard deduction is limited to the amount of her earned income plus $300. John enters $2,500 on line 4.

John compares lines 3 and 4 and enters the smaller amount, $900, on line 5.

John enters $48,000 on line 6. This is the taxable income from line 43 of John and Laura's joint Form 1040 return. Sara is an only child, so line 7 is blank. He adds line 5 ($900), line 6 ($48,000), and line 7 (blank), and enters $48,900 on line 8.

Using the column for married filing jointly in the Tax Table, John finds the tax on $48,900. He enters the tax, $6,489, on line 9. He enters $6,354 on line 10. This is the tax from line 44 of John and Laura's Form 1040. He enters $135 on line 11 ($6,489 - $6,354).

Because line 7 is blank, John skips lines 12a and 12b and enters $135 on line 13.

John subtracts line 5 ($900) from line 4 ($2,500) and enters the result, $1,600, on line 14. Using the column for single filing status in the Tax Table, John finds the tax on $1,600 and enters this tax, $161, on line 15. He adds lines 13 ($135) and 15 ($161) and enters $296 on line 16.

Using the column for single filing status in the Tax Table, John finds the tax on $2,500 (line 4) and enters this tax, $251, on line 17.

John compares lines 16 and 17 and enters the larger amount, $296, on line 18 of Sara's Form 8615. He also enters that amount on line 28 of Sara's Form 1040A.

John also completes Schedule B (Form 1040A or 1040) for Sara.

Your child and dependent care expenses must be for the care of one or more qualifying persons.

A qualifying person is:

To claim the credit, you (and your spouse if filing jointly) must have earned income during the year.

Child and dependent care expenses must be work-related to qualify for the credit. Expenses are considered work-related only if both of the following are true.

Generally, married couples must file a joint return to take the credit. However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit.

You must identify all persons or organizations that provide care for your child or dependent. Use Form 2441, Part I to show the information.

To figure the credit for 2011 work-related expenses, count only those you paid by December 31, 2011.

The amount of work-related expenses you use to figure your credit cannot be more than:

Earned income is defined under Earned Income Test , earlier.

There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons.

To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. This percentage depends on your adjusted gross income shown on Form 1040, line 38, or Form 1040A, line 22. The following table shows the percentage to use based on adjusted gross income.

  Joan's younger child (Susan) stays at her employer's on-site childcare center while she works. The benefits from this childcare center qualify to be excluded from her income. Her employer reports the value of this service as $3,000 for the year. This $3,000 is shown on her Form W-2 in box 10, but is not included in taxable wages in box 1.

  A neighbor cares for Joan's older child (Seth) after school, on holidays, and during the summer. Joan pays her neighbor $2,400 for this care.

  Joan figures her credit on Form 2441 as follows.

You are a qualified individual for this credit if you are a U.S. citizen or resident alien, and either of the following applies.

To determine if you can claim the credit, you must consider two income limits. The first limit is the amount of your adjusted gross income (AGI). The second limit is the amount of nontaxable social security and other nontaxable pensions you received. The limits are shown in Figure 32-B.

If both your AGI and nontaxable pensions are less than the income limits, you may be able to claim the credit. See Figuring the Credit Yourself , later.

To figure the credit, you must first determine your initial amount using lines 10 through 12. See Table 32-1 . Your initial amount is on line 12.

Step 2 is to figure the total amount of nontaxable social security and certain other nontaxable payments you received during the year. You must reduce your initial amount by these payments.

Enter these nontaxable payments on lines 13a or 13b, and total them on line 13c. If you are married filing jointly, you must enter the combined amount of nontaxable payments both you and your spouse receive.

You also must reduce your initial amount by your excess adjusted gross income. Figure your excess adjusted gross income on lines 14–17.

You figure your excess adjusted gross income as follows:

To determine if you can take the credit, you must add (on line 18) the amounts you figured in Step 2 (line 13c) and Step 3 (line 17).

Subtract the amount determined in Step 4 (line 18) from the amount determined in Step 1 (line 12) and multiply the result by 15% (.15).

In certain cases, the amount of your credit may be limited. See Limit on credit , later.

  If you are a U.S. citizen or U.S. national and your adopted child lived with you all year as a member of your household in 2011, that child meets condition (7) above to be a qualifying child for the child tax credit.

  There are also exceptions for kidnapped children and children of divorced or separated parents. For details, see Residency Test in chapter 3.

You must reduce your child tax credit if either (1) or (2) applies.

  If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both.

  If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year.

  Certain educational institutions located outside the United States also participate in the U.S. Department of Education's Federal Student Aid (FSA) programs.

  Generally, qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Therefore, you are treated as having paid expenses that were paid from your dependent student's earnings, gifts, inheritances, savings, etc.

   Figure 34-A may be helpful in determining if you can claim an education credit on your tax return.

You cannot do any of the following.

If you pay qualified education expenses with certain tax-free funds, you cannot claim an education credit for those amounts. You must reduce the qualified education expenses by the amount of any tax-free educational assistance and refund(s) you received.

If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. You must also qualify to claim the EIC by meeting all the rules described in this chapter.

However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. For example, if your arithmetic is incorrect, the IRS can correct it. If you do not provide a correct social security number, the IRS can deny the EIC. These kinds of errors are called math or clerical errors.

If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. If your error was due to fraud, then you cannot claim the EIC for the next 10 years.

To claim the EIC, you (and your spouse if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Any qualifying child listed on Schedule EIC also must have a valid SSN. (See Rule 8 if you have a qualifying child.)

If your social security card (or your spouse's if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. An example of a federally funded benefit is Medicaid.

If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U.S. citizen or permanent resident, ask the SSA for a new social security card without the legend.

If you are married, you usually must file a joint return to claim the EIC. Your filing status cannot be “Married filing separately.”

If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. You can use that filing status only if one spouse is a U.S. citizen or resident alien and you choose to treat the nonresident spouse as a U.S. resident. If you make this choice, you and your spouse are taxed on your worldwide income. If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). If you need more information on making this choice, get Publication 519, U.S. Tax Guide for Aliens.

You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. U.S. possessions are not foreign countries. See Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, for more detailed information.

You cannot claim the earned income credit unless your investment income is $3,150 or less. If your investment income is more than $3,150, you cannot claim the credit. For most people, investment income is the total of the following amounts.

If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2.

However, see Rule 6 in chapter 1 of Publication 596 if:

This credit is called the “earned income” credit because, to qualify, you must work and have earned income. If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. If you are an employee, earned income includes all the taxable income you get from your employer. If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040.

Your child is a qualifying child if your child meets four tests. The four tests are:

The four tests are illustrated in Figure 35-1. The paragraphs that follow contain more information about each test.

Sometimes a child meets the tests to be a qualifying child of more than one person. Although the child meets the tests to be a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child. Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit).

The other person cannot take any of these benefits based on this qualifying child. In other words, you and the other person cannot agree to divide these tax benefits between you. The other person cannot take any of these tax benefits unless he or she has a different qualifying child.

The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return.

Examples. The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child.

You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc.) if all of the following statements are true.

For more details about the tests to be a qualifying child, see Rule 8 .

If you (or your spouse, if filing a joint return) are a qualifying child of another taxpayer, you cannot claim the EIC. This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A).

You must be at least age 25 but under age 65 at the end of 2011. If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2011. It does not matter which spouse meets the age test, as long as one of the spouses does.

If neither you nor your spouse meets the age test, you cannot claim the EIC. Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ).

If you are not filing a joint return, you meet this rule if:

If you are filing a joint return, you meet this rule if:

If you are not sure whether someone else can claim you (or your spouse if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3.

If someone else can claim you (or your spouse if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit.

You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc.) if all of the following statements are true.

For more details about the tests to be a qualifying child, see Rule 8 .

If you (or your spouse if filing a joint return) are a qualifying child of another taxpayer, you cannot claim the EIC. This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ).

Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year.

If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ).

Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Employee pay is earned income only if it is taxable. Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Earned income is explained in detail in Rule 7 .

To figure the EIC yourself, use the EIC Worksheet in the instructions for the form you are using (Form 1040, Form 1040A, or Form 1040EZ). If you have a qualifying child, complete schedule EIC and attach it to your return.

John and Janet Smith are married and will file a joint return. They have one child, Amy, who is 3 years old. Amy lived with John and Janet for all of 2011. John worked and earned $9,500. Janet worked part of the year and earned $1,500. Their earned income and AGI are $11,000. John and Janet qualify for the earned income credit and fill out the EIC Worksheet and Schedule EIC. The Smiths will attach Schedule EIC to Form 1040A when they send their completed return to the IRS.

They took the following steps to complete Schedule EIC and the EIC Worksheet.

Kelly Green is age 30 and a full-time student. She lived with her parents in the United States for all of 2011. She had a part-time job and earned $6,240. She earned $20 interest on a savings account. She is not eligible to be claimed as a dependent on her parents' return. Although she lived with her parents, she is not their qualifying child because she does not meet the age test. She does not have any children.

Kelly qualifies for the earned income credit. Kelly will file Form 1040EZ and complete the EIC Worksheet.

You may be able to take this credit if you place a qualified fuel cell vehicle in service in 2011. The credit is also allowed for the cost of converting a vehicle to a qualified plug-in electric drive vehicle.

The credit has expired for advanced lean burn technology vehicles, qualified hybrid vehicles, and qualified alternative fuel vehicles purchased after 2010. You cannot claim the credit on your 2011 return for these vehicles. However, you may be able to claim the credit for one of these vehicles purchased in 2010 but not placed in service until 2011.

You may be able to take a credit if you place qualified alternative fuel vehicle refueling property in service in 2011.

Tax credit bonds are bonds in which the holder receives a tax credit in lieu of some or all of the interest on the bond.

You may be able to take a credit if you are a holder of one of the following bonds.

In some instances, an issuer may elect to receive a credit for interest paid on the bond. If the issuer makes this election, you cannot also claim a credit.

You generally can choose to take income taxes you paid or accrued during the year to a foreign country or U.S. possession as a credit against your U.S. income tax. Or, you can deduct them as an itemized deduction (see chapter 22).

You cannot take a credit (or deduction) for foreign income taxes paid on income that you exclude from U.S. tax under any of the following.

The mortgage interest credit is intended to help lower-income individuals own a home. If you qualify, you can take the credit each year for part of the home mortgage interest you pay.

The tax laws give special treatment to some kinds of income and allow special deductions and credits for some kinds of expenses. If you benefit from these laws, you may have to pay at least a minimum amount of tax in addition to any other tax on these items. This is called the alternative minimum tax.

The special treatment of some items of income and expenses only allows you to postpone paying tax until a later year. If in prior years you paid alternative minimum tax because of these tax postponement items, you may be able to take a credit for prior year minimum tax against your current year's regular tax.

You may be able to take a credit against your regular tax if for 2010 you had:

You may be able to take this credit if you placed in service for business or personal use a qualified plug-in electric drive motor vehicle in 2011.

Generally, you can rely on the manufacturer's certification that a vehicle qualifies for the credit. In the case of a foreign manufacturer, you generally can rely on its domestic distributor's certification.

You may be able to take this credit if you acquired a qualified plug-in electric vehicle in 2011. For this credit, the vehicle can have 2, 3, or 4 wheels. A vehicle with 4 wheels must be a low speed vehicle.

Generally, you can rely on the manufacturer's certification that a vehicle qualifies for the credit. In the case of a foreign manufacturer, you generally can rely on its domestic distributor's certification.

You may be able to take one or both of the following credits if you made energy saving improvements to your home located in the United States in 2011.

If you are a member of a condominium management association for a condominium you own or a tenant-stockholder in a cooperative housing corporation, you are treated as having paid your proportionate share of any costs of the association or corporation for purposes of these credits.

Qualified energy efficiency improvements are the following improvements that are new, can be expected to remain in use at least 5 years, and meet certain requirements for energy efficiency.

Residential energy property is any of the following.

You may be able to take this credit if you, or your spouse if filing jointly, made:

However, you cannot take the credit if either of the following applies.

You may be able to take a tax credit of up to $13,360 for qualified expenses paid to adopt an eligible child. The credit may be allowed for the adoption of a child with special needs even if you do not have any qualified expenses.

If your modified adjusted gross income (AGI) is more than $185,210, your credit is reduced. If your modified AGI is $225,210 or more, you cannot take the credit.

You must include in your income any amounts that regulated investment companies (commonly called mutual funds) or real estate investment trusts (REITs) allocated to you as capital gain distributions, even if you did not actually receive them. If the mutual fund or REIT paid a tax on the capital gain, you are allowed a credit for the tax since it is considered paid by you. The mutual fund or REIT will send you Form 2439 showing your share of the undistributed capital gains and the tax paid, if any. Take the credit for the tax paid by entering the amount on Form 1040, line 71, and checking box a. Attach Copy B of Form 2439 to your return.

For most people, this credit is not available for homes purchased in 2011. Members of the uniformed services or Foreign Service and employees of the intelligence community may still be able to claim the credit.

In general, you can claim the credit only if you meet all three of the following requirements.

You may be able to take this credit for any month in which all the following statements were true on the first day of the month.

But, you cannot take the credit if you can be claimed as a dependent on someone else's 2011 tax return. If you meet all of these conditions, you may be able to claim the tax credit for amounts you paid directly to a qualified health plan for you and any qualifying family members. The tax credit is 80% for payments made in January and February; the tax credit is 72.5% for payments made in March through December. You cannot take the credit for insurance premiums on coverage that was actually paid for with a National Emergency Grant. The amount you paid for qualified health insurance coverage must be reduced by any Archer MSA and health savings account distributions used to pay for the coverage.

You can take this credit on your tax return or have it paid on your behalf in advance to your insurance company. If the credit is paid on your behalf in advance, that amount will reduce the amount of the credit you can take on your tax return.

If you paid the alternative minimum tax for 2010 or you had a minimum tax credit carryforward to 2011, you may be able to take a credit for prior year minimum tax. For information about the nonrefundable credit for prior year minimum tax you may be able to take, see Nonrefundable Credit for Prior Year Minimum Tax , earlier. However, for 2011, you may qualify for a refundable credit for prior year minimum tax if you had a minimum tax credit carryforward to 2009 (on your 2008 Form 8801, line 31) and you have not used all of that carryforward, even if the total amount of your current year credit is more than your total tax liability. To figure the amount of any 2011 refundable credit, complete Part IV of Form 8801. Include any refundable credit on Form 1040, line 71, and check box c.

Most employers must withhold social security tax from your wages. If you work for a railroad employer, that employer must withhold tier 1 railroad retirement (RRTA) tax and tier 2 RRTA tax.

If you worked for two or more employers in 2011, you may have had too much social security or tier 1 RRTA tax withheld from your pay. You can claim the excess social security or tier 1 RRTA tax as a credit against your income tax. The following table shows the maximum amount of wages subject to tax and the maximum amount of tax that should have been withheld for 2011.

All wages are subject to Medicare tax withholding. 

Use Form 843, Claim for Refund and Request for Abatement, to claim a refund of excess tier 2 RRTA tax. Be sure to attach a copy of all of your W-2 forms. Use Worksheet 3-3 in Publication 505, Tax Withholding and Estimated Tax, to help you figure the excess amount.