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IRS.gov Website
Publication 17
taxmap/pub17/p17-189.htm#en_us_publink1000174888

Refundable Credits(p246)

rule
The credits discussed in this part of the chapter are treated as payments of tax. If the total of these credits, withheld federal income tax, and estimated tax payments is more than your total tax, the excess can be refunded to you.
taxmap/pub17/p17-189.htm#en_us_publink1000174965

Credit for Tax on Undistributed Capital Gain(p246)

rule
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 didn't 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.
taxmap/pub17/p17-189.htm#en_us_publink1000280459

How to take the credit.(p246)

rule
To take the credit, attach Copy B of Form 2439 to your Form 1040. Include the amount from box 2 of your Form 2439 in the total for Form 1040, line 73, and check box a.
taxmap/pub17/p17-189.htm#en_us_publink1000261333

More information.(p246)

rule
See Capital Gain Distributions in chapter 8 for more information on undistributed capital gains.
taxmap/pub17/p17-189.htm#en_us_publink100036060

Health Coverage Tax Credit(p246)

rule
The health coverage tax credit, which was previously claimed on Form 8885, has been reinstated. You may elect to take this credit only if (a) you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension payee (defined later); or you were a qualified family member of one of these individuals who passed away or finalized a divorce with you, (b) you can't be claimed as a dependent on someone else's 2015 tax return, and (c) you have met all of the conditions listed on line 1 of Form 8885.
taxmap/pub17/p17-189.htm#en_us_publink100036061

Amount of the credit.(p246)

rule
If you meet all of these conditions, you may elect to take a credit of up to 72.5% of the amount you paid directly to a qualified health plan for you and any qualifying family members.
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.
EIC
This election to take a credit for amounts paid directly to a qualified health plan in any eligible month during the tax year will apply to all subsequent months for which you met the eligibility requirements. The election can’t be changed once made.
taxmap/pub17/p17-189.htm#en_us_publink100036063

TAA recipient.(p246)

rule
You were an eligible TAA recipient on the first day of the month if, for any day in that month or the prior month, you:
taxmap/pub17/p17-189.htm#en_us_publink100036064

Example.(p246)

You received a trade adjustment allowance for January 2015. You were an eligible TAA recipient on the first day of January and February.
taxmap/pub17/p17-189.htm#en_us_publink100036065

ATAA recipient.(p246)

rule
You were an eligible ATAA recipient on the first day of the month if, for that month or the prior month, you received benefits under an ATAA program for older workers established by the Department of Labor.
taxmap/pub17/p17-189.htm#en_us_publink100036066

Example.(p247)

You received benefits under an ATAA program for older workers for October 2015. The program was established by the Department of Labor. You were an eligible ATAA recipient on the first day of October and November.
taxmap/pub17/p17-189.htm#en_us_publink100036067

RTAA recipient.(p247)

rule
You were an eligible RTAA recipient on the first day of the month if, for that month or the prior month, you received benefits under a RTAA program for older workers established by the Department of Labor.
taxmap/pub17/p17-189.htm#en_us_publink100036068

PBGC pension payee.(p247)

rule
You were an eligible PBGC pension payee on the first day of the month, if both of the following apply.
  1. You were age 55 or older on the first day of the month.
  2. You received a benefit for that month paid by the PBGC under title IV of the Employee Retirement Income Security Act of 1974 (ERISA).
If you received a lump‐sum payment from the PBGC after August 5, 2002, you meet item (2) above for any month that you would have received a PBGC benefit if you had not received the lump‐sum payment.
taxmap/pub17/p17-189.htm#en_us_publink100036069

How to take the credit.(p247)

rule
The HCTC is an election. You make your election by checking the box on line 1 of Form 8885 for the first month you are electing to take the HCTC. Once you elect to take the HCTC for a month in 2015, the election to take the HCTC applies to all subsequent months in 2015 and you must check those boxes on line 1 of Form 8885. The election doesn't apply to any month you aren't qualified to take the HCTC. The election must be made by the time you file your tax return (including extensions). Once made, the election is irrevocable.
Once you have completed Form 8885, attach it to your Form 1040. Include your credit in the total for Form 1040, line 73, and check box c.
You must attach health insurance bills (or COBRA payment coupons) and proof of payment for any amounts you include on Form 8885, line 2. For details, see Pub. 502 or Form 8885.
EIC
Qualified health plans purchased through a Health Insurance Marketplace also qualify for the premium tax credit taken on Form 8962, Premium Tax Credit (PTC). However, you can’t take both the HCTC and PTC for the same qualified health plan in the same coverage month. For information on qualified health plans purchased through a Health Insurance Marketplace and the premium tax credit, see the Instructions for Form 8962.
taxmap/pub17/p17-189.htm#en_us_publink100036071

More information.(p247)

rule
For definitions and special rules, including those relating to qualified health insurance plans, qualifying family members, the effect of certain life events, and employer‐sponsored health insurance plans, see Pub. 502 and the Instructions for Form 8885.
taxmap/pub17/p17-189.htm#en_us_publink1000174990

Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld(p247)

rule
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 2015, you may have had too much social security tax withheld from your pay. If one or more of those employers was a railroad employer, too much tier 1 RRTA tax may also have been withheld at the 6.2% rate. You can claim the excess social security or tier 1 RRTA tax as a credit against your income tax when you file your return. For the tier 1 RRTA tax, only use the portion of the tier 1 RRTA tax that was taxed at the 6.2% rate when figuring if excess tier 1 RRTA tax was withheld; don't include any portion of the tier 1 RRTA tax that was withheld at the Medicare tax rate (1.45%) or the Additional Medicare Tax rate (0.9%). The following table shows the maximum amount of wages subject to tax and the maximum amount of tax that should have been withheld for 2015.
Type of taxMaximum
wages
subject to tax
Maximum tax
that should
have been
withheld
Social security or RRTA tier 1$118,500$7,347
RRTA tier 2$ 88,200$4,321.80
EIC
All wages are subject to Medicare tax withholding.
Deposit
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 Pub. 505, Tax Withholding and Estimated Tax, to help you figure the excess amount.
taxmap/pub17/p17-189.htm#en_us_publink1000174994

Employer's error.(p247)

rule
If any one employer withheld too much social security or tier 1 RRTA tax, you can't take the excess as a credit against your income tax. The employer should adjust the tax for you. If the employer doesn't adjust the overcollection, you can file a claim for refund using Form 843.
taxmap/pub17/p17-189.htm#en_us_publink1000174995

Joint return.(p247)

rule
If you are filing a joint return, you can't add the social security or tier 1 RRTA tax withheld from your spouse's wages to the amount withheld from your wages. Figure the withholding separately for you and your spouse to determine if either of you has excess withholding.
taxmap/pub17/p17-189.htm#en_us_publink1000174996

How to figure the credit if you didn't work for a railroad.(p247)

rule
If you didn't work for a railroad during 2015, figure the credit as follows:
1. Add all social security tax withheld (but not more than $7,347 for each employer). Enter the total here
2. Enter any uncollected social security tax on tips or group-term life insurance included in the total on Form 1040, line 62, identified by "UT"
3. Add lines 1 and 2. If $7,347 or less, stop here. You can't take
the credit
4. Social security tax limit 7,347
5. Credit. Subtract line 4 from line 3. Enter the result here and on Form 1040, line 71 (or Form 1040A, line 46) $
taxmap/pub17/p17-189.htm#en_us_publink1000174998

Example.(p247)

You are married and file a joint return with your spouse who had no gross income in 2015. During 2015, you worked for the Brown Technology Company and earned $66,500 in wages. Social security tax of $4,123 was withheld. You also worked for another employer in 2015 and earned $55,000 in wages. $3,410 of social security tax was withheld from these wages. Because you worked for more than one employer and your total wages were more than $118,500, you can take a credit of $186 for the excess social security tax withheld.
1. Add all social security tax withheld (but not more than $7,347 for each employer). Enter the total here$7,533
2. Enter any uncollected social security tax on tips or group-term life insurance included in the total on Form 1040, line 62, identified by "UT"   -0- 
3. Add lines 1 and 2. If $7,347 or less, stop here. You can't take the credit  7,533
4. Social security tax limit  7,347
5. Credit. Subtract line 4 from line 3. Enter the result here and on Form 1040, line 71 (or Form 1040A, line 46)  $186
taxmap/pub17/p17-189.htm#en_us_publink1000175000

How to figure the credit if you worked for a railroad.(p247)

rule
If you were a railroad employee at any time during 2015, figure the credit as follows:
1. Add all social security and tier 1 RRTA tax withheld at the 6.2% rate (but not more than $7,347 for each employer). Enter the total here
2. Enter any uncollected social security and tier 1 RRTA tax on tips or group-term life insurance included in the total on Form 1040, line 62, identified by "UT"
3. Add lines 1 and 2. If $7,347 or less, stop here. You can't take
the credit
4. Social security and tier 1 RRTA
tax limit
7,347
5. Credit. Subtract line 4 from line 3. Enter the result here and on Form 1040, line 71 (or Form 1040A, line 46)$
taxmap/pub17/p17-189.htm#en_us_publink1000175002

How to take the credit.(p248)

rule
Enter the credit on Form 1040, line 71, or include it in the total for Form 1040A, line 46.
taxmap/pub17/p17-189.htm#en_us_publink1000260898

More information.(p248)

rule
For more information on the credit, see Pub. 505.