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Review

Review. Topics Suggested by Instructors. SS vs SSDI vs SSI. Social Security Retirement payments Reduced benefits at 62 Full benefits at 65, 66, 67, ??? Financed through payroll tax Up to 85% MAY be taxable – it depends. SS vs SSDI vs SSI. Social Security Disability Insurance

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Review

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  1. Review Topics Suggested by Instructors

  2. SS vs SSDI vs SSI • Social Security • Retirement payments • Reduced benefits at 62 • Full benefits at 65, 66, 67, ??? • Financed through payroll tax • Up to 85% MAY be taxable – it depends

  3. SS vs SSDI vs SSI • Social Security Disability Insurance • Payments to workers that become disabled • Financed through payroll taxes • Can collect until minimum retirement age • Entered on line 7 as earned income • After min retirement age – becomes retirement income • Entered line 16

  4. SS vs SSDI vs SSI • SSI • Supplemental Security Income • For disabled with little or no income • Administered by Social Security Admin • NOT TAXABLE • Financed through “general revenues” • Clients frequently ask about children’s SSI

  5. NYS Retirement Exemption • NYS Subtractions – Line 26 • NYS, local, or federal pension • Includes State and City Universities • State pension from outside NYS not eligible • NYS or Federal pension received via ex-spouse • How do you know?? • Ask client • If not obvious and client doesn’t know • Give client opportunity to find out • Assume not a full subtraction but eligible for 20K subtraction – line 29 • Explain to client

  6. NYS $20K Income Exclusion • Non NYS, local or Fed pensions • Is non gov’t pension received via ex-spouse eligible? • No – not from employer – employee relationship

  7. 1099-R – Taxable?

  8. 1099-R – Taxable? • Payer should provide taxable amount unless reasonably unable to • If unable to – box 2a left blank

  9. 1099-R – Taxable? • For Pension -If box 2b “Taxable amount not determined” is checked – 2a is blank • For Traditional, SEP, or SIMPLE IRA • Payer not required to determine taxable amount • Box 2a will be same as box 1

  10. 1099-R – Taxable? • If 2a is blank – Interview client • Contributions • Date of retirement • Date started collecting • Was it spouse’s pension • Connection to NYS subtraction

  11. 1099-R – Taxable? • If client cannot provide adequate answers: • Give client option to go away and come back with answers • Assume all taxable • Explain assumption to client • Worst thing to happen – additional refund or owe less

  12. 414HSUB • This year TW will accept 414H • Eligible for Retirement Savings Credit form 8880?

  13. 414HSUB • NOT eligible for 8880 • Not a voluntary contribution

  14. Energy Credits • Non-business energy property credit • Improvements made for main home • Covers energy efficient • Windows • Doors • Insulation • Some metal and asphalt roofs • Cannot include prep and/or installation

  15. Energy Credit • Non-business energy property credit • Can include • Heat pumps • Air conditioners • Water heaters • Stoves that burn bio-mass • Prep and installation

  16. Energy Credit • Credit is 30% of eligible costs up to $1500 • $1500 is total of 2009 & 2010 credit • If took $1000 credit in 2009 – can only take up to $500 in 2010 • Claimed on form 5695 Part I

  17. Energy Credit • Residential Energy Efficient Property Credit • Covers • Solar • Wind • Geothermal • Form 5695 Part II • OUT OF SCOPE

  18. NY Volunteer Preparers – Common Errors Sheet from NYS

  19. NYS Credits Check • Bob Parsons sheet – New York Credits Check List

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