Child and dependent care expenses
A caution has been issued by the IRS in the past week about the following documents:

• 2002 and 2003 versions of Instructions for Form 2441 Child and Dependent Care Expenses
  
  
• 2002 and 2003 versions of Schedule 2 (Form 1040A) Child and Dependent Care Expenses for Form 1040A Filers
  
  
• 2002 and 2003 versions of Publication 503 Child and Dependent Care Expenses

The definition of earned income in the 2002 and 2003 instructions for Form 2441 and Schedule 2 (Form 1040A) and in Publication 503 incorrectly omitted non-taxable earned income. The definition of earned income has been corrected in the 2004 versions of the instructions for Form 2441 and Schedule 2 (Form 1040A) and in Publication 503.

As a result, taxpayers who claimed the credit for child and dependent care expenses in 2002 or 2003 may be entitled to a larger credit. Form 1040X Amended U.S. Individual Income Tax Return is used for this purpose. Generally, it must be filed within 3 years after the date of filing the original return or within 2 years after paying the tax, whichever is later.

(The 2004 version of publication 503 will be available mid-December)

Further information:
www.irs.gov/formspubs/article/0,,id=109875,00.html
www.irs.gov/pub/irs-pdf/i2441.pdf
www.irs.gov/pub/irs-pdf/i1040as2.pdf
www.irs.gov/pub/irs-pdf/f1040x.pdf



2005 Form W2
A new code, Code Y - Deferrals under a section 409A nonqualified deferred compensation plan, for use in box 12 has been added to the 2005 Form W-2 and the 2005 Instructions for Forms W-2 and W-3.

The American Jobs Creation Act of 2004 added section 409A to the Internal Revenue Code. Section 409A generally takes effect after December 31, 2004, and requires employers to report annual deferrals under a nonqualified deferred compensation plan on each employee's Form W-2. The deferred amounts should be reported in box 12 of Form W-2, using Code Y.

It is expected that a replication of the 2005 Form W-2 and its separate instructions will be available on the IRS website in mid-December. Form W-2 is NOT a fillable PDF form.

Further information:
www.irs.gov/formspubs/article/0,,id=109875,00.html



2004 Publication 17
A caution has been issued by the IRS in the past week about the Publication 17 Your Federal Income Tax.

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...back to 25 November 2004

Further information:
www.irs.gov/formspubs/article/0,,id=109875,00.html
www.irs.gov/pub/irs-pdf/p17.pdf