New Tax Credit for Phone Customers!
by: This content was adapted from materials provided by Montana Legal Aid
GET MORE MONEY WHEN YOU FILE YOUR 2006 RETURN
You may be able to get more money when you file your tax return for 2006.
Did you have a long distance phone (including a cell phone) in the past 3 years? If so you can take advantage of a new tax credit.
What is this new tax credit?
On your 2006 federal income tax return (this would be the ones you file by April 15, 2007) you can claim a credit for the amount of tax you paid for long distance in the last 3 years.
You can also claim interest on any money you paid for this tax after February 29, 2003.
If you get a tax refund this credit it will be added on to your refund amount. If you owe taxes you can subtract it from what you owe.
Where did this new tax credit come from?
In the past, the IRS made phone companies charge long-distance customers an extra tax.
This tax was called an excise tax. If you had long distance service you paid this tax as part of your phone bill.
In August of 2006 the courts decided that the excise tax was not OK. They ordered the IRS to stop collecting the tax. They also ordered the IRS to give the money back to phone customers.
How do I get this new tax credit? What dates does the credit cover?
The tax credit covers the period from February 2003 through August 2006. If you have all your old bills beginning on February 29, 2003 look at them.
You can claim a credit for the amount you paid in excise tax for long distance service. You can also claim credit for interest on the money.
What if I dont have all my old phone bills?
If you dont have your old phone bills, you can still get the credit. You can do this by claiming a standard amount.
The amount you can claim changes depending on how you file your return. The more exemptions you claim, the higher your credit will be.
If you claim.....
- 1 exemption, you can claim a $30 credit
- 2 exemptions, you can claim a $40 credit
- 3 exemptions, you can claim a $50 credit
- 4 or more exemptions, you can claim a $60 credit
What tax forms should I use?
You can file for the credit on your 2006 federal tax return form. The 1040, 1040A or 1040EZ
tax forms all have instructions for this credit.
If you do not have to file a tax return you can still get this credit. Use the new Form 1040EZ-T,
Claim for Refund of Telephone Excise Tax.
Do I have to have a house phone or a land line in order to get the credit?
No. You may still be able to get the credit if you have used any of the following services:
- Standard land-line telephone with long-distance service (like your house phone)
- Cell phone service
- Internet long-distance calling plans
How come I never heard of this credit before?
It is estimated that 15 million households had phone service in recent years but did not file federal tax returns.
Most of these households were low-income. Half were headed by someone over age 65.
Many customers who do not file tax returns may not know about this credit or may need help filing for it.
Where can I get help with my taxes?
Low income, the differently-abled, and senior citizens can get free help with their taxes.
There is an IRS sponsored Volunteer Income Tax Assistance (VITA) site located at the Albany Public Library Laramie.
For information on this program, click here or call the Albany Public Library at (307) 721-2480
If you would like to see if you can find another Wyoming location where you can get free tax help call the IRS at 1-800-829-1040.
Does this fact sheet tell me EVERYTHING I need to know?
Not necessarily. Fact sheets can provide you with good information. They are not the complete answer to every problem. If have any questions see a tax expert for advice. You can also contact one of the phone numbers listed above.
Will this fact sheet apply to my 2008 tax return?
No. This fact sheet applies only to tax year 2006.
Remember, income tax returns must be filed by April 15th, 2007.
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