User's Manual - Drake Software

Drake Software User’s Manual
Additional Child Tax Credit and Combat Pay
amount to override the W-2 amount. To force combat pay to be included in calculating
EIC, select Include combat pay in EIC calculation.
NOTE
Combat pay entered on the W2 screen, Box 12, with a code of “Q”
(“nontaxable combat pay”) is automatically accounted for in the program
calculation. If you enter a combat pay amount on the 8812
screen, this amount overrides the W2 amount.
Blocking EIC Calculations
In some cases, a taxpayer may not be eligible for EIC, even though the information on
the tax return indicates otherwise. To block the program from calculating EIC, type NO
into the EIC Blocker on the EIC screen.
Additional Child Tax Credit and Combat Pay
Other Payments
The 8812 screen contains override fields for the following items:
• Combat pay that is applicable to Additional Child Tax Credit and EIC
• Total earned income for Form 8812, Additional Child Tax Credit
The program automatically calculates the amount for earned income. If Form 8812
applies, the program makes the calculations and generates the form. Use the Additional
Child Tax Credit section on the 8812 screen only if you must override the calculation
for total earned income. See “EIC and Combat Pay” on page 156.
Use the following screens to enter other payments from credits.
Table 5-15: Other Payments from Credits
Screen
Name of Form
2439 Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains
4136 Form 4136, Credit for Federal Tax Paid on Fuels
8801 Form 8801, Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts
8885 Form 8885, Health Coverage Tax Credit
With the exception of the Form 4136 amount, these amounts flow to the “Credits from
Form:” line of Form 1040. The amount from Form 4136 flows to the “Credit for federal
tax on fuels” line.
NOTE
Use the Other payments field on screen 5 to force an amount to flow to
the “Credits from Form:” line of Form 1040. Be aware that no documentation
justifying the forced amount is included with the return when
using this field.
Tax Year 2012 157