As a general rule, your rebate check will be equal to five percent of the first $12,000 of "taxable income" minus that which is excluded from but not limited to that which you claim under your Schedule B (Form 1045). You can use Schedule B (Form 1045) to figure your modified taxable income for carryback years and your carryover from each of those years, however, do not use Schedule B for a carryforward year, i.e. if your 2001 return includes an NOL deduction from an NOL year before 2001 that reduced your taxable income to zero (to less than zero, if an estate or trust), see NOL Carryover From 2001 to 2002, later. on a joint return, $10,000 for heads of household and $6,000 for singles. Taxable income is the amount after your deductions and personal exemptions stated on look at Form 1040 line 39, 1040A line 25, 1040EZ line 6, or line K on the TeleFile Tax Record, however, if your taxable income is less than $100,000, you do not compute the tax yourself, rather, the math has been done for you in the Tax Table that is included in the instructions to the tax form. Claimants refer to the Tax Table unless one or more of the following is true.1.Your taxable income is $100,000 or more. In that case, use Tax Rate Schedule X. 2.You are required to use Form 8615, Schedule D (Form 1040), or the Capital Gain Tax Worksheet (in the Form 1040 instructions) but only if you do not claim exemption from Foreign Tax Credit whereby you will not be subject to this limit and will be able to claim the credit without using Form 1116 (PDF) if the following requirements are met. 1.Your only foreign source gross income for the tax year is passive income. Passive income is defined later under Separate Limit Income. However, for purposes of this rule, high taxed income and export financing interest are also passive income. Passive income also includes income that would be passive except that it is also described in another income category 2.Your qualified foreign taxes for the tax year are not more than $300 ($600 if filing a joint return) 3.All of your gross foreign income and the foreign taxes are reported to you on a payee statement (such as a Form 1099-DIV or 1099-INT) Your foreign tax credit cannot be more than your total U.S. tax liability (line 40, Form 1040) multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. To determine the limit, you must separate your foreign source income into categories, as discussed under Separate Limit Income. The limit treats all foreign income and expenses in each separate category as a single unit and limits the credit to the U.S. income tax on the taxable income in that category from all sources outside the United States.
Hope this clears it up. [:D]