Mississippi Form 80-108 Instructions
For the year 2013, Form 80-108 includes Schedule A - Itemized Deductions; Schedule B - Interest & Dividends Income; Voluntary Contribution Check-Offs; Income (Loss) from Rents, Royalties, Partnerships, S Corporations, Trusts & Estates and Schedule N - Other Income (Loss) and Supplemental Income . Information for completing Schedule A is transferred from Federal Form 1040 Schedule A. If you filed your federal return using the standard deduction and wish to itemize deductions for Mississippi purposes, please use a Federal Form 1040 Schedule A as a worksheet and transfer the information from the specific lines indicated to the Mississippi Schedule A.
SCHEDULE A - ITEMIZED DEDUCTIONS
Individual taxpayers may elect to either itemize their individual nonbusiness deductions or claim a standard deduction. If your itemized personal deductions are greater than the standard deduction for your filing status (see instructions for line 14), it will be to your advantage to complete and file Schedule A. If the standard deduction for your filing status is greater than the amount of itemized deductions you can substantiate, it is to your advantage to claim a standard deduction.
Line 1: Federal Adjusted Gross Income
Enter the amount reported on Federal Form 1040, line 38.
Lines 2a through 2c: Medical and Dental Expenses
The instructions included with your federal return should be used in determining your medical deduction. You should base your 10% limitation, line 2b, on your federal adjusted gross income from your federal income tax return. Enter the amounts from Federal Form 1040, Schedule A. Subtract 10% of Federal AGI on line 2b. However, if either you or your spouse was born before January 2, 1949, you can deduct the part of your medical and dental expenses that exceeds 7.5% of Federal AGI on line 2b.
If line 2b is more than line 2a, enter zero on line 2c.
Lines 3a through 3c: Taxes Paid
State income taxes paid or any other taxes allowed in lieu of federal purposes including withholding taxes on Mississippi gaming winnings, are not deductible as an itemized deduction. These amounts should be subtracted on line 3b. Also, you cannot deduct federal income tax or Social Security tax. Enter amounts from Federal Form 1040, Schedule A.
Line 4: Interest Paid
Federal income tax limitations with regard to interest expense apply fully to Mississippi income tax. Enter only interest expense deductible for federal income tax purposes. Enter amount from Federal Form 1040, Schedule A.
Line 5: Gifts to Charity
You can deduct what you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. The amounts you deduct are subject to the federal limitations. Enter amount from Federal Form 1040, Schedule A.
Line 6: Casualty and Theft Losses
A casualty or theft loss is computed on the same basis and subject to the same limitations as under federal law. Use federal instructions included with your federal tax return to determine your loss. Federal Form 4684 must be attached.
For information about federal disaster area losses, including the election to claim a casualty loss deduction for the tax year(s) proceeding the year of the casualty, net casualty loss carrybacks and carryovers, contact the Department of Revenue. Enter amount from Federal Form 1040, Schedule A.
Lines 7a through 7d - Job Expenses and most Other Miscellaneous Deductions
You may deduct certain miscellaneous expenses authorized by federal law and regulations such as educational expenses and employee expenses, but only to the extent that such expenses exceed the 2% federal adjusted gross income limit. Enter amount from Federal Form 1040, Schedule A. Subtract 2% of federal AGI on line 7b. If line 7c is more than lines 7a and 7b, enter zero on line 7d.
Lines 8a through 8c - Other Miscellaneous Deductions
Other miscellaneous expenses not subject to the 2% federal adjusted gross income limit are deductible on line 8. Refer to federal instructions to determine type and amount. Enter amount from Federal Form 1040, Schedule A. Mississippi gaming losses are not deductible and should be subtracted on line 8b.
Line 9: Mississippi Itemized Deductions
Add the total amounts for lines 2 through 8 (2c, 3c, 4, 5, 6, 7d and 8c).
Line 10: Limitation on Mississippi Itemized Deductions
If the federal AGI from Form 1040 is more than $300,000 (Married - Filing Joint or Combined Return), $275,000 (Head of Family), $250,000 (Single), and $150,000 (Married-Filing Separate), do not use the amount shown on line 9 above. You must use your Federal Schedule A to complete the Mississippi State Income Tax Adjustment Worksheet on the following page.
The amount determined on line 8 of the Worksheet should be entered here and on Form 80-108, Schedule A, line 10.
Mississippi State Income Tax Adjustment Worksheet
Note: To complete the worksheet shown on the following page, you will need to refer to your Federal Itemized Deductions Worksheet in your federal instructions.
|1. Enter total itemized deductions from Federal Schedule A, line 29||_____|
|2. Divide line 9 by line 3 on the Federal Itemized Deductions Worksheet||_____|
|3. Multiply state income taxes from Federal Schedule A, line 5 by line 2 above||_____|
|4. Subtract line 3 above from state income taxes from Federal Schedule A, line 5||_____|
|5. Subtract line 4 above from line 1 above||_____|
|6. Enter the amount of federal itemized gaming losses||_____|
|7. Enter the amount of non-Mississippi (residents only) gaming losses to the extent of non-Mississippi gaming income.||_____|
|8. Line 5 less line 6 plus line 7. Enter the result here and on Form 80-108, Schedule A, line 10||_____|
SCHEDULE B - INTEREST AND DIVIDEND INCOME
Report any interest you received or that was credited to your account so you could withdraw it. Examples are interest on savings or other bank accounts; interest on a promissory note, a mortgage, or a corporate bond or debenture; interest on state obligations other than the State of Mississippi or subdivisions thereof, etc. Interest income from obligations of the United States Government and the State of Mississippi and subdivisions thereof is exempt.
Line 1: Interest Income
Enter the total amount of interest income reported on Federal Form 1040, Schedule B, line 2.
Line 2: Amount of Mississippi Non-taxable Interest
Enter the amount of Mississippi non-taxable interest received on obligations of the United States or Mississippi or political subdivision from line 1.
Line 3: Total Mississippi Interest
Subtract line 2 from line 1. Enter the total here and on Form 80-105, line 40 or Form 80-205, line 41.
Report all dividend income received regardless of the amount. Include cash and the value of stock, property or merchandise you receive as a dividend. The payer should send you a Form 1099-DIV.
- Ordinary dividends. See Form 1099-DIV, Box 1a.
- Qualified dividends. See Form 1099-DIV, Box 1b.
- Nontaxable distributions. Some distributions are nontaxable because they are a return of your cost. They will not be taxed until you recover your cost. You must reduce your cost by these distributions. After you recover your cost, you must report these dividends as capital gains.
Note: Capital gain distributions reported on Form 1099-DIV. If you have other capital gains or losses, enter your capital gain distributions on Federal Schedule D. If you don't need Federal Schedule D to report any other gains or losses, report capital gain distributions on line 37 of Form 80-105 or line 38 of Form 80-205.
Line 4: Total Dividend Income
Enter the total amount of dividend income received.
Line 5: Amount of Nontaxable Distributions
Enter the amount of distributions included in line 4 above which would not be taxable for Mississippi purposes (example: interest on federal obligations included with dividends reported).
Line 6: Dividends for Mississippi
Subtract line 5 from line 4. Enter the result on Form 80-105, line 41 or Form 80- 205, line 42.
SCHEDULE N - OTHER INCOME (LOSS) AND SUPPLEMENTAL INCOME
Schedule N is used to report income or loss not reflected elsewhere on this return such as Non-Mississippi gambling winnings, prizes and awards, net operating loss carry forwards, etc. Explain the nature and source of each income or loss item. If the adjustment to income is not listed in lines 47 through 56, then the adjustment must be reported on Schedule N. You must give a description of the adjustment and enter the figure as a negative amount. Our system will not read the statements. Mississippi Gambling Income is no longer reported for Mississippi income tax.
Form 80-108, Schedule N may also be used to report differences between federal and state taxable income such as when the net profit or loss from a business (Schedule C) is different due to bonus depreciation adjustments. Attach a copy of Form 80-108 to your return. ALL INDIVIDUALS FILING FEDERAL SCHEDULES C, C-EZ, E, AND/OR F MUST INCLUDE A COPY OF EACH SCHEDULE AND MUST COMPLETE THIS SCHEDULE.
INCOME TAX CREDITS
General restrictions exist on the use of income tax credits on a Mississippi individual income tax return. Most often these credits will be passed through from an entity filing a Mississippi Partnership or S Corporation tax return.
The following will show the maximum credit allowed. Some of the credits do allow the unused portion to be carried forward for a period of time. If a taxpayer has more than one credit and/or more than one type of credit, the credits may be used in any sequence so as to obtain the greatest tax savings. Form 80-401 must be attached to your income tax return. If more than three income tax credits are claimed, attach a supplemental schedule and enter the total on line 3 of Form 80-401.
Ad Valorem Inventory Tax Credit. This credit is limited to the lesser of $5,000.00 per location or the income tax attributable to the location paying the ad valorem tax. This credit can be acquired in two ways, the first would be from a pass through entity and the second from a business whose income is being reported using a Schedule C in the individual tax return (if the credit is from a Schedule C then attach a copy of the ad valorem tax bills). This credit is calculated as follows: multiply the net income passing through from the entity or the income off the Schedule C by the effective tax rate/rates (starting at your highest effective tax rate then work down if some of the business income is taxed at 4% and/or 3%). Any unused credit may be carried over for five years. Any expenses on which the credit is calculated must be added back to taxable income.
Jobs Tax Credit; National or Regional Headquarters Credit; Research and Development Skills Credit. These credits combined are limited to 50% of the income tax that is attributable to income derived from operations in the state for a year. The allowable credit is calculated as follows: multiply the net income passing through from the entity by the effective tax rate/rates (starting at your highest effective tax rate then work down if some of the business income is taxed at 4% and/or 3%); then multiply by the 50% limitation. Any unused credit may be carried over for 5 years.
Job Development Assessment Fee. Employees whose wages have been assessed to help pay for Business Finance Corporation issued bonds which created their jobs, may claim a credit against their income taxes. Job Development Assessment Fee amounts are shown in the city or local income tax withholding block on the W-2 form, with the word "RED" for the city or local name. Credit amounts which exceed the tax due are not refundable and may not be carried forward to another tax year.
Reforestation Tax Credit. This credit, based on the costs incurred for certain approved reforestation practices, is an amount equal to the lesser of fifty percent (50%) of the actual cost of approved practices or fifty percent (50%) of the average cost of approved practices as established by the Mississippi Forestry Commission. In any taxable year, the credit shall not exceed the lesser of $10,000 or the amount of income tax imposed upon the eligible owner for the taxable year reduced by the sum of all other credits allowable to the eligible owner (except for withholding credits, estimated tax payments, and/or credit for tax paid to another state). The maximum reforestation tax credit that an eligible owner may utilize during his lifetime is $75,000 in the aggregate. Any unused portion of the credit may be carried forward to succeeding years. Generally, reforested acreage on which the eligible owner receives any state or federal cost share assistance funds to defray the cost of an approved reforestation practice is not eligible for the credit, unless the eligible owner's adjusted gross income is less than the federal earned income credit level. Any expenses on which the credit is calculated must be added back to taxable income.
Child Adoption Credit. An income tax credit is available up to $2,500 for qualified adoption expenses paid or incurred during the tax year for each child legally adopted by a taxpayer. The credit may be claimed for the tax year in which the adoption becomes final and any unused credit may be carried forward for three (3) years. Formerly, if the Child Adoption Credit was claimed, then the child could not be claimed as a dependent. Senate Bill 2833 removes the restriction to allow both the exemption and credit. The amendment went into effect January 1, 2013.
Long Term Care Credit. Effective January 1, 2007, there is a credit available against individual income taxes for premiums paid during the taxable year for certain qualified long term care insurance policies as defined in Section 7702B of the Internal Revenue Code. The credit available is twenty-five percent (25%) of premiums paid during the taxable year not to exceed $500 or the taxpayer's income tax liability, whichever is less, for each qualified long term care insurance policy. No carry forward is allowed for any unused portion.
Biomass Energy Investment Credit. A credit is allowed for eligible facilities equal to five (5%) of investments made in the initial establishment of this facility. An eligible facility is a new facility that creates at least twenty (20) full time jobs with a minimum investment from private sources of $50,000,000 and produces electric energy from biomass. The credit shall commence within two (2) years from the date becomes operational and may be carried forward for five (5) consecutive years. The credit is limited to fifty percent (50%) of the total state income tax liability.
Wildlife Land Use Credit. Effective January 1, 2011, a state income tax credit is allowed that provides a $5.50 per acre tax credit for certain taxpayers that allow land to be used as a natural area preserve, wildlife refuge, wildlife management area or public outdoor recreation area. Land must first be approved to be suitable for the uses listed above by the Mississippi Commission on Wildlife, Fisheries and Parks. Any unused credit amount may be carried forward for five (5) years from the close of the taxable year in which the land was approved for such a use.
You may visit our web site at www.dor.ms.gov for information on other credits and their limitations. Other credits include Enterprise Zone Credit, Business Child/Dependent Care Credit, Basic Skills or Training Credit, Finance Company Privilege Tax Credit, Mississippi Business Finance Corporation Revenue Bond Service Credit, Export Port Charges, Temporary Assistance for Needy Families (TANF) for federal income tax purposes. The credit referred to Credit. here is allowable to employers who provide facilities for the care of dependents of their employees.