Understanding the 2006 Federal Excise Tax Credit

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What is the 2006 Federal Excise Tax Credit?

Understanding the 2006 Federal Excise Tax Credit

No, this is not a rumor and you actually do get a federal tax credit from your phone bills this year - claimable on line 71 of your form 1040 tax return.

The Federal Excise Tax has been charged through your phone company for years and was based on how far each call was made and how long you talked.

It was challenged in court after phone companies started offering flat rate home phone service and declared unnecessary. After all, if you pay a flat fee, your costs don't depend on how far or how long you talk.

Phone companies were given notice to stop charging the excise tax as of August 2006, so you should have no charges on your phone bill for excise taxes starting in September.

The challengers of this tax also demanded restitution, so if you file as a single, you can claim $30. This climbs to $40 if you have one dependent or are married filing jointly. If you are married with children, you can claim $50 if one child, and $60 if two children.

If you actually have all your old phone bills, you can claim more, but must attach a special form to your return.

   

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