Wednesday, March 17, 2010

Do prepaid calls qualify for the IRS's "phone tax credit"?

For this year's credit on the Federal Excise Tax, I'm still unclear on the following types of calling, which are basically all prepaid:





1. A prepaid/pay-as-you-go cell phone plan? This is the most unclear. The service includes long-distance, of course.


2. A prepaid long distance calling card? I read someplace that the retailer paid the Federal Excise Tax, so the consumer is not entitled to a credit.


3. Skype-out calls? I really doubt it, but does anyone know for certain?

Do prepaid calls qualify for the IRS's "phone tax credit"?
Hi! This phone refund has been confusing...the IRS says that 30% of taxpayers are missing out on this refund when they should get it. And your question about prepaid/pay-as-you-go has been asked so often that the IRS recently has published a question and answer on it. See the link below. It sounds like if you bought a prepaid phonecard or prepaid cell phone from a retailer, you don't get the refund. However, the IRS says the card/phones can be marketed in different way and you might get the refund. The article also talks about recharging the prepaid card/phone and then you would be eligible for the refund. Wow! So much to understand for such a small refund! Click on the link below and scroll down to "I made all my long distance calls using a prepaid cell phone/ prepaid phone card." Good luck !
Reply:This only applies to services where "Long distance calling" is specified on the bills. The tax would then have been added on this billed amount.





Some cell companies have long distance bundled in with the services provided, but the billing breaks out long distance charges.





At least, that's my understanding of the law.
Reply:No

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