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3. How does the 4013 credit work?
The 4013 guides the RTM through a process where their federal AGI is modified to include certain specified types of income. This "modified AGI" is then subjected to a predetermined cap and then multiplied by a negotiated percentage to determine the total amount of sales tax refund an RTM can claim that year. That amount may be reduced based upon the number of months the RTM was considered an RTM. E.g., if a member moves into the Agreement Area half way through the year, he or she may only take 6/12ths or one half of the credit.