Department
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Treasury
Internal
Revenue
ServiceTAX GUIDE
2021
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Your Federal
Income Tax
For Individuals
Publication 17
Catalog Number 10311G
For use in preparing
2021 Returns
Dec 16, 2021
Your Federal
Income Tax
For Individuals
Contents
What's New . . . . . . . . . . . . . . . . . . . . . . . 1
Reminders . . . . . . . . . . . . . . . . . . . . . . . . 3
Introduction . . . . . . . . . . . . . . . . . . . . . . . 4
Part One. The Income Tax Return . . . . . . . . . 6
1 Filing Information . . . . . . . . . . . . . . . . 6
2 Filing Status . . . . . . . . . . . . . . . . . . . 22
3 Dependents . . . . . . . . . . . . . . . . . . . 26
4 Tax Withholding and Estimated Tax . . . . . 37
Part Two. Income and Adjustments
to Income . . . . . . . . . . . . . . . . . . . . . 46
5 Wages, Salaries, and Other Earnings . . . . 47
6 Interest Income . . . . . . . . . . . . . . . . . 54
7 Social Security and Equivalent Railroad
Retirement Benefits . . . . . . . . . . . . . . 62
8 Other Income . . . . . . . . . . . . . . . . . . 67
9 Individual Retirement Arrangements
(IRAs) . . . . . . . . . . . . . . . . . . . . . 76
Part Three. Standard Deduction, Itemized
Deductions, and Other Deductions . . . . . . 91
10 Standard Deduction . . . . . . . . . . . . . . 91
11 Taxes . . . . . . . . . . . . . . . . . . . . . . 95
12 Other Itemized Deductions . . . . . . . . . . 99
Part Four. Figuring Your Taxes, and
Refundable and Nonrefundable Credits . . 105
13 How To Figure Your Tax . . . . . . . . . . . 105
14 Child Tax Credit and Credit for Other
Dependents . . . . . . . . . . . . . . . . . 107
2021 Tax Table . . . . . . . . . . . . . . . . . . . . 111
2021 Tax Computation Worksheet . . . . . . . . 123
2021 Tax Rate Schedules . . . . . . . . . . . . . . 123
Your Rights as a Taxpayer . . . . . . . . . . . . . 125
How To Get Tax Help . . . . . . . . . . . . . . . . 126
Index . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Where To File . . . . . . . . . . . . . . . . . . . . . 138
The explanations and examples in this publication
reflect the interpretation by the Internal Revenue Service
(IRS) of:
• Tax laws enacted by Congress,
• Treasury regulations, and
• Court decisions.
However, the information given does not cover every
situation and is not intended to replace the law or change
its meaning.
All material in this
publication may be
reprinted freely. A
citation to Your Federal
Income Tax (2021)
would be appropriate.
This publication covers some subjects on which a
court may have made a decision more favorable to
taxpayers than the interpretation by the IRS. Until these
differing interpretations are resolved by higher court
decisions or in some other way, this publication will
continue to present the interpretations by the IRS.
All taxpayers have important rights when working with
the IRS. These rights are described in Your Rights as a
Taxpayer in the back of this publication.
Department
of the
Treasury
Internal
Revenue
Service
What's New
This section summarizes important
tax changes that took effect in
2021. Most of these changes are
discussed in more detail
throughout this publication.
Future developments. For the
latest information about the tax law
topics covered in this publication,
such as legislation enacted after it
was published, go to IRS.gov/
Pub17.
Due date of return. File Form
1040 or 1040-SR by April 18, 2022.
The due date is April 18, instead of
April 15, because of the Emancipa-
tion Day holiday in the District of
Columbia—even if you don’t live in
the District of Columbia. If you live
in Maine or Massachusetts, you
have until April 19, 2022. That is
because of the Patriots' Day holi-
day in those states. See chapter 1,
later.
Who must file. Generally, the
amount of income you can receive
before you must file a return has
been increased. For more informa-
tion, see chapter 1, later.
Tuition and fees deduction not
available. The tuition and fees de-
duction is not available after 2020.
Instead, the income limitations for
the lifetime learning credit have
been increased. See Form 8863
and its instructions.
Economic impact payment—EIP
3. Any economic impact payment
you received is not taxable for fed-
eral income tax purposes, but will
reduce your recovery rebate credit.
2021 Recovery Rebate Credit.
This credit is figured like last year's
economic impact payment, EIP 3,
except eligibility and the amount of
the credit are based on your tax
year 2021 information. See the in-
structions for Form 1040, line 30,
and the Recovery Rebate Credit
Worksheet to figure your credit
amount.
Who must file. Generally, the
amount of income you can receive
before you must file a return has
been increased. For more informa-
tion, see the Instructions for Form
1040.
Standard deduction amount in-
creased. For 2021, the standard
deduction amount has been in-
creased for all filers. The amounts
are:
• Single or Married filing sepa-
rately—$12,550;
• Married filing jointly or Qualify-
ing widow(er)—$25,100; and
• Head of household—$18,800.
See chapter 10, later.
If you elect to not itemize
your deductions in 2021,
you may qualify to take a
deduction for charitable contribu-
tions of up to $300 ($600 in the
case of a joint return). For more in-
formation, see Pub. 526, Charita-
ble Contributions.
Virtual currency. If, in 2021, you
engaged in a transaction involving
virtual currency, you will need to
answer “Yes” to the question on
page 1 of Form 1040 or 1040-SR.
See Virtual Currency in the Instruc-
tions for Form 1040 for information
on transactions involving virtual
currency. Do not leave this field
blank. The question must be an-
swered by all taxpayers, not just
taxpayers who engaged in a trans-
action involving virtual currency.
Credits for sick and family leave
for certain self-employed indi-
viduals. The Families First Coro-
navirus Response Act (FFCRA)
helped self-employed individuals
affected by coronavirus by provid-
ing paid sick leave and paid family
leave credits equivalent to those
that employers are required to pro-
vide their employees for qualified
sick leave wages and qualified
family leave wages. The
COVID-related Tax Relief Act of
2020 extended the period during
which individuals can claim these
credits. For more information, see
the Instructions for Form 7202 and
Schedule 3 (Form 1040), line 13b.
Extension and expansion of
credit for qualified sick and
family leave wages. The Ameri-
can Rescue Plan Act of 2021 (the
ARP), enacted on March 11, 2021,
provides that certain self-employed
individuals can claim credits for up
to 10 days of “paid sick leave,” and
up to 60 days of “paid family
leave,” if they are unable to work or
telework due to circumstances re-
lated to coronavirus. Self-em-
ployed individuals may claim these
credits for the period beginning on
April 1, 2021, and ending Septem-
ber 30, 2021. For more informa-
tion, see the Instructions for Form
7202 and Schedule 3 (Form 1040),
line 13h.
Form 9000, Alternative Media
Preference. Beginning in 2021,
taxpayers with print disabilities can
use Form 9000 to elect to receive
notices from the IRS in an alterna-
tive format including braille, large
print, audio, and electronic. You
can attach Form 9000 to your Form
1040 or 1040-SR or you can mail it
separately. For more information,
see Form 9000.TIP
All taxpayers now eligible for
Identity Protection PIN. Begin-
ning in 2021, the IRS Identity Pro-
tection PIN (IP PIN) Opt-In Pro-
gram has been expanded to all
taxpayers who can properly verify
their identity. An IP PIN helps pre-
vent your social security number
from being used to file a fraudulent
federal income tax return. You can
use the Get An IP PIN tool on
IRS.gov to request an IP PIN, file
Form 15227 if your income is
$72,000 or less, or make an ap-
pointment to visit a Taxpayer As-
sistance Center.
Direct deposit now available for
returns filed late. You can now
receive a direct deposit of your re-
fund even if you file your 2021 re-
turn after November 30, 2022.
Expanded dependent care as-
sistance. The ARP expanded the
child and dependent care tax credit
for 2021 by making it refundable
for certain taxpayers and making it
larger. For 2021, the dollar limit on
qualifying expenses increases to
$8,000 for one qualifying person
and $16,000 for two or more quali-
fying persons. The rules for calcu-
lating the credit have also
changed; the percentage of quali-
fying expenses eligible for the
credit has increased, along with
the income limit at which the credit
begins phasing out. Additionally,
for taxpayers who receive depend-
ent care benefits from their em-
ployer, the dollar limit of the exclu-
sion amount increases for 2021.
For more information, see the In-
structions for Form 2441 and Pub.
503.
Child tax credit. Under the ARP,
the child tax credit has been en-
hanced for 2021. The child tax
credit has been extended to quali-
fying children under age 18. De-
pending on modified adjusted
gross income, you may receive an
enhanced credit amount of up to
$3,600 for a qualifying child under
age 6 and up to $3,000 for a quali-
fying child over age 5 and under
age 18. The enhanced credit
amount begins to phase out where
modified adjusted gross income
exceeds $150,000 in the case of a
joint return or surviving spouse,
$112,500 in the case of a head of
household, and $75,000 in all other
cases.
If you (or your spouse if filing
jointly) lived in the United States for
more than half the year, the child
tax credit will be fully refundable
even if you don't have earned in-
come. If you don't meet this
residency requirement, your child
tax credit will be a combination of a
nonrefundable child tax credit and
a refundable additional child tax
credit, as was the case in 2020.
The credit for other dependents
has not been enhanced and is fig-
ured as it was in 2020.
Because of the changes
made by the ARP, de-
tailed discussion of the
child tax credit and the Child Tax
Credit Worksheet, which were pre-
viously part of the Instructions for
Form 1040, have been moved to
the Instructions for Schedule 8812
(Form 1040), Credit for Qualifying
Children and Other Dependents.
Schedule 8812 (Form 1040).
The Schedule 8812 (Form 1040)
and its instructions have been re-
vised to be the single source for
figuring and reporting the child tax
credits and credit for other depend-
ents. The instructions now include
all applicable worksheets for figur-
ing these credits. As a result, Pub.
972, Child Tax Credit, won’t be re-
vised. For prior-year versions of
Pub. 972, go to IRS.gov/Pub972.
Letter 6419. If you received ad-
vance child tax credit payments
during 2021, you will receive Letter
6419. Keep this notice for your re-
cords. You will use the information
from this notice to figure the
amount of child tax credit to claim
on your 2021 tax return or the
amount of additional tax you must
report on Schedule 2 (Form 1040).
Additional tax on excess ad-
vance child tax credit pay-
ments. If you received advance
child tax credit payments during
2021 and the credits you figure us-
ing Schedule 8812 (Form 1040)
are less than what you received,
you may owe an additional tax.
Complete Schedule 8812 (Form
1040) to determine if you must re-
port an additional tax on Schedule
2 (Form 1040).
Premium tax credit (PTC). The
ARP expanded the PTC by elimi-
nating the limitation that a taxpay-
er's household income may not ex-
ceed 400% of the federal poverty
line and generally increases the
credit amounts. In addition, in
2021, if you receive unemployment
compensation, you are generally
eligible to claim the PTC if you
meet the other requirements. For
more information, see Pub. 974
and Form 8962 and its instructions.CAUTION
!
Publication 17 (2021) Page 1
Changes to the earned income
credit (EIC). For 2021, the follow-
ing changes have been made to
the EIC.
• EIC rules for taxpayers
without a qualifying child.
Special rules apply if you are
claiming the EIC without a
qualifying child. In these ca-
ses, the minimum age has
been lowered to age 19 ex-
cept for specified students
who must be at least age 24
at the end of the year. How-
ever, the applicable minimum
age is lowered further for for-
mer foster youth and qualified
homeless youth to age 18.
Additionally, you no longer
need to be under age 65 to
claim the EIC without a quali-
fying child.
• EIC rules for taxpayers with
a qualifying child. If you are
claiming the EIC with a quali-
fying child, you should follow
the rules that apply to filers
with a qualifying child or chil-
dren when determining
whether you are eligible to
claim the EIC even if your
qualifying child hasn't been is-
sued a valid SSN on or before
the due date of your return (in-
cluding extensions). However,
when determining the amount
of EIC that you are eligible to
claim on your return, you
should follow the rules that
apply to taxpayers who do not
have a qualifying child.
• Phaseout amounts in-
creased. The amount of the
credit has been increased and
the phaseout income limits at
which you can claim the credit
have been expanded.
• Rules for separated spou-
ses. If you are married but
don't file a joint return, you
may qualify to claim the EIC if
you live with a qualifying child
for more than half the year
and either live apart from your
spouse for the last 6 months
of 2021 or are legally separa-
ted according to your state
law under a written separation
agreement or a decree of sep-
arate maintenance and do not
live in the same household as
your spouse at the end 2021.
• Investment income limit in-
creased. The amount of in-
vestment income you can re-
ceive and still be eligible to
claim the EIC has increased to
$10,000.
• Prior year (2019) earned in-
come. You can elect to use
your 2019 earned income to
figure your 2021 earned in-
come credit if your 2019
earned income is more than
your 2021 earned income.
See the instructions for Form
1040, line 27a.
File Schedule EIC (Form 1040) if
you have a qualifying child. If
you have at least one child who
meets the conditions to be your
qualifying child for purposes of
claiming the EIC, complete and at-
tach Schedule EIC to your Form
1040 or 1040-SR even if that child
doesn't have a valid SSN. For
more information, including how to
complete Schedule EIC if your
qualifying child doesn't have a valid
SSN, see the instructions for Form
1040, line 27a, and Schedule EIC.
Forgiveness of Paycheck Pro-
tection Program (PPP) loans.
The forgiveness of a PPP loan cre-
ates tax-exempt income, so you
don't need to report the income on
Form 1040 or 1040-SR, but you do
need to report certain information
related to your PPP loan. To find
out how to report information rela-
ted to your PPP loan, see Forgive-
ness of Paycheck Protection Pro-
gram (PPP) Loans under Income in
the Instructions for Form 1040.
Identity verification. The IRS
launched an improved identity veri-
fication and sign-in process that
enables more people to securely
access and use IRS online tools
and applications. To provide verifi-
cation services, the IRS is using
ID.me, a trusted technology pro-
vider. The new process is one
more step the IRS is taking to en-
sure that taxpayer information is
provided only to the person who le-
gally has a right to the data. Tax-
payers using the new mo-
bile-friendly verification procedure
can gain entry to existing IRS on-
line services such as the Child Tax
Credit Update Portal, On-line Ac-
count, Get Transcript Online, Get
an Identity Protection PIN (IP PIN),
and Online Payment Agreement.
Additional IRS applications will
transition to the new method over
the next year. Each online service
will also provide information that
will instruct taxpayers on the steps
they need to follow for access to
the service. You can also see
IR-2021-228 for more information.
Personal protective equipment
(PPE). Amounts paid for PPE,
such as masks, hand sanitizer, and
sanitizing wipes, for the primary
purpose of preventing the spread
of coronavirus, are qualified medi-
cal expenses. If the amounts were
paid or reimbursed under a health
flexible spending account, Archer
medical savings account, health
reimbursement arrangement, or
any other health plan, the amounts
are not deductible on Schedule A
(Form 1040).
Standard mileage rates. The
standard mileage rate allowed for
operating expenses for a car when
you use it for medical reasons de-
creased to 16 cents a mile. The
2021 rate for use of your vehicle to
do volunteer work for certain chari-
table organizations remains at 14
cents a mile and the rate for busi-
ness use of a vehicle is 56 cents a
mile.
Modified AGI limit for traditional
IRA contributions. For 2021, if
you are covered by a retirement
plan at work, your deduction for
contributions to a traditional IRA is
reduced (phased out) if your modi-
fied AGI is:
• More than $105,000 but less
than $125,000 for a married
couple filing a joint return or a
qualifying widow(er),
• More than $66,000 but less
than $76,000 for a single indi-
vidual or head of household,
or
• Less than $10,000 for a mar-
ried individual filing a separate
return.
If you either live with your spouse
or file a joint return, and your
spouse is covered by a retirement
plan at work but you aren’t, your
deduction is phased out if your
modified AGI is more than
$198,000 but less than $208,000. If
your modified AGI is $206,000 or
more, you can’t take a deduction
for contributions to a traditional
IRA. See How Much Can You De-
duct in chapter 9, later.
Modified AGI limit for Roth IRA
contributions. For 2021, your
Roth IRA contribution limit is re-
duced (phased out) in the following
situations.
• Your filing status is married fil-
ing jointly or qualifying
widow(er) and your modified
AGI is at least $198,000. You
can’t make a Roth IRA contri-
bution if your modified AGI is
$208,000 or more.
• Your filing status is single,
head of household, or married
filing separately and you didn’t
live with your spouse at any
time in 2021 and your modi-
fied AGI is at least $125,000.
You can’t make a Roth IRA
contribution if your modified
AGI is $140,000 or more.
• Your filing status is married fil-
ing separately, you lived with
your spouse at any time dur-
ing the year, and your modi-
fied AGI is more than zero.
You can’t make a Roth IRA
contribution if your modified
AGI is $10,000 or more. See
Can You Contribute to a Roth
IRA in chapter 9, later.
2022 modified AGI limits. You
can find information about the
2022 contribution and AGI limits in
Pub. 590-A.
Form 1040-X continuous-use
form and instructions. Form
1040-X, Amended U.S. Individual
Income Tax Return, and its instruc-
tions have been converted from an
annual revision to continuous use
beginning in tax year 2021. Both
the form and instructions will be
updated as required. For the most
recent version, go to IRS.gov/
Form1040X. Section discussions
and charts that were updated an-
nually have been removed, or re-
placed with references to relevant
forms, schedules, instructions, and
publications. See the forms,
schedules, instructions, and publi-
cations for the year of the tax re-
turn you are amending for guid-
ance on specific topics.
Business meals. Section 210 of
the Taxpayer Certainty and Disas-
ter Tax Relief Act of 2020 provides
for the temporary allowance of a
100% business meal deduction for
food or beverages provided by a
restaurant and paid or incurred af-
ter December 31, 2020, and before
January 1, 2023.
Tax law changes for 2022.
When you figure how much income
tax you want withheld from your
pay and when you figure your esti-
mated tax, consider tax law
changes effective in 2022. For
more information, see Pub. 505,
Tax Withholding and Estimated
Tax.
Form 8915-F replaces Form
8915-E. Form 8915-F replaces
Form 8915-E for reporting qualified
2020 disaster distributions and re-
payments of those distributions
made in 2021 and 2022, as appli-
cable, unlike in previous disaster
years where distributions and re-
payments would be reported on
the applicable Form 8915 for that
year's disasters. For example,
Form 8915-D, Qualified 2019 Dis-
aster Retirement Plan Distributions
and Repayments, would be used
to report qualified 2019 disaster
distributions and repayments. For
more information, see the Instruc-
tions for Form 8915-F.
Qualified business income de-
duction. The simplified worksheet
for figuring your qualified business
income deduction is now Form
8995, Qualified Business Income
Deduction Simplified Computation.
Page 2 Publication 17 (2021)
If you don't meet the requirements
to file Form 8995, use Form
8995-A, Qualified Business In-
come Deduction. For more infor-
mation, see each form's instruc-
tions.
Alternative minimum tax (AMT)
exemption amount increased.
The AMT exemption amount is in-
creased to $73,600 ($114,600 if
married filing jointly or qualifying
widow(er); $57,300 if married filing
separately). The income levels at
which the AMT exemption begins
to phase out have increased to
$523,600 ($1,047,200 if married fil-
ing jointly or qualifying widow(er)).
Adoption credit. The adoption
credit and the exclusion for em-
ployer-provided adoption benefits
have both increased to $14,440
per eligible child in 2020. The
amount begins to phase out if you
have modified AGI in excess of
$216,660 and is completely
phased out if your modified AGI is
$256,660 or more.
Reminders
Listed below are important
reminders and other items that
may help you file your 2021 tax
return. Many of these items are
explained in more detail later in this
publication.
Publication 17 changes. We re-
moved the following 2019 chapters
from this publication: 6, 8, 9, 10,
13, 14, 15, 16, 18, 19, 20, 22, 24,
25, 26, 29, 30, 31, 33, 34, 35, and
36. You can find most of the infor-
mation previously found in those
chapters in the primary publication.
Please see Publication 17
changes, later.
Special rules for eligible gains
invested in Qualified Opportu-
nity Funds. If you have an eligible
gain, you can invest that gain into a
Qualified Opportunity Fund (QOF)
and elect to defer part or all of the
gain that is otherwise includible in
income. The gain is deferred until
the date you sell or exchange the
investment or December 31, 2026,
whichever is earlier. You may also
be able to permanently exclude
gain from the sale or exchange of
an investment in a QOF if the in-
vestment is held for at least 10
years. For information about what
types of gains entitle you to elect
these special rules, see the In-
structions for Schedule D (Form
1040). For information on how to
elect to use these special rules,
see the Instructions for Form 8949.
Secure your tax records from
identity theft. Identity theft occurs
when someone uses your personal
information, such as your name,
SSN, or other identifying informa-
tion, without your permission, to
commit fraud or other crimes. An
identity thief may use your SSN to
get a job or may file a tax return us-
ing your SSN to receive a refund.
For more information about identity
theft and how to reduce your risk
from it, see chapter 1, later.
Taxpayer identification num-
bers. You must provide the tax-
payer identification number for
each person for whom you claim
certain tax benefits. This applies
even if the person was born in
2021. Generally, this number is the
person's SSN. See chapter 1, later.
Foreign-source income. If you
are a U.S. citizen with income from
sources outside the United States
(foreign income), you must report
all such income on your tax return
unless it is exempt by law or a tax
treaty. This is true whether you live
inside or outside the United States
and whether or not you receive a
Form W-2 or Form 1099 from the
foreign payer. This applies to
earned income (such as wages
and tips) as well as unearned in-
come (such as interest, dividends,
capital gains, pensions, rents, and
royalties).
If you live outside the United
States, you may be able to exclude
part or all of your foreign earned in-
come. For details, see Pub. 54,
Tax Guide for U.S. Citizens and
Resident Aliens Abroad.
Foreign financial assets. If you
had foreign financial assets in
2021, you may have to file Form
8938 with your return. See Form
8938 and its instructions or visit
IRS.gov/Form8938 for details.
Automatic 6-month extension to
file tax return. You can get an au-
tomatic 6-month extension of time
to file your tax return. See chap-
ter 1, later.
Payment of taxes. You can pay
your taxes by making electronic
payments online; from a mobile de-
vice using the IRS2Go app; or in
cash, or by check or money order.
Paying electronically is quick,
easy, and faster than mailing in a
check or money order. See chap-
ter 1, later.
Faster ways to file your return.
The IRS offers fast, accurate ways
to file your tax return information
without filing a paper tax return.
You can use IRS e-file (electronic
filing). See chapter 1, later.
Free electronic filing. You may
be able to file your 2021 taxes on-
line for free. See chapter 1, later.
Change of address. If you
change your address, notify the
IRS. See chapter 1, later.
Refund on a late-filed return. If
you were due a refund but you did
not file a return, you must generally
file your return within 3 years from
the date the return was due (in-
cluding extensions) to get that re-
fund. See chapter 1, later.
Frivolous tax returns. The IRS
has published a list of positions
that are identified as frivolous. The
penalty for filing a frivolous tax re-
turn is $5,000. See chapter 1, later.
Filing erroneous claim for re-
fund or credit. You may have to
pay a penalty if you file an errone-
ous claim for refund or credit. See
chapter 1, later.
Access your online account.
You must authenticate your iden-
tity. To securely log into your fed-
eral tax account, go to IRS.gov/
Account. View the amount you
owe, review 24 months of payment
history, access online payment op-
tions, and create or modify an on-
line payment agreement. You can
also access your tax records on-
line.
Health care coverage. If you
need health care coverage, go to
HealthCare.gov to learn about
health insurance options for you
and your family, how to buy health
insurance, and how you might
qualify to get financial assistance
to buy health insurance.
Disclosure, Privacy Act, and pa-
perwork reduction information.
The IRS Restructuring and Reform
Act of 1998, the Privacy Act of
1974, and the Paperwork Reduc-
tion Act of 1980 require that when
we ask you for information, we
must first tell you what our legal
right is to ask for the information,
why we are asking for it, how it will
be used, what could happen if we
do not receive it, and whether your
response is voluntary, required to
obtain a benefit, or mandatory un-
der the law. A complete statement
on this subject can be found in
your tax form instructions.
Preparer e-file mandate. Most
paid preparers must e-file returns
they prepare and file. Your pre-
parer may make you aware of this
requirement and the options avail-
able to you.
Treasury Inspector General for
Tax Administration. If you want
to confidentially report misconduct,
waste, fraud, or abuse by an IRS
employee, you can call
800-366-4484 (call 800-877-8339
if you are deaf, hard of hearing, or
have a speech disability, and are
using TTY/TDD equipment). You
can remain anonymous.
Photographs of missing chil-
dren. The IRS is a proud partner
with the National Center for
Missing & Exploited Children®
(NCMEC). Photographs of missing
children selected by the Center
may appear in this publication on
pages that would otherwise be
blank. You can help bring these
children home by looking at the
photographs and calling
1-800-THE-LOST (800-843-5678)
if you recognize a child.
Publication 17 (2021) Page 3
Publication 17 Changes
Note. This publication does not cover the topics listed in the following table. Please see the primary publication.
Chapter Removed Title of Chapter Primary Publication
6 Tip Income Pub. 531, Reporting Tip Income
8 Dividends and Other Distributions Pub. 550, Investment Income and
Expenses
9 Rental Income and Expenses Pub. 527, Residential Rental Property
(Including Rental of Vacation Homes)
10 Retirement Plans, Pensions, and Annuities Pub. 575, Pension and Annuity Income
13 Basis of Property Pub. 551, Basis of Assets
14 Sale of Property Pub. 550
15 Selling Your Home Pub. 523, Selling Your Home
16 Reporting Gains and Losses Pub. 550
18 Alimony Pub. 504, Divorced or Separated
Individuals
19 Education-Related Adjustments Pub. 970, Tax Benefits for Education
20 Other Adjustments to Income Pub. 463, Travel, Gift, and Car Expenses
22 Medical and Dental Expenses Pub. 502, Medical and Dental Expenses
24 Interest Expense Pub. 550
Pub. 936, Home Mortgage Interest
Deduction
25 Charitable Contributions Pub. 561, Determining the Value of
Donated Property
Pub. 526, Charitable Contributions
26 Nonbusiness Casualty and Theft Losses Pub. 547, Casualties, Disasters, and Thefts
29 Tax on Unearned Income of Certain Minor
Children
Pub. 929, Tax Rules for Children and
Dependents
30 Child and Dependent Care Credit Pub. 503, Child and Dependent Care
Expenses
31 Credit for the Elderly or the Disabled Pub. 524, Credit for the Elderly or the
Disabled
33 Education Credits Pub. 970, Tax Benefits for Education
34 Earned Income Credit (EIC) Pub. 596, Earned Income Credit (EIC)
35 Premium Tax Credit Pub. 974, Premium Tax Credit (PTC)
36 Other Credits
Introduction
This publication covers the general
rules for filing a federal income tax
return. It supplements the informa-
tion contained in your tax form in-
structions. It explains the tax law to
make sure you pay only the tax you
owe and no more.
How this publication is ar-
ranged. Pub. 17 closely follows
Form 1040, U.S. Individual Income
Tax Return, and Form 1040-SR,
U.S. Tax Return for Seniors, and
their three Schedules 1 through 3.
Pub. 17 is divided into four parts.
Each part is further divided into
chapters, most of which generally
discuss one line of the form or one
line of one of the three schedules.
The introduction at the beginning
of each part lists the schedule(s)
discussed in that part.
The table of contents inside the
front cover, the introduction to
each part, and the index in the
back of the publication are useful
tools to help you find the informa-
tion you need.
What is in this publication. This
publication begins with the rules for
filing a tax return. It explains:
1. Who must file a return,
2. When the return is due,
3. How to e-file your return, and
4. Other general information.
It will help you identify which filing
status you qualify for, whether you
can claim any dependents, and
whether the income you receive is
taxable. The publication goes on to
explain the standard deduction, the
kinds of expenses you may be able
to deduct, and the various kinds of
credits you may be able to take to
reduce your tax.
Throughout this publication are
examples showing how the tax law
applies in typical situations. Also
throughout this publication are
flowcharts and tables that present
tax information in an easy-to-un-
derstand manner.
Many of the subjects discussed
in this publication are discussed in
greater detail in other IRS publica-
tions. References to those other
publications are provided for your
information.
Icons. Small graphic symbols,
or icons, are used to draw your
Page 4 Publication 17 (2021)
attention to special information.
See Table 1 for an explanation of
each icon used in this publication.
What is not covered in this pub-
lication. Some material that you
may find helpful is not included in
this publication but can be found in
your tax form instructions booklet.
This includes lists of:
• Where to report certain items
shown on information docu-
ments, and
• Tax Topics you can read at
IRS.gov/TaxTopics.
If you operate your own busi-
ness or have other self-employ-
ment income, such as from baby-
sitting or selling crafts, see the
following publications for more in-
formation.
• Pub. 334, Tax Guide for Small
Business.
• Pub. 535, Business Expen-
ses.
• Pub. 587, Business Use of
Your Home.
Help from the IRS. There are
many ways you can get help from
the IRS. These are explained un-
der How To Get Tax Help at the
end of this publication.
Comments and suggestions.
We welcome your comments
about this publication and sugges-
tions for future editions.
You can send us comments
through IRS.gov/FormComments.
Or, you can write to the Internal
Revenue Service, Tax Forms and
Publications, 1111 Constitution
Ave. NW, IR-6526, Washington,
DC 20224.
Although we can’t respond indi-
vidually to each comment re-
ceived, we do appreciate your
feedback and will consider your
comments and suggestions as we
revise our tax forms, instructions,
and publications. Don’t send tax
questions, tax returns, or payments
to the above address.
Getting answers to your tax
questions. If you have a tax ques-
tion not answered by this publica-
tion or the How To Get Tax Help
section at the end of this publica-
tion, go to the IRS Interactive Tax
Assistant page at IRS.gov/
Help/ITA where you can find topics
by using the search feature or
viewing the categories listed.
Getting tax forms, instruc-
tions, and publications. Go to
IRS.gov/Forms to download cur-
rent and prior-year forms, instruc-
tions, and publications.
Ordering tax forms, instruc-
tions, and publications. Go to
IRS.gov/OrderForms to order cur-
rent forms, instructions, and publi-
cations; call 800-829-3676 to order
prior-year forms and instructions.
The IRS will process your order for
forms and publications as soon as
possible. Don’t resubmit requests
you’ve already sent us. You can
get forms and publications faster
online.
IRS mission. Provide America's
taxpayers top-quality service by
helping them understand and meet
their tax responsibilities and en-
force the law with integrity and fair-
ness to all.
Table 1. Legend of Icons
Icon ExplanationCAUTION
!
Items that may cause you particular problems, or an alert about pending legislation that may be enacted after
this publication goes to print.
An Internet site or an email address.
An address you may need.RECORDS
Items you should keep in your personal records.
Items you may need to figure or a worksheet you may need to complete and keep for your records.
An important phone number.TIP
Helpful information you may need.
Publication 17 (2021) Page 5
Part One.
The Income Tax
Return
The four chapters in this part provide basic information on the tax system.
They take you through the first steps of filling out a tax return. They also
provide information about dependents, and discuss recordkeeping
requirements, IRS e-file (electronic filing), certain penalties, and the two
methods used to pay tax during the year: withholding and estimated tax.
The Form 1040 and 1040-SR schedules that are discussed in these
chapters are:
• Schedule 1, Additional Income and Adjustments to Income; and
• Schedule 3 (Part II), Other Payments and Refundable Credits.
1.
Filing
Information
What's New
Due date of return. File Form 1040 or
1040-SR by April 18, 2022. The due date is
April 18, instead of April 15, because of the
Emancipation Day holiday in the District of Co-
lumbia—even if you don't live in the District of
Columbia. If you live in Maine or Massachu-
setts, you have until April 19, 2022. That is be-
cause of the Patriots' Day holiday in those
states.
Who must file. Generally, the amount of in-
come you can receive before you must file a re-
turn has been increased. See Table 1-1, Ta-
ble 1-2, and Table 1-3 for the specific amounts.
Reminders
File online. Rather than filing a return on pa-
per, you may be able to file electronically using
IRS e-file. For more information, see Why
Should I File Electronically, later.
Access your online account (individual tax-
payers only). Go to IRS.gov/Account to se-
curely access information about your federal tax
account.
• View the amount you owe and a break-
down by tax year.
• See payment plan details or apply for a
new payment plan.
• Make a payment, view 5 years of payment
history and any pending or scheduled pay-
ments.
• Access your tax records, including key
data from your most recent tax return, your
economic impact payment amounts, and
transcripts.
• View digital copies of select notices from
the IRS.
• Approve or reject authorization requests
from tax professionals.
• Update your address or manage your com-
munication preferences.
• Go to IRS.gov/SecureAccess to view the
required identity authentication process.
Change of address. If you change your ad-
dress, you should notify the IRS. You can use
Form 8822 to notify the IRS of the change. See
Change of Address, later, under What Happens
After I File.
Enter your social security number. You
must enter your social security number (SSN) in
the spaces provided on your tax return. If you
file a joint return, enter the SSNs in the same or-
der as the names.
Direct deposit of refund. Instead of getting a
paper check, you may be able to have your re-
fund deposited directly into your account at a
bank or other financial institution. See Direct
Deposit under Refunds, later. If you choose di-
rect deposit of your refund, you may be able to
split the refund among two or three accounts.
Pay online or by phone. If you owe additional
tax, you may be able to pay online or by phone.
See How To Pay, later.
Installment agreement. If you can’t pay the
full amount due with your return, you may ask to
make monthly installment payments. See In-
stallment Agreement, later, under Amount You
Owe. You may be able to apply online for a pay-
ment agreement if you owe federal tax, interest,
and penalties.
Automatic 6-month extension. You can get
an automatic 6-month extension to file your tax
return if, no later than the date your return is
due, you file Form 4868. See Automatic Exten-
sion, later.
Service in combat zone. You are allowed ex-
tra time to take care of your tax matters if you
are a member of the Armed Forces who served
in a combat zone, or if you served in a combat
zone in support of the Armed Forces. See Indi-
viduals Serving in Combat Zone, later, under
When Do I Have To File.
Adoption taxpayer identification number. If
a child has been placed in your home for purpo-
ses of legal adoption and you won't be able to
get a social security number for the child in time
to file your return, you may be able to get an
adoption taxpayer identification number (ATIN).
For more information, see Social Security Num-
ber (SSN), later.
Taxpayer identification number for aliens.
If you or your dependent is a nonresident or res-
ident alien who doesn't have and isn't eligible to
get a social security number, file Form W-7, Ap-
plication for IRS Individual Taxpayer Identifica-
tion Number, with the IRS. For more informa-
tion, see Social Security Number (SSN), later.
Individual taxpayer identification number
(ITIN) renewal. Some ITINs must be renewed.
If you haven't used your ITIN on a U.S. tax re-
turn at least once for tax years 2018, 2019, or
2020, it expired at the end of 2021 and must be
renewed if you need to file a U.S. federal tax re-
turn in 2022. You don't need to renew your ITIN
if you don't need to file a federal tax return. You
can find more information at IRS.gov/ITIN.
ITINs assigned before 2013 have ex-
pired and must be renewed if you need
to file a tax return in 2022. If you previ-
ously submitted a renewal application and it
was approved, you do not need to renew again
unless you haven't used your ITIN on a federal
tax return at least once for tax years 2018,
2019, or 2020.
Frivolous tax submissions. The IRS has
published a list of positions that are identified as
frivolous. The penalty for filing a frivolous tax re-
turn is $5,000. Also, the $5,000 penalty will ap-
ply to other specified frivolous submissions. For
more information, see Civil Penalties, later.
Introduction
This chapter discusses the following topics.
• Whether you have to file a return.
• How to file electronically.
• How to file for free.
• When, how, and where to file your return.
• What happens if you pay too little or too
much tax.
• What records you should keep and how
long you should keep them.
• How you can change a return you have al-
ready filed.TIP
Page 6 Chapter 1 Filing Information
Do I Have To
File a Return?
You must file a federal income tax return if you
are a citizen or resident of the United States or
a resident of Puerto Rico and you meet the filing
requirements for any of the following categories
that apply to you.
1. Individuals in general. (There are special
rules for surviving spouses, executors, ad-
ministrators, legal representatives, U.S.
citizens and residents living outside the
United States, residents of Puerto Rico,
and individuals with income from U.S. pos-
sessions.)
2. Dependents.
3. Certain children under age 19 or full-time
students.
4. Self-employed persons.
5. Aliens.
The filing requirements for each category are
explained in this chapter.
The filing requirements apply even if you
don't owe tax.
Even if you don't have to file a return, it
may be to your advantage to do so.
See Who Should File, later.
File only one federal income tax return
for the year regardless of how many
jobs you had, how many Forms W-2
you received, or how many states you lived in
during the year. Don't file more than one original
return for the same year, even if you haven’t re-
ceived your refund or haven’t heard from the
IRS since you filed.
Individuals—In General
If you are a U.S. citizen or resident, whether you
must file a return depends on three factors.
1. Your gross income.
2. Your filing status.
3. Your age.
To find out whether you must file, see Ta-
ble 1-1, Table 1-2, and Table 1-3. Even if no ta-
ble shows that you must file, you may need to
file to get money back. See Who Should File,
later.
Gross income. This includes all income you
receive in the form of money, goods, property,
and services that isn't exempt from tax. It also
includes income from sources outside the Uni-
ted States or from the sale of your main home
(even if you can exclude all or part of it). Include
part of your social security benefits if:
1. You were married, filing a separate return,
and you lived with your spouse at any time
during 2021; or
2. Half of your social security benefits plus
your other gross income and any tax-ex-
empt interest is more than $25,000
($32,000 if married filing jointly).TIPCAUTION
!
If either (1) or (2) applies, see the Instructions
for Form 1040 or Pub. 915, Social Security and
Equivalent Railroad Retirement Benefits, to fig-
ure the social security benefits you must include
in gross income.
Common types of income are discussed in
Part Two of this publication.
Community property states. Community
property states include Arizona, California,
Idaho, Louisiana, Nevada, New Mexico, Texas,
Washington, and Wisconsin. If you and your
spouse lived in a community property state, you
must usually follow state law to determine what
is community property and what is separate in-
come. For details, see Form 8958 and Pub.
555.
Nevada, Washington, and California do-
mestic partners. A registered domestic part-
ner in Nevada, Washington, or California must
generally report half the combined community
income of the individual and his or her domestic
partner. See Pub. 555.
Self-employed individuals. If you are
self-employed, your gross income includes the
amount on line 7 of Schedule C (Form 1040),
Profit or Loss From Business; and line 9 of
Schedule F (Form 1040), Profit or Loss From
Farming. See Self-Employed Persons, later, for
more information about your filing requirements.
If you don't report all of your self-em-
ployment income, your social security
benefits may be lower when you retire.CAUTION
!
Filing status. Your filing status depends on
whether you are single or married and on your
family situation. Your filing status is determined
on the last day of your tax year, which is De-
cember 31 for most taxpayers. See chapter 2
for an explanation of each filing status.
Age. If you are 65 or older at the end of the
year, you can generally have a higher amount
of gross income than other taxpayers before
you must file. See Table 1-1. You are consid-
ered 65 on the day before your 65th birthday.
For example, if your 65th birthday is on January
1, 2022, you are considered 65 for 2021.
Surviving Spouses,
Executors, Administrators,
and Legal Representatives
You must file a final return for a decedent (a
person who died) if both of the following are
true.
• You are the surviving spouse, executor,
administrator, or legal representative.
• The decedent met the filing requirements
at the date of death.
For more information on rules for filing a de-
cedent's final return, see Pub. 559.
U.S. Citizens and Resident Aliens
Living Abroad
To determine whether you must file a return, in-
clude in your gross income any income you re-
ceived abroad, including any income you can
Table 1-1. 2021 Filing Requirements for Most Taxpayers
IF your filing status is...
AND at the end of 2021 you
were...*
THEN file a return if
your gross income
was at least...**
Single under 65 $12,550
65 or older $14,250
Married filing jointly*** under 65 (both spouses) $25,100
65 or older (one spouse) $26,450
65 or older (both spouses) $27,800
Married filing separately any age $5
Head of household under 65 $18,800
65 or older $20,500
Qualifying widow(er) under 65 $25,100
65 or older $26,450
* If you were born on January 1, 1957, you are considered to be age 65 at the end of 2021. (If your spouse
died in 2021 or if you are preparing a return for someone who died in 2021, see Pub. 501.)
** Gross income means all income you received in the form of money, goods, property, and services that
isn't exempt from tax, including any income from sources outside the United States or from the sale of
your main home (even if you can exclude part or all of it). Don't include any social security benefits unless
(a) you are married filing a separate return and you lived with your spouse at any time during 2021, or (b)
one-half of your social security benefits plus your other gross income and any tax-exempt interest is more
than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the Instructions for Form 1040 or
Pub. 915 to figure the taxable part of social security benefits you must include in gross income. Gross
income includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from a
business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring
gross income, don't reduce your income by any losses, including any loss on Schedule C, line 7, or
Schedule F, line 9.
*** If you didn't live with your spouse at the end of 2021 (or on the date your spouse died) and your gross
income was at least $5, you must file a return regardless of your age.
Chapter 1 Filing Information Page 7
exclude under the foreign earned income exclu-
sion. For information on special tax rules that
may apply to you, see Pub. 54. It is available
online and at most U.S. embassies and consu-
lates. See How To Get Tax Help in the back of
this publication.
Residents of Puerto Rico
If you are a U.S. citizen and also a bona fide
resident of Puerto Rico, you must generally file
a U.S. income tax return for any year in which
you meet the income requirements. This is in
addition to any legal requirement you may have
to file an income tax return with Puerto Rico.
If you are a bona fide resident of Puerto Rico
for the entire year, your U.S. gross income
doesn't include income from sources within
Puerto Rico. It does, however, include any in-
come you received for your services as an em-
ployee of the United States or a U.S. agency. If
you receive income from Puerto Rican sources
that isn't subject to U.S. tax, you must reduce
your standard deduction. As a result, the
amount of income you must have before you
are required to file a U.S. income tax return is
lower than the applicable amount in Table 1-1
or Table 1-2. For more information, see Pub.
570.
Individuals With Income From
U.S. Possessions
If you had income from Guam, the Common-
wealth of the Northern Mariana Islands, Ameri-
can Samoa, or the U.S. Virgin Islands, special
rules may apply when determining whether you
must file a U.S. federal income tax return. In ad-
dition, you may have to file a return with the in-
dividual island government. See Pub. 570 for
more information.
Dependents
If you are a dependent (one who meets the de-
pendency tests in chapter 3), see Table 1-2 to
find out whether you must file a return. You
must also file if your situation is described in Ta-
ble 1-3.
Responsibility of parent. Generally, a child is
responsible for filing his or her own tax return
and for paying any tax on the return. If a de-
pendent child must file an income tax return but
can’t file due to age or any other reason, then a
parent, guardian, or other legally responsible
person must file it for the child. If the child can’t
sign the return, the parent or guardian must sign
the child's name followed by the words “By
(your signature), parent for minor child.”
Child's earnings. Amounts a child earns by
performing services are included in his or her
gross income and not the gross income of the
parent. This is true even if under local law the
child's parent has the right to the earnings and
may actually have received them. But if the
child doesn't pay the tax due on this income,
the parent is liable for the tax.
Certain Children Under
Age 19 or Full-Time
Students
If a child's only income is interest and dividends
(including capital gain distributions and Alaska
Permanent Fund dividends), the child was un-
der age 19 at the end of 2021 or was a full-time
student under age 24 at the end of 2021, and
certain other conditions are met, a parent can
elect to include the child's income on the pa-
rent's return. If this election is made, the child
doesn't have to file a return. See Parent's Elec-
tion To Report Child's Interest and Dividends in
Pub. 929, Tax Rules for Children and Depend-
ents.
Self-Employed Persons
You are self-employed if you:
• Carry on a trade or business as a sole pro-
prietor,
• Are an independent contractor,
• Are a member of a partnership, or
• Are in business for yourself in any other
way.
Self-employment can include work in addi-
tion to your regular full-time business activities,
such as certain part-time work you do at home
or in addition to your regular job.
You must file a return if your gross income is
at least as much as the filing requirement
amount for your filing status and age (shown in
Table 1-1). Also, you must file Form 1040 or
1040-SR and Schedule SE (Form 1040),
Self-Employment Tax, if:
1. Your net earnings from self-employment
(excluding church employee income) were
$400 or more, or
2. You had church employee income of
$108.28 or more. (See Table 1-3.)
Use Schedule SE (Form 1040) to figure your
self-employment tax. Self-employment tax is
comparable to the social security and Medicare
tax withheld from an employee's wages. For
more information about this tax, see Pub. 334,
Tax Guide for Small Business.
Employees of foreign governments or in-
ternational organizations. If you are a U.S.
citizen who works in the United States for an in-
ternational organization, a foreign government,
or a wholly owned instrumentality of a foreign
government, and your employer isn't required to
withhold social security and Medicare taxes
from your wages, you must include your earn-
ings from services performed in the United
States when figuring your net earnings from
self-employment.
Ministers. You must include income from
services you performed as a minister when fig-
uring your net earnings from self-employment,
unless you have an exemption from self-em-
ployment tax. This also applies to Christian Sci-
ence practitioners and members of a religious
order who have not taken a vow of poverty. For
more information, see Pub. 517.
Aliens
Your status as an alien (resident, nonresident,
or dual-status) determines whether and how
you must file an income tax return.
The rules used to determine your alien sta-
tus are discussed in Pub. 519, U.S. Tax Guide
for Aliens.
Resident alien. If you are a resident alien for
the entire year, you must file a tax return follow-
ing the same rules that apply to U.S. citizens.
Use the forms discussed in this publication.
Nonresident alien. If you are a nonresident
alien, the rules and tax forms that apply to you
are different from those that apply to U.S. citi-
zens and resident aliens. See Pub. 519 to find
out if U.S. income tax laws apply to you and
which forms you should file.
Dual-status taxpayer. If you are a resident
alien for part of the tax year and a nonresident
alien for the rest of the year, you are a dual-sta-
tus taxpayer. Different rules apply for each part
of the year. For information on dual-status tax-
payers, see Pub. 519.
Who Should File
Even if you don't have to file, you should file a
federal income tax return to get money back if
any of the following conditions apply.
1. You had federal income tax withheld or
made estimated tax payments.
2. You qualify for the earned income credit.
See Pub. 596, Earned Income Credit
(EIC), for more information.
3. You qualify for the refundable child tax
credit or additional child tax credit. See
chapter 14 for more information.
4. You qualify for the premium tax credit. See
Pub. 974, Premium Tax Credit (PTC), for
more information.
5. You qualify for the health coverage tax
credit. See Form 8885, Health Coverage
Tax Credit, and its instructions, for more
information.
6. You qualify for the American opportunity
credit. See Pub. 970, Tax Benefits for Ed-
ucation, for more information.
7. You qualify for the credit for federal tax on
fuels. See chapter 13 for more informa-
tion.
8. You qualify for the child and dependent
care credit.
Form 1040 or 1040-SR
Use Form 1040 or 1040-SR to file your return.
(But also see Why Should I File Electronically,
later.)
You can use Form 1040 or 1040-SR to re-
port all types of income, deductions, and cred-
its.
Page 8 Chapter 1 Filing Information
Why Should I File
Electronically?
Electronic Filing
If your adjusted gross income (AGI) is less than
a certain amount, you are eligible for Free File,
a free tax software service offered by IRS part-
ners, to prepare and e-file your return for free. If
your income is over the amount, you are still eli-
gible for Free File Fillable Forms, an electronic
version of IRS paper forms. Table 1-4 lists the
free ways to electronically file your return.
IRS e-file uses automa-
tion to replace most of the
manual steps needed to process paper returns.
As a result, the processing of e-file returns is
faster and more accurate than the processing of
paper returns. However, as with a paper return,
you are responsible for making sure your return
contains accurate information and is filed on
time.
If your return is filed with IRS e-file, you will re-
ceive an acknowledgment that your return was
received and accepted. If you owe tax, you can
e-file and pay electronically. The IRS has pro-
cessed more than one billion e-filed returns
safely and securely. Using e-file doesn't affect
your chances of an IRS examination of your re-
turn.
Requirements for an electronic return sig-
nature. To file your return electronically, you
must sign the return electronically using a per-
sonal identification number (PIN). If you are fil-
ing online, you must use a Self-Select PIN. For
2021, if we issued you an identity protection
personal identification number (IP PIN) (as de-
scribed in more detail below), all six digits of
your IP PIN must appear in the IP PIN spaces
provided next to the space for your occupation
for your electronic signature to be complete.
Failure to include an issued IP PIN on the elec-
tronic return will result in an invalid signature
and a rejected return. If you are filing a joint re-
turn and both taxpayers were issued an IP PIN,
enter both IP PINs in the spaces provided. If
you are filing electronically using a tax practi-
tioner, you can use a Self-Select PIN or a Prac-
titioner PIN.
Self-Select PIN. The Self-Select PIN method
allows you to create your own PIN. If you are
married filing jointly, you and your spouse will
each need to create a PIN and enter these PINs
as your electronic signatures.
A PIN is any combination of five digits you
choose except five zeros. If you use a PIN,
there is nothing to sign and nothing to mail—not
even your Forms W-2.
Your electronic return is considered a valid
signed return only when it includes your PIN;
last name; date of birth; IP PIN, if applicable;
and AGI from your originally filed 2020 federal
income tax return, if applicable. If you're filing
jointly, your electronic return must also include
your spouse's PIN; last name; date of birth; IP
PIN, if applicable; and AGI, if applicable, in or-
der to be considered validly signed. Don't use
AGI from an amended return (Form 1040-X) or
a math error correction made by the IRS. AGI is
the amount shown on your 2020 Form 1040 or
Form 1040-SR, line 11. If you don't have your
2020 income tax return, you can request a tran-
script by using our automated self-service tool.
Go to IRS.gov/Transcript. (If you filed electroni-
cally last year, you, and your spouse if filing
jointly, may use your prior year PIN to verify
your identity instead of your prior year AGI. The
prior year PIN is the five-digit PIN you used to
electronically sign your 2020 return.) You will
also be prompted to enter your date of birth.
You can’t use the Self-Select PIN
method if you are a first-time filer under
age 16 at the end of 2021.
Practitioner PIN. The Practitioner PIN method
allows you to authorize your tax practitioner to
enter or generate your PIN. Your electronic re-
turn is considered a validly signed return only
when it includes your PIN; last name; date of
birth; and IP PIN, if applicable. If you’re filing
jointly, your electronic return must also include
your spouse’s PIN; last name; date of birth; and
IP PIN, if applicable, in order to be considered a
validly signed return. The practitioner can pro-
vide you with details.
Form 8453. You must send in a paper Form
8453 if you have to attach certain forms or other
documents that can’t be electronically filed. For
details, see Form 8453. For more details, visit
IRS.gov/efile.
Identity Protection PIN. If the IRS gave you
an identity protection personal identification
number (IP PIN), enter it in the spaces provided
on your tax form. If the IRS hasn’t given you this
type of number, leave these spaces blank. For
more information, see the Instructions for Form
1040.CAUTION
!
2021 Filing Requirements for Dependents
See chapter 3 to find out if someone can claim you as a dependent.
If your parents (or someone else) can claim you as a dependent, use this table to see if you
must file a return. (See Table 1-3 for other situations when you must file.)
In this table, unearned income includes taxable interest, ordinary dividends, and capital gain
distributions. It also includes unemployment compensation, taxable social security benefits,
pensions, annuities, and distributions of unearned income from a trust. Earned income includes
salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. (See
Scholarships and fellowships in chapter 8.) Gross income is the total of your earned and
unearned income.
Single dependents—Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
• Your unearned income was more than $1,100.
• Your earned income was more than $12,550.
• Your gross income was more than the larger of:
• $1,100, or
• Your earned income (up to $12,200) plus $350.
Yes. You must file a return if any of the following apply.
• Your unearned income was more than $2,800 ($4,500 if 65 or older and blind).
• Your earned income was more than $14,250 ($15,950 if 65 or older and blind).
• Your gross income was more than the larger of:
• $2,800 ($4,500 if 65 or older and blind), or
• Your earned income (up to $12,200) plus $2,050 ($3,750 if 65 or older and
blind).
Married dependents—Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
• Your unearned income was more than $1,100.
• Your earned income was more than $12,550.
• Your gross income was at least $5 and your spouse files a separate return and
itemizes deductions.
• Your gross income was more than the larger of:
• $1,100, or
• Your earned income (up to $12,200) plus $350.
Yes. You must file a return if any of the following apply.
• Your unearned income was more than $2,450 ($3,800 if 65 or older and blind).
• Your earned income was more than $13,900 ($15,250 if 65 or older and blind).
• Your gross income was at least $5 and your spouse files a separate return and
itemizes deductions.
• Your gross income was more than the larger of:
• $2,450 ($3,800 if 65 or older and blind), or
• Your earned income (up to $12,200) plus $1,700 ($3,050 if 65 or older and
blind).
Table 1-2.
Chapter 1 Filing Information Page 9
All taxpayers are now eligible for an IP
PIN. For more information, see Pub.
5477. To apply for an IP PIN, go to
IRS.gov/IPPIN and use the Get an IP PIN tool.
Power of attorney. If an agent is signing your
return for you, a power of attorney (POA) must
be filed. Attach the POA to Form 8453 and file it
using that form's instructions. See Signatures,
later, for more information on POAs.
State returns. In most states, you can file an
electronic state return simultaneously with your
federal return. For more information, check with
your local IRS office, state tax agency, tax pro-
fessional, or the IRS website at IRS.gov/efile.
Refunds. You can have a refund check mailed
to you, or you can have your refund deposited
directly to your checking or savings account or
split among two or three accounts. With e-file,
your refund will be issued faster than if you filed
on paper.
As with a paper return, you may not get all of
your refund if you owe certain past-due
amounts, such as federal tax, state income tax,
state unemployment compensation debts, child
support, spousal support, or certain other fed-
eral nontax debts, such as student loans. See
Offset against debts under Refunds, later.
Refund inquiries. Information about your re-
turn will generally be available within 24 hours
after the IRS receives your e-filed return. See
Refund Information, later.
Amount you owe. To avoid late-payment pen-
alties and interest, pay your taxes in full by AprilTIP
18, 2022 (for most people). See How To Pay,
later, for information on how to pay the amount
you owe.
Using Your Personal Computer
You can file your tax return in a fast,
easy, and convenient way using your
personal computer. A computer with In-
ternet access and tax preparation software are
all you need. Best of all, you can e-file from the
comfort of your home 24 hours a day, 7 days a
week.
IRS-approved tax preparation software is avail-
able for online use on the Internet, for download
from the Internet, and in retail stores. For infor-
mation, visit IRS.gov/efile.
Through Employers and Financial
Institutions
Some businesses offer free e-file to their em-
ployees, members, or customers. Others offer it
for a fee. Ask your employer or financial institu-
tion if they offer IRS e-file as an employee,
member, or customer benefit.
Free Help With Your Return
The Volunteer Income Tax Assistance (VITA)
program offers free tax help to people who gen-
erally make $58,000 or less, persons with
Table 1-4. Free Ways To e-file
Use Free File for free tax software and free e-file.
• IRS partners offer name-brand products for free.
• Many taxpayers are eligible for Free File software.
• Everyone is eligible for Free File Fillable Forms, an electronic version of IRS paper forms.
• Free File software and Free File Fillable Forms are available only at IRS.gov/FreeFile.
Use VITA/TCE for free tax help from volunteers and free e-file.
• Volunteers prepare your return and e-file it for free.
• Some sites also offer do-it-yourself software.
• You are eligible based either on your income or age.
• Sites are located nationwide. Find one near you by visiting IRS.gov/VITA.
Table 1-3. Other Situations When You Must File a 2021 Return
You must file a return if any of the seven conditions below apply for 2021.
1. You owe any special taxes, including any of the following.
a. Alternative minimum tax.
b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if
you are filing a return only because you owe this tax, you can file Form 5329 by itself.
c. Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.
d. Social security and Medicare tax on tips you didn't report to your employer or on wages you received from an employer who
didn't withhold these taxes.
e. Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer on
group-term life insurance and additional taxes on health savings accounts. See the instructions for Schedule 2 (Form 1040),
line 8.
f. Recapture taxes. See the instructions for Forms 1040 and 1040-SR, line 16, and Schedule 2 (Form 1040), lines 10 through
18.
2. You (or your spouse, if filing jointly) received health savings account, Archer MSA, or Medicare Advantage MSA distributions.
3. You had net earnings from self-employment of at least $400.
4. You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer
social security and Medicare taxes.
5. Advance payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage
through the Marketplace. You or whoever enrolled you should have received Form(s) 1095-A showing the amount of the
advance payments.
6. Advance payments of the health coverage tax credit were made for you, your spouse, or a dependent. You or whoever
enrolled you should have received Form(s) 1099-H showing the amount of the advance payments.
7. You are required to include amounts in income under section 965 or you have a net tax liability under section 965 that you are
paying in installments under section 965(h) or deferred by making an election under section 965(i).
Page 10 Chapter 1 Filing Information
disabilities, and limited-English-speaking tax-
payers who need help preparing their own tax
returns. The Tax Counseling for the Elderly
(TCE) program offers free tax help for all tax-
payers, particularly those who are 60 years of
age and older. TCE volunteers specialize in an-
swering questions about pensions and retire-
ment-related issues unique to seniors.
You can go to IRS.gov to see your options
for preparing and filing your return, which in-
clude the following.
• Free File. Go to IRS.gov/FreeFile. See if
you qualify to use brand-name software to
prepare and e-file your federal tax return
for free.
• VITA. Go to IRS.gov/VITA, download the
free IRS2Go app, or call 800-906-9887 to
find the nearest VITA location for free tax
return preparation.
• TCE. Go to IRS.gov/TCE, download the
free IRS2Go app, or call 888-227-7669 to
find the nearest TCE location for free tax
return preparation.
Using a Tax Professional
Many tax professionals electronically file tax re-
turns for their clients. You may personally enter
your PIN or complete Form 8879, IRS e-file Sig-
nature Authorization, to authorize the tax pro-
fessional to enter your PIN on your return.
Note. Tax professionals may charge a fee
for IRS e-file. Fees can vary depending on the
professional and the specific services rendered.
When Do I
Have To File?
April 18, 2022, is the due date for filing your
2021 income tax return if you use the calendar
year. The due date is April 18, instead of April
15, because of the Emancipation Day holiday in
the District of Columbia—even if you don't live
in the District of Columbia. If you live in Maine or
Massachusetts, you have until April 19, 2022.
That is because of the Patriots' Day holiday in
those states. For a quick view of due dates for
filing a return with or without an extension of
time to file (discussed later), see Table 1-5.
If you use a fiscal year (a year ending on the
last day of any month except December, or a
52-53-week year), your income tax return is due
by the 15th day of the 4th month after the close
of your fiscal year.
When the due date for doing any act for tax
purposes—filing a return, paying taxes,
etc.—falls on a Saturday, Sunday, or legal holi-
day, the due date is delayed until the next busi-
ness day.
Filing paper returns on time. Your paper re-
turn is filed on time if it is mailed in an envelope
that is properly addressed, has enough post-
age, and is postmarked by the due date. If you
send your return by registered mail, the date of
the registration is the postmark date. The regis-
tration is evidence that the return was delivered.
If you send a return by certified mail and have
your receipt postmarked by a postal employee,
the date on the receipt is the postmark date.
The postmarked certified mail receipt is evi-
dence that the return was delivered.
Private delivery services. If you choose to
mail your return, you can use certain private de-
livery services designated by the IRS to meet
the “timely mailing treated as timely filing/
paying” rule for tax returns and payments.
These private delivery services include only the
following.
• FedEx First Overnight, FedEx Priority
Overnight, FedEx Standard Overnight, Fe-
dEx 2 Day, FedEx International Next Flight
Out, FedEx International Priority, FedEx In-
ternational First, and FedEx International
Economy.
• DHL Express 9:00, DHL Express 10:30,
DHL Express 12:00, DHL Express World-
wide, DHL Express Envelope, DHL Import
Express 10:30, DHL Import Express 12:00,
and DHL Import Express Worldwide.
• UPS Next Day Air Early A.M., UPS Next
Day Air, UPS Next Day Air Saver, UPS 2nd
Day Air, UPS 2nd Day Air A.M., UPS
Worldwide Express Plus, and UPS World-
wide Express.
To check for any updates to the list of desig-
nated private delivery services, go to IRS.gov/
PDS. For the IRS mailing addresses to use if
you’re using a private delivery service, go to
IRS.gov/PDSStreetAddresses.
The private delivery service can tell you how
to get written proof of the mailing date.
Filing electronic returns on time. If you use
IRS e-file, your return is considered filed on
time if the authorized electronic return transmit-
ter postmarks the transmission by the due date.
An authorized electronic return transmitter is a
participant in the IRS e-file program that trans-
mits electronic tax return information directly to
the IRS.
The electronic postmark is a record of when
the authorized electronic return transmitter re-
ceived the transmission of your electronically
filed return on its host system. The date and
time in your time zone controls whether your
electronically filed return is timely.
Filing late. If you don't file your return by the
due date, you may have to pay a failure-to-file
penalty and interest. For more information, see
Penalties, later. Also see Interest under Amount
You Owe, later.
If you were due a refund but you didn't file a
return, you must generally file within 3 years
from the date the return was due (including ex-
tensions) to get that refund.
Nonresident alien. If you are a nonresident
alien and earn wages subject to U.S. income
tax withholding, your 2021 U.S. income tax re-
turn (Form 1040-NR) is due by:
• April 18, 2022, if you use a calendar year;
or
• The 15th day of the 4th month after the
end of your fiscal year, if you use a fiscal
year.
If you don't earn wages subject to U.S. in-
come tax withholding, your return is due by:
• June 15, 2022, if you use a calendar year;
or
• The 15th day of the 6th month after the
end of your fiscal year, if you use a fiscal
year.
See Pub. 519 for more filing information.
Filing for a decedent. If you must file a final
income tax return for a taxpayer who died dur-
ing the year (a decedent), the return is due by
the 15th day of the 4th month after the end of
the decedent's normal tax year. See Pub. 559.
Extensions of Time To File
You may be able to get an extension of time to
file your return. There are three types of situa-
tions where you may qualify for an extension.
• Automatic extensions.
• You are outside the United States.
• You are serving in a combat zone.
Automatic Extension
If you can’t file your 2021 return by the due
date, you may be able to get an automatic
6-month extension of time to file.
Example. If your return is due on April 18,
2022, you will have until October 17, 2022, to
file.
If you don't pay the tax due by the regu-
lar due date (April 15 for most taxpay-
ers), you will owe interest. You may
also be charged penalties, discussed later.
How to get the automatic extension. You
can get the automatic extension by:
1. Using IRS e-file (electronic filing), or
2. Filing a paper form.
E-file options. There are two ways you can
use e-file to get an extension of time to file.
Complete Form 4868 to use as a worksheet. If
you think you may owe tax when you file your
return, use Part II of the form to estimate your
balance due. If you e-file Form 4868 to the IRS,
don't send a paper Form 4868.CAUTION
!
When To File Your 2021 Return
For U.S. citizens and residents who file returns on a calendar year
basis.
For Most Taxpayers
For Certain Taxpayers
Outside
the United States
No extension requested April 18, 2022 June 15, 2022
Automatic extension October 17, 2022 October 17, 2022
Table 1-5.
Chapter 1 Filing Information Page 11
E-file using your personal computer or a
tax professional. You can use a tax software
package with your personal computer or a tax
professional to file Form 4868 electronically.
Free File and Free File Fillable Forms, both
available at IRS.gov, allow you to prepare and
e-file Form 4868 for free. You will need to pro-
vide certain information from your 2020 tax re-
turn. If you wish to make a payment by direct
transfer from your bank account, see Pay online
under How To Pay, later, in this chapter.
E-file and pay by credit or debit card or
by direct transfer from your bank account.
You can get an extension by paying part or all of
your estimate of tax due by using a credit or
debit card or by direct transfer from your bank
account. You can do this by phone or over the
Internet. You don't file Form 4868. See Pay on-
line under How To Pay, later, in this chapter.
Filing a paper Form 4868. You can get an ex-
tension of time to file by filing a paper Form
4868. If you are a fiscal year taxpayer, you must
file a paper Form 4868. Mail it to the address
shown in the form instructions.
If you want to make a payment with the
form, make your check or money order payable
to “United States Treasury.” Write your SSN,
daytime phone number, and “2021 Form 4868”
on your check or money order.
When to file. You must request the automatic
extension by the due date for your return. You
can file your return any time before the 6-month
extension period ends.
When you file your return. Enter any pay-
ment you made related to the extension of time
to file on Schedule 3 (Form 1040), line 10.
Individuals Outside the
United States
You are allowed an automatic 2-month exten-
sion, without filing Form 4868 (until June 15,
2022, if you use the calendar year), to file your
2021 return and pay any federal income tax due
if:
1. You are a U.S. citizen or resident; and
2. On the due date of your return:
a. You are living outside the United
States and Puerto Rico, and your
main place of business or post of duty
is outside the United States and Pu-
erto Rico; or
b. You are in military or naval service on
duty outside the United States and
Puerto Rico.
However, if you pay the tax due after the
regular due date (April 15 for most taxpayers),
interest will be charged from that date until the
date the tax is paid.
If you served in a combat zone or qualified
hazardous duty area, you may be eligible for a
longer extension of time to file. See Individuals
Serving in Combat Zone, later, for special rules
that apply to you.
Married taxpayers. If you file a joint return,
only one spouse has to qualify for this auto-
matic extension. If you and your spouse file
separate returns, the automatic extension ap-
plies only to the spouse who qualifies.
How to get the extension. To use this auto-
matic extension, you must attach a statement to
your return explaining what situation qualified
you for the extension. (See the situations listed
under (2), earlier.)
Extensions beyond 2 months. If you can’t file
your return within the automatic 2-month exten-
sion period, you may be able to get an addi-
tional 4-month extension, for a total of 6
months. File Form 4868 and check the box on
line 8.
No further extension. An extension of more
than 6 months will generally not be granted.
However, if you are outside the United States
and meet certain tests, you may be granted a
longer extension. For more information, see
When To File and Pay in Pub. 54.
Individuals Serving in
Combat Zone
The deadline for filing your tax return, paying
any tax you may owe, and filing a claim for re-
fund is automatically extended if you serve in a
combat zone. This applies to members of the
Armed Forces, as well as merchant marines
serving aboard vessels under the operational
control of the Department of Defense, Red
Cross personnel, accredited correspondents,
and civilians under the direction of the Armed
Forces in support of the Armed Forces.
Combat zone. A combat zone is any area the
President of the United States designates by
executive order as an area in which the U.S.
Armed Forces are engaging or have engaged in
combat. An area usually becomes a combat
zone and ceases to be a combat zone on the
dates the President designates by executive or-
der. For purposes of the automatic extension,
the term “combat zone” includes the following
areas.
1. The Arabian peninsula area, effective Jan-
uary 17, 1991.
2. The Kosovo area, effective March 24,
1999.
3. The Afghanistan area, effective Septem-
ber 19, 2001.
See Pub. 3 for more detailed information on
the locations comprising each combat zone.
Pub. 3 also has information about other tax ben-
efits available to military personnel serving in a
combat zone.
Extension period. The deadline for filing your
return, paying any tax due, filing a claim for re-
fund, and taking other actions with the IRS is
extended in two steps. First, your deadline is
extended for 180 days after the later of:
1. The last day you are in a combat zone or
the last day the area qualifies as a combat
zone, or
2. The last day of any continuous qualified
hospitalization (defined later) for injury
from service in the combat zone.
Second, in addition to the 180 days, your
deadline is also extended by the number of
days you had left to take action with the IRS
when you entered the combat zone. For exam-
ple, you have 31/2 months (January 1–April 15)
to file your tax return. Any days left in this period
when you entered the combat zone (or the en-
tire 31/2 months if you entered it before the be-
ginning of the year) are added to the 180 days.
See Extension of Deadlines in Pub. 3 for more
information.
The rules on the extension for filing your re-
turn also apply when you are deployed outside
the United States (away from your permanent
duty station) while participating in a designated
contingency operation.
Qualified hospitalization. The hospitalization
must be the result of an injury received while
serving in a combat zone or a contingency op-
eration. Qualified hospitalization means:
• Any hospitalization outside the United
States, and
• Up to 5 years of hospitalization in the Uni-
ted States.
See Pub. 3 for more information on qualified
hospitalizations.
How Do I Prepare
My Return?
This section explains how to get ready to fill in
your tax return and when to report your income
and expenses. It also explains how to complete
certain sections of the form. You may find Ta-
ble 1-6 helpful when you prepare your paper re-
turn.
Six Steps for Preparing
Your Paper Return
1 — Get your records together for income
and expenses.
2 — Get the forms, schedules, and
publications you need.
3 — Fill in your return.
4 — Check your return to make sure it is
correct.
5 — Sign and date your return.
6 — Attach all required forms and
schedules.
Electronic returns. For information you may
find useful in preparing an electronic return, see
Why Should I File Electronically, earlier.
Substitute tax forms. You can’t use your own
version of a tax form unless it meets the re-
quirements explained in Pub. 1167.
Form W-2. If you were an employee, you
should receive Form W-2 from your employer.
You will need the information from this form to
prepare your return. See Form W-2 under
Credit for Withholding and Estimated Tax for
2021 in chapter 4.
Your employer is required to provide or send
Form W-2 to you no later than January 31,
2022. If it is mailed, you should allow adequate
time to receive it before contacting your em-
ployer. If you still don't get the form by early
Table 1-6.
Page 12 Chapter 1 Filing Information
February, the IRS can help you by requesting
the form from your employer. When you request
IRS help, be prepared to provide the following
information.
• Your name, address (including ZIP code),
and phone number.
• Your SSN.
• Your dates of employment.
• Your employer's name, address (including
ZIP code), and phone number.
Form 1099. If you received certain types of in-
come, you may receive a Form 1099. For exam-
ple, if you received taxable interest of $10 or
more, the payer is required to provide or send
Form 1099 to you no later than January 31,
2022 (or by February 15, 2022, if furnished by a
broker). If it is mailed, you should allow ade-
quate time to receive it before contacting the
payer. If you still don't get the form by February
15 (or by March 1, 2022, if furnished by a
broker), call the IRS for help.
When Do I Report My
Income and Expenses?
You must figure your taxable income on the ba-
sis of a tax year. A “tax year” is an annual ac-
counting period used for keeping records and
reporting income and expenses. You must ac-
count for your income and expenses in a way
that clearly shows your taxable income. The
way you do this is called an accounting method.
This section explains which accounting periods
and methods you can use.
Accounting Periods
Most individual tax returns cover a calendar
year—the 12 months from January 1 through
December 31. If you don't use a calendar year,
your accounting period is a fiscal year. A regu-
lar fiscal year is a 12-month period that ends on
the last day of any month except December. A
52-53-week fiscal year varies from 52 to 53
weeks and always ends on the same day of the
week.
You choose your accounting period (tax
year) when you file your first income tax return.
It can’t be longer than 12 months.
More information. For more information on
accounting periods, including how to change
your accounting period, see Pub. 538.
Accounting Methods
Your accounting method is the way you account
for your income and expenses. Most taxpayers
use either the cash method or an accrual
method. You choose a method when you file
your first income tax return. If you want to
change your accounting method after that, you
must generally get IRS approval. Use Form
3115 to request an accounting method change.
Cash method. If you use this method, report
all items of income in the year in which you ac-
tually or constructively receive them. Generally,
you deduct all expenses in the year you actually
pay them. This is the method most individual
taxpayers use.
Constructive receipt. Generally, you con-
structively receive income when it is credited to
your account or set apart in any way that makes
it available to you. You don't need to have phys-
ical possession of it. For example, interest
credited to your bank account on December 31,
2021, is taxable income to you in 2021 if you
could have withdrawn it in 2021 (even if the
amount isn't entered in your records or with-
drawn until 2022).
Garnished wages. If your employer uses
your wages to pay your debts, or if your wages
are attached or garnished, the full amount is
constructively received by you. You must in-
clude these wages in income for the year you
would have received them.
Debts paid for you. If another person can-
cels or pays your debts (but not as a gift or
loan), you have constructively received the
amount and must generally include it in your
gross income for the year. See Canceled Debts
in chapter 8 for more information.
Payment to third party. If a third party is
paid income from property you own, you have
constructively received the income. It is the
same as if you had actually received the income
and paid it to the third party.
Payment to an agent. Income an agent re-
ceives for you is income you constructively re-
ceived in the year the agent receives it. If you
indicate in a contract that your income is to be
paid to another person, you must include the
amount in your gross income when the other
person receives it.
Check received or available. A valid check
that was made available to you before the end
of the tax year is constructively received by you
in that year. A check that was “made available
to you” includes a check you have already re-
ceived, but not cashed or deposited. It also in-
cludes, for example, your last paycheck of the
year that your employer made available for you
to pick up at the office before the end of the
year. It is constructively received by you in that
year whether or not you pick it up before the
end of the year or wait to receive it by mail after
the end of the year.
No constructive receipt. There may be
facts to show that you didn't constructively re-
ceive income.
Example. Alice Johnson, a teacher, agreed
to her school board's condition that, in her ab-
sence, she would receive only the difference
between her regular salary and the salary of a
substitute teacher hired by the school board.
Therefore, Alice didn't constructively receive
the amount by which her salary was reduced to
pay the substitute teacher.
Accrual method. If you use an accrual
method, you generally report income when you
earn it, rather than when you receive it. You
generally deduct your expenses when you incur
them, rather than when you pay them.
Income paid in advance. An advance pay-
ment of income is generally included in gross
income in the year you receive it. Your method
of accounting doesn't matter as long as the in-
come is available to you. An advance payment
may include rent or interest you receive in
advance and pay for services you will perform
later.
A limited deferral until the next tax year may
be allowed for certain advance payments. See
Pub. 538 for specific information.
Additional information. For more information
on accounting methods, including how to
change your accounting method, see Pub. 538.
Social Security Number
(SSN)
You must enter your SSN on your return. If you
are married, enter the SSNs for both you and
your spouse, whether you file jointly or sepa-
rately.
If you are filing a joint return, include the
SSNs in the same order as the names. Use this
same order in submitting other forms and docu-
ments to the IRS.
If you, or your spouse if filing jointly,
don't have an SSN (or ITIN) issued on
or before the due date of your 2021 re-
turn (including extensions), you can't claim cer-
tain tax benefits on your original or an amended
2021 return.
Once you are issued an SSN, use it to file
your tax return. Use your SSN to file your tax re-
turn even if your SSN does not authorize em-
ployment or if you have been issued an SSN
that authorizes employment and you lose your
employment authorization. An ITIN will not be
issued to you once you have been issued an
SSN. If you received your SSN after previously
using an ITIN, stop using your ITIN. Use your
SSN instead.
Check that both the name and SSN on your
Form 1040 or 1040-SR, W-2, and 1099 agree
with your social security card. If they don't, cer-
tain deductions and credits on your Form 1040
or 1040-SR may be reduced or disallowed and
you may not receive credit for your social secur-
ity earnings. If your Form W-2 shows an incor-
rect SSN or name, notify your employer or the
form-issuing agent as soon as possible to make
sure your earnings are credited to your social
security record. If the name or SSN on your so-
cial security card is incorrect, call the Social Se-
curity Administration (SSA) at 800-772-1213.
Name change. If you changed your name be-
cause of marriage, divorce, etc., be sure to re-
port the change to your local SSA office before
filing your return. This prevents delays in pro-
cessing your return and issuing refunds. It also
safeguards your future social security benefits.
Dependent's SSN. You must provide the SSN
of each dependent you claim, regardless of the
dependent's age. This requirement applies to
all dependents (not just your children) claimed
on your tax return.
Your child must have an SSN valid for
employment issued before the due
date of your 2021 return (including ex-
tensions) to be considered a qualifying child for
certain tax benefits on your original or amended
2021 return. See chapter 14.
Exception. If your child was born and died
in 2021 and didn't have an SSN, enter “DIED” in
column (2) of the Dependents section of FormCAUTION
!CAUTION
!
Chapter 1 Filing Information Page 13
1040 or 1040-SR and include a copy of the
child's birth certificate, death certificate, or hos-
pital records. The document must show that the
child was born alive.
No SSN. File Form SS-5, Application for a So-
cial Security Card, with your local SSA office to
get an SSN for yourself or your dependent. It
usually takes about 2 weeks to get an SSN. If
you or your dependent isn't eligible for an SSN,
see Individual taxpayer identification number
(ITIN), later.
If you are a U.S. citizen or resident alien, you
must show proof of age, identity, and citizen-
ship or alien status with your Form SS-5. If you
are 12 or older and have never been assigned
an SSN, you must appear in person with this
proof at an SSA office.
Form SS-5 is available at any SSA office, on
the Internet at SSA.gov/forms/ss-5.pdf, or by
calling 800-772-1213. If you have any questions
about which documents you can use as proof of
age, identity, or citizenship, contact your SSA
office.
If your dependent doesn't have an SSN by
the time your return is due, you may want to ask
for an extension of time to file, as explained ear-
lier under When Do I Have To File.
If you don't provide a required SSN or if you
provide an incorrect SSN, your tax may be in-
creased and any refund may be reduced.
Adoption taxpayer identification number
(ATIN). If you are in the process of adopting a
child who is a U.S. citizen or resident and can’t
get an SSN for the child until the adoption is fi-
nal, you can apply for an ATIN to use instead of
an SSN.
File Form W-7A, Application for Taxpayer
Identification Number for Pending U.S. Adop-
tions, with the IRS to get an ATIN if all of the fol-
lowing are true.
• You have a child living with you who was
placed in your home for legal adoption.
• You can’t get the child's existing SSN even
though you have made a reasonable at-
tempt to get it from the birth parents, the
placement agency, and other persons.
• You can’t get an SSN for the child from the
SSA because, for example, the adoption
isn't final.
• You are eligible to claim the child as a de-
pendent on your tax return.
After the adoption is final, you must apply for an
SSN for the child. You can’t continue using the
ATIN.
See Form W-7A for more information.
Nonresident alien spouse. If your spouse is a
nonresident alien, your spouse must have either
an SSN or an ITIN if:
• You file a joint return, or
• Your spouse is filing a separate return.
If your spouse isn't eligible for an SSN, see the
following discussion on ITINs.
Individual taxpayer identification number
(ITIN). The IRS will issue you an ITIN if you are
a nonresident or resident alien and you don't
have and aren’t eligible to get an SSN. This also
applies to an alien spouse or dependent. To ap-
ply for an ITIN, file Form W-7 with the IRS. It
usually takes about 7 weeks to get an ITIN. En-
ter the ITIN on your tax return wherever an SSN
is requested.
Make sure your ITIN hasn’t expired. See In-
dividual taxpayer identification number (ITIN)
renewal, earlier, for more information on expira-
tion and renewal of ITINs. You can also find
more information at IRS.gov/ITIN.
If you are applying for an ITIN for your-
self, your spouse, or a dependent in or-
der to file your tax return, attach your
completed tax return to your Form W-7. See the
Form W-7 instructions for how and where to file.
You can’t e-file a return using an ITIN in
the calendar year the ITIN is issued;
however, you can e-file returns in the
following years.
ITIN for tax use only. An ITIN is for federal
tax use only. It doesn't entitle you to social se-
curity benefits or change your employment or
immigration status under U.S. law.
Penalty for not providing social security
number. If you don't include your SSN or the
SSN of your spouse or dependent as required,
you may have to pay a penalty. See the discus-
sion on Penalties, later, for more information.
SSN on correspondence. If you write to the
IRS about your tax account, be sure to include
your SSN (and the name and SSN of your
spouse, if you filed a joint return) in your corre-
spondence. Because your SSN is used to iden-
tify your account, this helps the IRS respond to
your correspondence promptly.
Presidential Election
Campaign Fund
This fund helps pay for Presidential election
campaigns. The fund also helps pay for pedia-
tric medical research. If you want $3 to go to
this fund, check the box. If you are filing a joint
return, your spouse can also have $3 go to the
fund. If you check the box, your tax or refund
won't change.
Computations
The following information may be useful in mak-
ing the return easier to complete.
Rounding off dollars. You can round off cents
to whole dollars on your return and schedules. If
you do round to whole dollars, you must round
all amounts. To round, drop amounts under 50
cents and increase amounts from 50 to 99
cents to the next dollar. For example, $1.39 be-
comes $1 and $2.50 becomes $3.
If you have to add two or more amounts to
figure the amount to enter on a line, include
cents when adding the amounts and round off
only the total.
If you are entering amounts that include
cents, make sure to include the decimal point.
There is no cents column on Form 1040 or
1040-SR.
Equal amounts. If you are asked to enter the
smaller or larger of two equal amounts, enter
that amount.TIPCAUTION
!
Negative amounts. If you file a paper return
and you need to enter a negative amount, put
the amount in parentheses rather than using a
minus sign. To combine positive and negative
amounts, add all the positive amounts together
and then subtract the negative amounts.
Attachments
Depending on the form you file and the items
reported on your return, you may have to com-
plete additional schedules and forms and attach
them to your paper return.
You may be able to file a paperless re-
turn using IRS e-file. There's nothing to
attach or mail, not even your Forms
W-2. See Why Should I File Electronically, ear-
lier.
Form W-2. Form W-2 is a statement from your
employer of wages and other compensation
paid to you and taxes withheld from your pay.
You should have a Form W-2 from each em-
ployer. If you file a paper return, be sure to at-
tach a copy of Form W-2 in the place indicated
on your return. For more information, see Form
W-2 in chapter 4.
Form 1099-R. If you received a Form 1099-R
showing federal income tax withheld, and you
file a paper return, attach a copy of that form in
the place indicated on your return.
Form 1040 or 1040-SR. If you file a paper re-
turn, attach any forms and schedules behind
Form 1040 or 1040-SR in order of the “Attach-
ment Sequence No.” shown in the upper right
corner of the form or schedule. Then, arrange
all other statements or attachments in the same
order as the forms and schedules they relate to
and attach them last. Don't attach items unless
required to do so.
Third Party Designee
If you want to allow your preparer, a friend, a
family member, or any other person you choose
to discuss your 2021 tax return with the IRS,
check the “Yes” box in the “Third Party Desig-
nee” area of your return. Also, enter the design-
ee's name, phone number, and any five digits
the designee chooses as his or her personal
identification number (PIN).
If you check the “Yes” box, you, and your
spouse if filing a joint return, are authorizing the
IRS to call the designee to answer any ques-
tions that arise during the processing of your re-
turn. You are also authorizing the designee to:
• Give information that is missing from your
return to the IRS;
• Call the IRS for information about the pro-
cessing of your return or the status of your
refund or payments;
• Receive copies of notices or transcripts re-
lated to your return, upon request; and
• Respond to certain IRS notices about math
errors, offsets (see Refunds, later), and re-
turn preparation.
You aren't authorizing the designee to re-
ceive any refund check, bind you to anythingTIP
Page 14 Chapter 1 Filing Information
(including any additional tax liability), or other-
wise represent you before the IRS. If you want
to expand the designee's authorization, see
Pub. 947.
The authorization will automatically end no
later than the due date (without any extensions)
for filing your 2022 tax return. This is April 18,
2023, for most people.
See your form instructions for more informa-
tion.
Signatures
You must sign and date your return. If you file a
joint return, both you and your spouse must
sign the return, even if only one of you had in-
come.
If you file a joint return, both spouses
are generally liable for the tax, and the
entire tax liability may be assessed
against either spouse. See chapter 2.
Your return isn't considered a valid return
unless you sign it in accordance with the re-
quirements in the instructions for your return.
You must handwrite your signature on your
return if you file it on paper. Digital, electronic,
or typed-font signatures are not valid signatures
for Forms 1040 or 1040-SR filed on paper.
If you electronically file your return, you can
use an electronic signature to sign your return in
accordance with the requirements contained in
the instructions for your return.
Failure to sign your return in accordance
with these requirements may prevent you from
obtaining a refund.
Enter your occupation. If you file a joint re-
turn, enter both your occupation and your spou-
se's occupation.
When someone can sign for you. You can
appoint an agent to sign your return if you are:
1. Unable to sign the return because of dis-
ease or injury,
2. Absent from the United States for a contin-
uous period of at least 60 days before the
due date for filing your return, or
3. Given permission to do so by the IRS of-
fice in your area.
Power of attorney. A return signed by an
agent in any of these cases must have a power
of attorney (POA) attached that authorizes the
agent to sign for you. You can use a POA that
states that the agent is granted authority to sign
the return, or you can use Form 2848. Part I of
Form 2848 must state that the agent is granted
authority to sign the return.
Court-appointed conservator, guardian, or
other fiduciary. If you are a court-appointed
conservator, guardian, or other fiduciary for a
mentally or physically incompetent individual
who has to file a tax return, sign your name for
the individual. File Form 56.
Unable to sign. If the taxpayer is mentally
competent but physically unable to sign the re-
turn or POA, a valid “signature” is defined under
state law. It can be anything that clearly indi-
cates the taxpayer's intent to sign. For example,CAUTION
!
the taxpayer's “X” with the signatures of two wit-
nesses might be considered a valid signature
under a state's law.
Spouse unable to sign. If your spouse is un-
able to sign for any reason, see Signing a joint
return in chapter 2.
Child's return. If a child has to file a tax return
but can’t sign the return, the child's parent,
guardian, or another legally responsible person
must sign the child's name, followed by the
words “By (your signature), parent for minor
child.”
Paid Preparer
Generally, anyone you pay to prepare, assist in
preparing, or review your tax return must sign it
and fill in the other blanks, including their Pre-
parer Tax Identification Number (PTIN), in the
paid preparer's area of your return.
Many preparers are required to e-file the tax
returns they prepare. They sign these e-filed re-
turns using their tax preparation software. How-
ever, you can choose to have your return com-
pleted on paper if you prefer. In that case, the
paid preparer can sign the paper return man-
ually or use a rubber stamp or mechanical de-
vice. The preparer is personally responsible for
affixing his or her signature to the return.
If the preparer is self-employed (that is, not
employed by any person or business to prepare
the return), he or she should check the self-em-
ployed box in the “Paid Preparer Use Only”
space on the return.
The preparer must give you a copy of your
return in addition to the copy filed with the IRS.
If you prepare your own return, leave this
area blank. If another person prepares your re-
turn and doesn't charge you, that person
shouldn't sign your return.
If you have questions about whether a pre-
parer must sign your return, contact any IRS of-
fice.
Refunds
When you complete your return, you will deter-
mine if you paid more income tax than you
owed. If so, you can get a refund of the amount
you overpaid or you can choose to apply all or
part of the overpayment to your next year's
(2022) estimated tax.
If you choose to have a 2021 overpay-
ment applied to your 2022 estimated
tax, you can’t change your mind and
have any of it refunded to you after the due date
(without extensions) of your 2021 return.
Follow the Instructions for Form 1040 to
complete the entries to claim your refund and/or
to apply your overpayment to your 2022 estima-
ted tax.
If your refund for 2021 is large, you
may want to decrease the amount of
income tax withheld from your pay in
2022. See chapter 4 for more information.CAUTION
!TIP
Instead of getting a pa-
per check, you may be
able to have your refund deposited directly into
your checking or savings account, including an
individual retirement arrangement (IRA). Follow
the Instructions for Form 1040 to request direct
deposit. If the direct deposit can’t be done, the
IRS will send a check instead.
Don't request a deposit of any part of your
refund to an account that isn't in your name.
Don't allow your tax preparer to deposit any part
of your refund into his or her account. The num-
ber of direct deposits to a single account or pre-
paid debit card is limited to three refunds a
year. After this limit is exceeded, paper checks
will be sent instead. Learn more at IRS.gov/
Individuals/Direct-Deposit-Limits.
IRA. You can have your refund (or part of it) di-
rectly deposited to a traditional IRA, Roth IRA,
or SEP-IRA, but not a SIMPLE IRA. You must
establish the IRA at a bank or financial institu-
tion before you request direct deposit.
TreasuryDirect®. You can request a deposit
of your refund to a TreasuryDirect® online ac-
count to buy U.S. Treasury marketable securi-
ties and savings bonds. For more information,
go to http://go.usa.gov/3KvcP.
Split refunds. If you choose direct deposit,
you may be able to split the refund and have it
deposited among two or three accounts or buy
up to $5,000 in paper or electronic series I sav-
ings bonds. Complete Form 8888 and attach it
to your return.
Overpayment less than one dollar. If your
overpayment is less than one dollar, you won't
get a refund unless you ask for it in writing.
Cashing your refund check. Cash your tax
refund check soon after you receive it. Checks
expire the last business day of the 12th month
of issue.
If your check has expired, you can apply to
the IRS to have it reissued.
Refund more or less than expected. If you
receive a check for a refund you aren’t entitled
to, or for an overpayment that should have been
credited to estimated tax, don't cash the check.
Call the IRS.
If you receive a check for more than the re-
fund you claimed, don't cash the check until you
receive a notice explaining the difference.
If your refund check is for less than you
claimed, it should be accompanied by a notice
explaining the difference. Cashing the check
doesn't stop you from claiming an additional
amount of refund.
If you didn't receive a notice and you have
any questions about the amount of your refund,
you should wait 2 weeks. If you still haven’t re-
ceived a notice, call the IRS.
Offset against debts. If you are due a refund
but haven’t paid certain amounts you owe, all or
part of your refund may be used to pay all or
part of the past-due amount. This includes
past-due federal income tax, other federal
debts (such as student loans), state income tax,
child and spousal support payments, and state
unemployment compensation debt. You will be
notified if the refund you claimed has been off-
set against your debts.Simple. Safe. Secure.
DIRECT DEPOSIT
Chapter 1 Filing Information Page 15
Joint return and injured spouse. When a
joint return is filed and only one spouse owes a
past-due amount, the other spouse can be con-
sidered an injured spouse. An injured spouse
should file Form 8379, Injured Spouse Alloca-
tion, if both of the following apply and the
spouse wants a refund of his or her share of the
overpayment shown on the joint return.
1. You aren’t legally obligated to pay the
past-due amount.
2. You made and reported tax payments
(such as federal income tax withheld from
your wages or estimated tax payments), or
claimed a refundable tax credit (see the
credits listed under Who Should File, ear-
lier).
Note. If the injured spouse's residence was
in a community property state at any time dur-
ing the tax year, special rules may apply. See
the Instructions for Form 8379.
If you haven’t filed your joint return and you
know that your joint refund will be offset, file
Form 8379 with your return. You should receive
your refund within 14 weeks from the date the
paper return is filed or within 11 weeks from the
date the return is filed electronically.
If you filed your joint return and your joint re-
fund was offset, file Form 8379 by itself. When
filed after offset, it can take up to 8 weeks to re-
ceive your refund. Don't attach the previously
filed tax return, but do include copies of all
Forms W-2 and W-2G for both spouses and
any Forms 1099 that show income tax withheld.
The processing of Form 8379 may be delayed if
these forms aren’t attached, or if the form is in-
complete when filed.
A separate Form 8379 must be filed for each
tax year to be considered.
An injured spouse claim is different
from an innocent spouse relief request.
An injured spouse uses Form 8379 to
request the division of the tax overpayment at-
tributed to each spouse. An innocent spouse
uses Form 8857, Request for Innocent Spouse
Relief, to request relief from joint liability for tax,
interest, and penalties on a joint return for items
of the other spouse (or former spouse) that
were incorrectly reported on the joint return. For
information on innocent spouses, see Relief
from joint responsibility under Filing a Joint Re-
turn in chapter 2.
Amount You Owe
When you complete your return, you will deter-
mine if you have paid the full amount of tax that
you owe. If you owe additional tax, you should
pay it with your return.
You don't have to pay if the amount
you owe is under $1.
If the IRS figures your tax for you, you will re-
ceive a bill for any tax that is due. You should
pay this bill within 30 days (or by the due date of
your return, if later). See Tax Figured by IRS in
chapter 13.CAUTION
!TIP
If you don't pay your tax when due, you
may have to pay a failure-to-pay pen-
alty. See Penalties, later. For more in-
formation about your balance due, see Pub.
594.
If the amount you owe for 2021 is large,
you may want to increase the amount
of income tax withheld from your pay or
make estimated tax payments for 2022. See
chapter 4 for more information.
How To Pay
You can pay online, by phone, by mobile de-
vice, in cash, or by check or money order. Don't
include any estimated tax payment for 2022 in
this payment. Instead, make the estimated tax
payment separately.
Bad check or payment. The penalty for writ-
ing a bad check to the IRS is $25 or 2% of the
check, whichever is more. This penalty also ap-
plies to other forms of payment if the IRS
doesn't receive the funds.
Pay online. Paying online is convenient and
secure and helps make sure we get your pay-
ments on time.
You can pay online with a direct transfer
from your bank account using IRS Direct Pay or
the Electronic Federal Tax Payment System
(EFTPS), or by debit or credit card.
To pay your taxes online or for more infor-
mation, go to IRS.gov/Payments.
Pay by phone. Paying by phone is another
safe and secure method of paying online. Use
one of the following methods.
• EFTPS.
• Debit or credit card.
To use EFTPS, you must be enrolled either
online or have an enrollment form mailed to
you. To make a payment using EFTPS, call
800-555-4477 (English) or 800-244-4829 (Es-
pañol). People who are deaf, hard of hearing, or
have a speech disability and have access to
TTY/TDD equipment can call 800-733-4829.
For more information about EFTPS, go to
IRS.gov/Payments or EFTPS.gov.
To pay using a debit or credit card, you can
call one of the following service providers.
There is a convenience fee charged by these
providers that varies by provider, card type, and
payment amount.
ACI Payments, Inc.
888-UPAY-TAXTM (888-872-9829)
fed.acipayonline.com
Link2Gov Corporation
888-PAY-1040TM (888-729-1040)
www.PAY1040.com
WorldPay US, Inc.
844-PAY-TAX-8TM (844-729-8298)
www.payUSAtax.com
For the latest details on how to pay by
phone, go to IRS.gov/Payments.
Pay by cash. Cash is an in-person payment
option for individuals provided through retailCAUTION
!TIP
partners with a maximum of $1,000 per day per
transaction. To make a cash payment, you must
first be registered online at
fed.acipayonline.com. Don’t send cash pay-
ments through the mail.
Pay by check or money order. Make your
check or money order payable to “United States
Treasury” for the full amount due. Don't send
cash. Don't attach the payment to your return.
Show your correct name, address, SSN, day-
time phone number, and the tax year and form
number on the front of your check or money or-
der. If you are filing a joint return, enter the SSN
shown first on your tax return.
Notice to taxpayers presenting checks.
When you provide a check as payment, you au-
thorize us either to use information from your
check to make a one-time electronic fund trans-
fer from your account or to process the payment
as a check transaction. When we use informa-
tion from your check to make an electronic fund
transfer, funds may be withdrawn from your ac-
count as soon as the same day we receive your
payment, and you will not receive your check
back from your financial institution.
No checks of $100 million or more accep-
ted. The IRS can’t accept a single check (in-
cluding a cashier’s check) for amounts of
$100,000,000 ($100 million) or more. If you are
sending $100 million or more by check, you’ll
need to spread the payment over 2 or more
checks with each check made out for an
amount less than $100 million. This limit doesn’t
apply to other methods of payment (such as
electronic payments). Please consider a
method of payment other than check if the
amount of the payment is over $100 million.
Estimated tax payments. Don't include any
2022 estimated tax payment in the payment for
your 2021 income tax return. See chapter 4 for
information on how to pay estimated tax.
Interest
Interest is charged on tax you don't pay by the
due date of your return. Interest is charged even
if you get an extension of time for filing.
If the IRS figures your tax for you, to
avoid interest for late payment, you
must pay the bill by the date specified
on the bill or by the due date of your return,
whichever is later. For information, see Tax Fig-
ured by IRS in chapter 13.
Interest on penalties. Interest is charged on
the failure-to-file penalty, the accuracy-related
penalty, and the fraud penalty from the due date
of the return (including extensions) to the date
of payment. Interest on other penalties starts on
the date of notice and demand, but isn't
charged on penalties paid within 21 calendar
days from the date of the notice (or within 10
business days if the notice is for $100,000 or
more).
Interest due to IRS error or delay. All or part
of any interest you were charged can be for-
given if the interest is due to an unreasonable
error or delay by an officer or employee of the
IRS in performing a ministerial or managerial
act.TIP
Page 16 Chapter 1 Filing Information
A ministerial act is a procedural or mechani-
cal act that occurs during the processing of your
case. A managerial act includes personnel
transfers and extended personnel training. A
decision concerning the proper application of
federal tax law isn't a ministerial or managerial
act.
The interest can be forgiven only if you
aren’t responsible in any important way for the
error or delay and the IRS has notified you in
writing of the deficiency or payment. For more
information, see Pub. 556.
Interest and certain penalties may also be
suspended for a limited period if you filed your
return by the due date (including extensions)
and the IRS doesn't provide you with a notice
specifically stating your liability and the basis for
it before the close of the 36-month period be-
ginning on the later of:
• The date the return is filed, or
• The due date of the return without regard
to extensions.
For more information, see Pub. 556.
Installment Agreement
If you can’t pay the full amount due with your re-
turn, you can ask to make monthly installment
payments for the full or a partial amount. How-
ever, you will be charged interest and may be
charged a late payment penalty on the tax not
paid by the date your return is due, even if your
request to pay in installments is granted. If your
request is granted, you must also pay a fee. To
limit the interest and penalty charges, pay as
much of the tax as possible with your return. But
before requesting an installment agreement,
you should consider other less costly alterna-
tives, such as a bank loan or credit card pay-
ment.
To apply for an installment agreement on-
line, go to IRS.gov/OPA. You can also use
Form 9465.
In addition to paying by check or money or-
der, you can use a credit or debit card or direct
payment from your bank account to make in-
stallment agreement payments. See How To
Pay, earlier.
Gift To Reduce Debt
Held by the Public
You can make a contribution (gift) to
reduce debt held by the public. If you
wish to do so, make a separate check
payable to “Bureau of the Fiscal Service.”
Send your check to:
Bureau of the Fiscal Service
ATTN: Department G
P.O. Box 2188
Parkersburg, WV 26106-2188
Or enclose your separate check in the envelope
with your income tax return. Don't add this gift
to any tax you owe.
For information on making this type of gift on-
line, go to TreasuryDirect.gov and see the infor-
mation under “How do you make a contribution
to reduce the debt?”
You may be able to deduct this gift as a
charitable contribution on next year's tax return
if you itemize your deductions on Schedule A
(Form 1040).
Name and Address
After you have completed your return, fill in your
name and address in the appropriate area of
Form 1040 or 1040-SR.
You must include your SSN in the cor-
rect place on your tax return.
P.O. box. If your post office doesn't deliver
mail to your street address and you have a P.O.
box, enter your P.O. box number on the line for
your present home address instead of your
street address.
Foreign address. If your address is outside
the United States or its possessions or territo-
ries, enter the city name on the appropriate line
of your Form 1040 or 1040-SR. Don't enter any
other information on that line, but also complete
the spaces below that line.
1. Foreign country name.
2. Foreign province/state/county.
3. Foreign postal code.
Don’t abbreviate the country name. Follow the
country's practice for entering the postal code
and the name of the province, county, or state.
Where Do I File?
After you complete your return, you must send it
to the IRS. You can mail it or you may be able to
file it electronically. See Why Should I File Elec-
tronically, earlier.
Mailing your paper return. Mail your paper
return to the address shown in the Instructions
for Form 1040.
What Happens After
I File?
After you send your return to the IRS, you may
have some questions. This section discusses
concerns you may have about recordkeeping,
your refund, and what to do if you move.
What Records Should
I Keep?
This part discusses why you should keep re-
cords, what kinds of records you should keep,
and how long you should keep them.
You must keep records so that you can
prepare a complete and accurate in-
come tax return. The law doesn't re-
quire any special form of records. However, you
should keep all receipts, canceled checks or
other proof of payment, and any other records
to support any deductions or credits you claim.
If you file a claim for refund, you must be
able to prove by your records that you have
overpaid your tax.CAUTION
!RECORDS
This part doesn't discuss the records you
should keep when operating a business. For in-
formation on business records, see Pub. 583,
Starting a Business and Keeping Records.
Why Keep Records?
Good records help you:
• Identify sources of income. Your re-
cords can identify the sources of your in-
come to help you separate business from
nonbusiness income and taxable from
nontaxable income.
• Keep track of expenses. You can use
your records to identify expenses for which
you can claim a deduction. This helps you
determine if you can itemize deductions on
your tax return.
• Keep track of the basis of property.
You need to keep records that show the
basis of your property. This includes the
original cost or other basis of the property
and any improvements you made.
• Prepare tax returns. You need records to
prepare your tax return.
• Support items reported on tax returns.
The IRS may question an item on your re-
turn. Your records will help you explain any
item and arrive at the correct tax. If you
can’t produce the correct documents, you
may have to pay additional tax and be sub-
ject to penalties.
Kinds of Records To Keep
The IRS doesn't require you to keep your re-
cords in a particular way. Keep them in a man-
ner that allows you and the IRS to determine
your correct tax.
You can use your checkbook to keep a re-
cord of your income and expenses. You also
need to keep documents, such as receipts and
sales slips, that can help prove a deduction.
In this section, you will find guidance about
basic records that everyone should keep. The
section also provides guidance about specific
records you should keep for certain items.
Electronic records. All requirements that ap-
ply to hard copy books and records also apply
to electronic storage systems that maintain tax
books and records. When you replace hard
copy books and records, you must maintain the
electronic storage systems for as long as they
are material to the administration of tax law.
For details on electronic storage system re-
quirements, see Revenue Procedure 97-22,
which is on page 9 of Internal Revenue Bulletin
1997-13 at IRS.gov/pub/irs-irbs/irb97-13.pdf.
Copies of tax returns. You should keep cop-
ies of your tax returns as part of your tax re-
cords. They can help you prepare future tax re-
turns, and you will need them if you file an
amended return or are audited. Copies of your
returns and other records can be helpful to your
survivor or the executor or administrator of your
estate.
If necessary, you can request a copy of a re-
turn and all attachments (including Form W-2)
from the IRS by using Form 4506. There is a
charge for a copy of a return. For information on
Chapter 1 Filing Information Page 17
the cost and where to file, see the instructions
for Form 4506.
If you just need information from your return,
you can order a transcript in one of the following
ways.
• Go to IRS.gov/Transcript.
• Call 800-908-9946.
• Use Form 4506-T or Form 4506T-EZ.
There is no fee for a transcript. For more infor-
mation, see Form 4506-T.
Basic Records
Basic records are documents that everybody
should keep. These are the records that prove
your income and expenses. If you own a home
or investments, your basic records should con-
tain documents related to those items.
Income. Your basic records prove the
amounts you report as income on your tax re-
turn. Your income may include wages, divi-
dends, interest, and partnership or S corpora-
tion distributions. Your records can also prove
that certain amounts aren’t taxable, such as
tax-exempt interest.
Note. If you receive a Form W-2, keep
Copy C until you begin receiving social security
benefits. This will help protect your benefits in
case there is a question about your work record
or earnings in a particular year.
Expenses. Your basic records prove the ex-
penses for which you claim a deduction (or
credit) on your tax return. Your deductions may
include alimony, charitable contributions, mort-
gage interest, and real estate taxes. You may
also have childcare expenses for which you can
claim a credit.
Home. Your basic records should enable you
to determine the basis or adjusted basis of your
home. You need this information to determine if
you have a gain or loss when you sell your
home or to figure depreciation if you use part of
your home for business purposes or for rent.
Your records should show the purchase price,
settlement or closing costs, and the cost of any
improvements. They may also show any casu-
alty losses deducted and insurance reimburse-
ments for casualty losses.
For detailed information on basis, including
which settlement or closing costs are included
in the basis of your home, see Pub. 551, Basis
of Assets.
When you sell your home, your records
should show the sales price and any selling ex-
penses, such as commissions. For information
on selling your home, see Pub. 523, Selling
Your Home.
Investments. Your basic records should ena-
ble you to determine your basis in an invest-
ment and whether you have a gain or loss when
you sell it. Investments include stocks, bonds,
and mutual funds. Your records should show
the purchase price, sales price, and commis-
sions. They may also show any reinvested divi-
dends, stock splits and dividends, load
charges, and original issue discount (OID).
For information on stocks, bonds, and mu-
tual funds, see Pub. 550, Investment Income
and Expenses, and Pub. 551.
Proof of Payment
One of your basic records is proof of payment.
You should keep these records to support cer-
tain amounts shown on your tax return. Proof of
payment alone isn't proof that the item claimed
on your return is allowable. You should also
keep other documents that will help prove that
the item is allowable.
Generally, you prove payment with a cash
receipt, financial account statement, credit card
statement, canceled check, or substitute check.
If you make payments in cash, you should get a
dated and signed receipt showing the amount
and the reason for the payment.
If you make payments using your bank ac-
count, you may be able to prove payment with
an account statement.
Account statements. You may be able to
prove payment with a legible financial account
statement prepared by your bank or other finan-
cial institution.
Pay statements. You may have deductible ex-
penses withheld from your paycheck, such as
medical insurance premiums. You should keep
your year-end or final pay statements as proof
of payment of these expenses.
How Long To Keep
Records
You must keep your records as long as they
may be needed for the administration of any
provision of the Internal Revenue Code. Gener-
ally, this means you must keep records that
support items shown on your return until the pe-
riod of limitations for that return runs out.
The period of limitations is the period of time
in which you can amend your return to claim a
credit or refund or the IRS can assess addi-
tional tax. Table 1-7 contains the periods of limi-
tations that apply to income tax returns. Unless
otherwise stated, the years refer to the period
beginning after the return was filed. Returns
filed before the due date are treated as being
filed on the due date.
Period of LimitationsTable 1-7.
IF you... THEN the
period is...
1 File a return and (2),
(3), and (4) don't apply
to you,
3 years.
2 Don't report income
that you should and it is
more than 25% of the
gross income shown on
your return,
6 years.
3 File a fraudulent return, No limit.
4 Don't file a return, No limit.
5 File a claim for credit or
refund after you filed
your return,
The later of 3
years or 2
years after tax
was paid.
6 File a claim for a loss
from worthless
securities or bad debt
deduction,
7 years.
Property. Keep records relating to property
until the period of limitations expires for the year
in which you dispose of the property in a taxa-
ble disposition. You must keep these records to
figure your basis for computing gain or loss
when you sell or otherwise dispose of the prop-
erty.
Generally, if you received property in a non-
taxable exchange, your basis in that property is
the same as the basis of the property you gave
up. You must keep the records on the old prop-
erty, as well as the new property, until the pe-
riod of limitations expires for the year in which
you dispose of the new property in a taxable
disposition.
Refund Information
You can go online to check the status of your
2021 refund 24 hours after the IRS receives
your e-filed return, or 4 weeks after you mail a
paper return. If you filed Form 8379 with your
return, allow 14 weeks (11 weeks if you filed
electronically) before checking your refund sta-
tus. Be sure to have a copy of your 2021 tax re-
turn handy because you will need to know the
filing status, the first SSN shown on the return,
and the exact whole-dollar amount of the re-
fund. To check on your refund, do one of the
following.
• Go to IRS.gov/Refunds.
• Download the free IRS2Go app to your
smart phone and use it to check your re-
fund status.
• Call the automated refund hotline at
800-829-1954.
Interest on Refunds
If you are due a refund, you may get interest on
it. The interest rates are adjusted quarterly.
If the refund is made within 45 days after the
due date of your return, no interest will be paid.
If you file your return after the due date (includ-
ing extensions), no interest will be paid if the re-
fund is made within 45 days after the date you
filed. If the refund isn't made within this 45-day
period, interest will be paid from the due date of
the return or from the date you filed, whichever
is later.
Accepting a refund check doesn't change
your right to claim an additional refund and in-
terest. File your claim within the period of time
that applies. See Amended Returns and Claims
for Refund, later. If you don't accept a refund
check, no more interest will be paid on the over-
payment included in the check.
Interest on erroneous refund. All or part of
any interest you were charged on an erroneous
refund will generally be forgiven. Any interest
Page 18 Chapter 1 Filing Information
charged for the period before demand for re-
payment was made will be forgiven unless:
1. You, or a person related to you, caused
the erroneous refund in any way; or
2. The refund is more than $50,000.
For example, if you claimed a refund of $100
on your return, but the IRS made an error and
sent you $1,000, you wouldn't be charged inter-
est for the time you held the $900 difference.
You must, however, repay the $900 when the
IRS asks.
Change of Address
If you have moved, file your return using your
new address.
If you move after you filed your return, you
should give the IRS clear and concise notifica-
tion of your change of address. The notification
may be written, electronic, or oral. Send written
notification to the Internal Revenue Service
Center serving your old address. You can use
Form 8822, Change of Address. If you are ex-
pecting a refund, also notify the post office serv-
ing your old address. This will help in forwarding
your check to your new address (unless you
chose direct deposit of your refund). For more
information, see Revenue Procedure 2010-16,
2010-19 I.R.B. 664, available at IRS.gov/irb/
2010-19_IRB/ar07.html.
Be sure to include your SSN (and the name
and SSN of your spouse if you filed a joint re-
turn) in any correspondence with the IRS.
What if I Made
a Mistake?
Errors may delay your refund or result in notices
being sent to you. If you discover an error, you
can file an amended return or claim for refund.
Amended Returns and
Claims for Refund
You should correct your return if, after you have
filed it, you find that:
1. You didn't report some income,
2. You claimed deductions or credits you
shouldn't have claimed,
3. You didn't claim deductions or credits you
could have claimed, or
4. You should have claimed a different filing
status. (Once you file a joint return, you
can’t choose to file separate returns for
that year after the due date of the return.
However, an executor may be able to
make this change for a deceased spouse.)
If you need a copy of your return, see Copies of
tax returns under Kinds of Records To Keep,
earlier, in this chapter.
Form 1040-X. Use Form 1040-X to correct a
return you have already filed.
Completing Form 1040-X. On Form
1040-X, enter your income, deductions, and
credits as you originally reported them on your
return; the changes you are making; and the
corrected amounts. Then, figure the tax on the
corrected amount of taxable income and the
amount you owe or your refund.
If you owe tax, the IRS offers several pay-
ment options. See How To Pay, earlier. The tax
owed won't be subtracted from any amount you
had credited to your estimated tax.
If you can’t pay the full amount due with your
return, you can ask to make monthly installment
payments. See Installment Agreement, earlier.
If you overpaid tax, you can have all or part
of the overpayment refunded to you, or you can
apply all or part of it to your estimated tax. If you
choose to get a refund, it will be sent separately
from any refund shown on your original return.
Filing Form 1040-X. When completing
Form 1040-X, don't forget to show the year of
your original return and explain all changes you
made. Be sure to attach any forms or schedules
needed to explain your changes. Mail your
Form 1040-X to the Internal Revenue Service
Center serving the area where you now live (as
shown in the Instructions for Form 1040-X).
However, if you are filing Form 1040-X in re-
sponse to a notice you received from the IRS,
mail it to the address shown on the notice.
File a separate form for each tax year in-
volved.
Time for filing a claim for refund. Generally,
you must file your claim for a credit or refund
within 3 years after the date you filed your origi-
nal return or within 2 years after the date you
paid the tax, whichever is later. Returns filed
before the due date (without regard to exten-
sions) are considered filed on the due date
(even if the due date was a Saturday, Sunday,
or legal holiday). These time periods are sus-
pended while you are financially disabled, dis-
cussed later.
If the last day for claiming a credit or refund
is a Saturday, Sunday, or legal holiday, you can
file the claim on the next business day.
If you don't file a claim within this period, you
may not be entitled to a credit or a refund.
Federally declared disaster. If you were
affected by a federally declared disaster, you
may have additional time to file your amended
return. See Pub. 556 for details.
Protective claim for refund. Generally, a pro-
tective claim is a formal claim or amended re-
turn for credit or refund normally based on cur-
rent litigation or expected changes in tax law or
other legislation. You file a protective claim
when your right to a refund is contingent on fu-
ture events and may not be determinable until
after the statute of limitations expires. A valid
protective claim doesn't have to list a particular
dollar amount or demand an immediate refund.
However, a valid protective claim must:
• Be in writing and signed;
• Include your name, address, SSN or ITIN,
and other contact information;
• Identify and describe the contingencies af-
fecting the claim;
• Clearly alert the IRS to the essential nature
of the claim; and
• Identify the specific year(s) for which a re-
fund is sought.
Mail your protective claim for refund to the ad-
dress listed in the Instructions for Form 1040-X
under Where To File.
Generally, the IRS will delay action on the
protective claim until the contingency is re-
solved.
Limit on amount of refund. If you file your
claim within 3 years after the date you filed your
return, the credit or refund can’t be more than
the part of the tax paid within the 3-year period
(plus any extension of time for filing your return)
immediately before you filed the claim. This
time period is suspended while you are finan-
cially disabled, discussed later.
Tax paid. Payments, including estimated
tax payments, made before the due date (with-
out regard to extensions) of the original return
are considered paid on the due date. For exam-
ple, income tax withheld during the year is con-
sidered paid on the due date of the return,
which is April 15 for most taxpayers.
Example 1. You made estimated tax pay-
ments of $500 and got an automatic extension
of time to October 15, 2018, to file your 2017 in-
come tax return. When you filed your return on
that date, you paid an additional $200 tax. On
October 15, 2021, you filed an amended return
and claimed a refund of $700. Because you
filed your claim within 3 years after you filed
your original return, you can get a refund of up
to $700, the tax paid within the 3 years plus the
6-month extension period immediately before
you filed the claim.
Example 2. The situation is the same as in
Example 1, except you filed your return on Oc-
tober 30, 2018, 2 weeks after the extension pe-
riod ended. You paid an additional $200 on that
date. On October 31, 2021, you filed an amen-
ded return and claimed a refund of $700. Al-
though you filed your claim within 3 years from
the date you filed your original return, the refund
was limited to $200, the tax paid within the 3
years plus the 6-month extension period imme-
diately before you filed the claim. The estimated
tax of $500 paid before that period can’t be re-
funded or credited.
If you file a claim more than 3 years after you
file your return, the credit or refund can’t be
more than the tax you paid within the 2 years
immediately before you file the claim.
Example. You filed your 2017 tax return on
April 15, 2018. You paid taxes of $500. On No-
vember 5, 2019, after an examination of your
2017 return, you had to pay an additional tax of
$200. On May 12, 2021, you file a claim for a re-
fund of $300. However, because you filed your
claim more than 3 years after you filed your re-
turn, your refund will be limited to the $200 you
paid during the 2 years immediately before you
filed your claim.
Financially disabled. The time periods for
claiming a refund are suspended for the period
in which you are financially disabled. For a joint
income tax return, only one spouse has to be fi-
nancially disabled for the time period to be sus-
pended. You are financially disabled if you are
unable to manage your financial affairs because
of a medically determinable physical or mental
Chapter 1 Filing Information Page 19
impairment that can be expected to result in
death or that has lasted or can be expected to
last for a continuous period of not less than 12
months. However, you aren’t treated as finan-
cially disabled during any period your spouse or
any other person is authorized to act on your
behalf in financial matters.
To claim that you are financially disabled,
you must send in the following written state-
ments with your claim for refund.
1. A statement from your qualified physician
that includes:
a. The name and a description of your
physical or mental impairment;
b. The physician's medical opinion that
the impairment prevented you from
managing your financial affairs;
c. The physician's medical opinion that
the impairment was or can be expec-
ted to result in death, or that its dura-
tion has lasted, or can be expected to
last, at least 12 months;
d. The specific time period (to the best of
the physician's knowledge); and
e. The following certification signed by
the physician: “I hereby certify that, to
the best of my knowledge and belief,
the above representations are true,
correct, and complete.”
2. A statement made by the person signing
the claim for credit or refund that no per-
son, including your spouse, was author-
ized to act on your behalf in financial mat-
ters during the period of disability (or the
exact dates that a person was authorized
to act for you).
Exceptions for special types of refunds. If
you file a claim for one of the items in the follow-
ing list, the dates and limits discussed earlier
may not apply. These items, and where to get
more information, are as follows.
• Bad debt. See Pub. 550.
• Worthless security. See Pub. 550.
• Foreign tax paid or accrued. See Pub. 514.
• Net operating loss carryback. See Pub.
536.
• Carryback of certain business tax credits.
See Form 3800.
• Claim based on an agreement with the IRS
extending the period for assessment of
tax.
Processing claims for refund. Claims are
usually processed 8–12 weeks after they are
filed. Your claim may be accepted as filed, dis-
allowed, or subject to examination. If a claim is
examined, the procedures are the same as in
the examination of a tax return.
If your claim is disallowed, you will receive
an explanation of why it was disallowed.
Taking your claim to court. You can sue for a
refund in court, but you must first file a timely
claim with the IRS. If the IRS disallows your
claim or doesn't act on your claim within 6
months after you file it, you can then take your
claim to court. For information on the burden of
proof in a court proceeding, see Pub. 556.
The IRS provides a direct method to move
your claim to court if:
• You are filing a claim for a credit or refund
based solely on contested income tax or
on estate tax or gift tax issues considered
in your previously examined returns, and
• You want to take your case to court instead
of appealing it within the IRS.
When you file your claim with the IRS, you
get the direct method by requesting in writing
that your claim be immediately rejected. A no-
tice of claim disallowance will be sent to you.
You have 2 years from the date of mailing of
the notice of claim disallowance to file a refund
suit in the U.S. District Court having jurisdiction
or in the U.S. Court of Federal Claims.
Interest on refund. If you receive a refund be-
cause of your amended return, interest will be
paid on it from the due date of your original re-
turn or the date you filed your original return,
whichever is later, to the date you filed the
amended return. However, if the refund isn't
made within 45 days after you file the amended
return, interest will be paid up to the date the re-
fund is paid.
Reduced refund. Your refund may be reduced
by an additional tax liability that has been as-
sessed against you.
Also, your refund may be reduced by
amounts you owe for past-due federal tax, state
income tax, state unemployment compensation
debts, child support, spousal support, or certain
other federal nontax debts, such as student
loans. If your spouse owes these debts, see
Offset against debts under Refunds, earlier, for
the correct refund procedures to follow.
Effect on state tax liability. If your return is
changed for any reason, it may affect your state
income tax liability. This includes changes
made as a result of an examination of your re-
turn by the IRS. Contact your state tax agency
for more information.
Penalties
The law provides penalties for failure to file re-
turns or pay taxes as required.
Civil Penalties
If you don't file your return and pay your tax by
the due date, you may have to pay a penalty.
You may also have to pay a penalty if you sub-
stantially understate your tax, understate a re-
portable transaction, file an erroneous claim for
refund or credit, file a frivolous tax submission,
or fail to supply your SSN or ITIN. If you provide
fraudulent information on your return, you may
have to pay a civil fraud penalty.
Filing late. If you don't file your return by the
due date (including extensions), you may have
to pay a failure-to-file penalty. The penalty is
usually 5% for each month or part of a month
that a return is late, but not more than 25%. The
penalty is based on the tax not paid by the due
date (without regard to extensions).
Fraud. If your failure to file is due to fraud,
the penalty is 15% for each month or part of a
month that your return is late, up to a maximum
of 75%.
Return over 60 days late. If you file your
return more than 60 days after the due date, or
extended due date, the minimum penalty is the
smaller of $435 or 100% of the unpaid tax.
Exception. You won't have to pay the pen-
alty if you show that you failed to file on time be-
cause of reasonable cause and not because of
willful neglect.
Paying tax late. You will have to pay a fail-
ure-to-pay penalty of 1/2 of 1% (0.50%) of your
unpaid taxes for each month, or part of a month,
after the due date that the tax isn't paid. This
penalty doesn't apply during the automatic
6-month extension of time to file period if you
paid at least 90% of your actual tax liability on
or before the due date of your return and pay
the balance when you file the return.
The monthly rate of the failure-to-pay pen-
alty is half the usual rate (0.25% instead of
0.50%) if an installment agreement is in effect
for that month. You must have filed your return
by the due date (including extensions) to qualify
for this reduced penalty.
If a notice of intent to levy is issued, the rate
will increase to 1% at the start of the first month
beginning at least 10 days after the day that the
notice is issued. If a notice and demand for im-
mediate payment is issued, the rate will in-
crease to 1% at the start of the first month be-
ginning after the day that the notice and
demand is issued.
This penalty can’t be more than 25% of your
unpaid tax. You won't have to pay the penalty if
you can show that you had a good reason for
not paying your tax on time.
Combined penalties. If both the failure-to-file
penalty and the failure-to-pay penalty (dis-
cussed earlier) apply in any month, the 5% (or
15%) failure-to-file penalty is reduced by the
failure-to-pay penalty. However, if you file your
return more than 60 days after the due date or
extended due date, the minimum penalty is the
smaller of $435 or 100% of the unpaid tax.
Accuracy-related penalty. You may have to
pay an accuracy-related penalty if you under-
pay your tax because:
1. You show negligence or disregard of the
rules or regulations,
2. You substantially understate your income
tax,
3. You claim tax benefits for a transaction
that lacks economic substance, or
4. You fail to disclose a foreign financial as-
set.
The penalty is equal to 20% of the underpay-
ment. The penalty is 40% of any portion of the
underpayment that is attributable to an undis-
closed noneconomic substance transaction or
an undisclosed foreign financial asset transac-
tion. The penalty won't be figured on any part of
an underpayment on which the fraud penalty
(discussed later) is charged.
Negligence or disregard. The term “negli-
gence” includes a failure to make a reasonable
attempt to comply with the tax law or to exercise
ordinary and reasonable care in preparing a
Page 20 Chapter 1 Filing Information
return. Negligence also includes failure to keep
adequate books and records. You won't have to
pay a negligence penalty if you have a reasona-
ble basis for a position you took.
The term “disregard” includes any careless,
reckless, or intentional disregard.
Adequate disclosure. You can avoid the
penalty for disregard of rules or regulations if
you adequately disclose on your return a posi-
tion that has at least a reasonable basis. See
Disclosure statement, later.
This exception won't apply to an item that is
attributable to a tax shelter. In addition, it won't
apply if you fail to keep adequate books and re-
cords, or substantiate items properly.
Substantial understatement of income
tax. You understate your tax if the tax shown
on your return is less than the correct tax. The
understatement is substantial if it is more than
the larger of 10% of the correct tax or $5,000.
However, the amount of the understatement
may be reduced to the extent the understate-
ment is due to:
1. Substantial authority, or
2. Adequate disclosure and a reasonable ba-
sis.
If an item on your return is attributable to a tax
shelter, there is no reduction for an adequate
disclosure. However, there is a reduction for a
position with substantial authority, but only if
you reasonably believed that your tax treatment
was more likely than not the proper treatment.
Substantial authority. Whether there is or
was substantial authority for the tax treatment of
an item depends on the facts and circumstan-
ces. Some of the items that may be considered
are court opinions, Treasury regulations, reve-
nue rulings, revenue procedures, and notices
and announcements issued by the IRS and
published in the Internal Revenue Bulletin that
involve the same or similar circumstances as
yours.
Disclosure statement. To adequately dis-
close the relevant facts about your tax treat-
ment of an item, use Form 8275. You must also
have a reasonable basis for treating the item
the way you did.
In cases of substantial understatement only,
items that meet the requirements of Revenue
Procedure 2020-54 (or later update) are consid-
ered adequately disclosed on your return with-
out filing Form 8275.
Use Form 8275-R to disclose items or posi-
tions contrary to regulations.
Transaction lacking economic sub-
stance. For more information on economic
substance, see section 7701(o).
Foreign financial asset. For more informa-
tion on undisclosed foreign financial assets, see
section 6662(j).
Reasonable cause. You won't have to pay
a penalty if you show a good reason (reasona-
ble cause) for the way you treated an item. You
must also show that you acted in good faith.
This doesn't apply to a transaction that lacks
economic substance.
Filing erroneous claim for refund or credit.
You may have to pay a penalty if you file an er-
roneous claim for refund or credit. The penalty
is equal to 20% of the disallowed amount of the
claim, unless you can show a reasonable basis
for the way you treated an item. However, any
disallowed amount due to a transaction that
lacks economic substance won't be treated as
having a reasonable basis. The penalty won't
be figured on any part of the disallowed amount
of the claim that relates to the earned income
credit or on which the accuracy-related or fraud
penalties are charged.
Frivolous tax submission. You may have to
pay a penalty of $5,000 if you file a frivolous tax
return or other frivolous submissions. A frivo-
lous tax return is one that doesn't include
enough information to figure the correct tax or
that contains information clearly showing that
the tax you reported is substantially incorrect.
For more information on frivolous returns, frivo-
lous submissions, and a list of positions that are
identified as frivolous, see Notice 2010-33,
2010-17 I.R.B. 609, available at IRS.gov/irb/
2010-17_IRB/ar13.html.
You will have to pay the penalty if you filed
this kind of return or submission based on a friv-
olous position or a desire to delay or interfere
with the administration of federal tax laws. This
includes altering or striking out the preprinted
language above the space provided for your
signature.
This penalty is added to any other penalty
provided by law.
Fraud. If there is any underpayment of tax on
your return due to fraud, a penalty of 75% of the
underpayment due to fraud will be added to
your tax.
Joint return. The fraud penalty on a joint re-
turn doesn't apply to a spouse unless some part
of the underpayment is due to the fraud of that
spouse.
Failure to supply SSN. If you don't include
your SSN or the SSN of another person where
required on a return, statement, or other docu-
ment, you will be subject to a penalty of $50 for
each failure. You will also be subject to a pen-
alty of $50 if you don't give your SSN to another
person when it is required on a return, state-
ment, or other document.
For example, if you have a bank account
that earns interest, you must give your SSN to
the bank. The number must be shown on the
Form 1099-INT or other statement the bank
sends you. If you don't give the bank your SSN,
you will be subject to the $50 penalty. (You may
also be subject to “backup” withholding of in-
come tax. See chapter 4.)
You won't have to pay the penalty if you are
able to show that the failure was due to reason-
able cause and not willful neglect.
Criminal Penalties
You may be subject to criminal prosecution
(brought to trial) for actions such as:
1. Tax evasion;
2. Willful failure to file a return, supply infor-
mation, or pay any tax due;
3. Fraud and false statements;
4. Preparing and filing a fraudulent return; or
5. Identity theft.
Identity Theft
Identity theft occurs when someone uses your
personal information such as your name, SSN,
or other identifying information, without your
permission, to commit fraud or other crimes. An
identity thief may use your SSN to get a job or
may file a tax return using your SSN to receive
a refund.
To reduce your risk:
• Protect your SSN,
• Ensure your employer is protecting your
SSN, and
• Be careful when choosing a tax preparer.
If your tax records are affected by identity
theft and you receive a notice from the IRS, re-
spond right away to the name and phone num-
ber printed on the IRS notice or letter.
If your SSN has been lost or stolen or you
suspect you are a victim of tax-related identity
theft, visit IRS.gov/IdentityTheft to learn what
steps you should take.
For more information, see Pub. 5027.
All taxpayers are now eligible for an
Identity Protection Personal Identifica-
tion Number (IP PIN). For more infor-
mation, see Pub. 5477. To apply for an IP PIN,
go to IRS.gov/IPPIN and use the Get an IP PIN
tool.
Victims of identity theft who are experienc-
ing economic harm or a systemic problem, or
are seeking help in resolving tax problems that
have not been resolved through normal chan-
nels, may be eligible for Taxpayer Advocate
Service (TAS) assistance. You can reach TAS
by calling the National Taxpayer Advocate help-
line at 877-777-4778 or 800-829-4059 (TTY/
TDD). Deaf or hard-of-hearing individuals can
also contact the IRS through relay services
such as the Federal Relay Service, available at
GSA.gov/fedrelay.
Protect yourself from suspicious emails
or phishing schemes. Phishing is the crea-
tion and use of email and websites designed to
mimic legitimate business emails and websites.
The most common form is the act of sending an
email to a user falsely claiming to be an estab-
lished legitimate enterprise in an attempt to
scam the user into surrendering private informa-
tion that will be used for identity theft.
The IRS doesn't initiate contacts with tax-
payers via emails. Also, the IRS doesn't request
detailed personal information through email or
ask taxpayers for the PIN numbers, passwords,
or similar secret access information for their
credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming
to be from the IRS, forward the message to
phishing@irs.gov. You may also report misuse
of the IRS name, logo, forms, or other IRS prop-
erty to the Treasury Inspector General for Tax
Administration toll free at 800-366-4484. You
can forward suspicious emails to the Federal
Trade Commission (FTC) at spam@uce.gov or
report them at ftc.gov/complaint. You can con-
tact them at ftc.gov/idtheft or 877-IDTHEFT
(877-438-4338). If you have been a victim of
identity theft, see IdentityTheft.gov or Pub.TIP
Chapter 1 Filing Information Page 21
5027. People who are deaf, hard of hearing, or
have a speech disability and who have access
to TTY/TDD equipment can call 866-653-4261.
Go to IRS.gov/IDProtection to learn more
about identity theft and how to reduce your risk.
2.
Filing Status
Introduction
This chapter helps you determine which filing
status to use. There are five filing statuses.
• Single.
• Married Filing Jointly.
• Married Filing Separately.
• Head of Household.
• Qualifying Widow(er).
If more than one filing status applies to
you, choose the one that will give you
the lowest tax.
You must determine your filing status before
you can determine whether you must file a tax
return (chapter 1), your standard deduction
(chapter 10), and your tax (chapter 11). You
also use your filing status to determine whether
you are eligible to claim certain deductions and
credits.
Useful Items
You may want to see:
Publication
501 Dependents, Standard Deduction,
and Filing Information
503 Child and Dependent Care Expenses
519 U.S. Tax Guide for Aliens
555 Community Property
559 Survivors, Executors, and
Administrators
596 Earned Income Credit (EIC)
925 Passive Activity and At-Risk Rules
For these and other useful items, go to IRS.gov/
Forms.
Marital Status
In general, your filing status depends on
whether you are considered unmarried or mar-
ried.
Unmarried persons. You are considered un-
married for the whole year if, on the last day of
your tax year, you are either:
• Unmarried, or
• Legally separated from your spouse under
a divorce or separate maintenance decree.TIP
State law governs whether you are married
or legally separated under a divorce or separate
maintenance decree.
Divorced persons. If you are divorced un-
der a final decree by the last day of the year,
you are considered unmarried for the whole
year.
Divorce and remarriage. If you obtain a di-
vorce for the sole purpose of filing tax returns as
unmarried individuals, and at the time of divorce
you intend to and do, in fact, remarry each other
in the next tax year, you and your spouse must
file as married individuals in both years.
Annulled marriages. If you obtain a court
decree of annulment, which holds that no valid
marriage ever existed, you are considered un-
married even if you filed joint returns for earlier
years. File Form 1040-X, Amended U.S. Indi-
vidual Income Tax Return, claiming single or
head of household status for all tax years that
are affected by the annulment and not closed
by the statute of limitations for filing a tax return.
Generally, for a credit or refund, you must file
Form 1040-X within 3 years (including exten-
sions) after the date you filed your original re-
turn or within 2 years after the date you paid the
tax, whichever is later. If you filed your original
return early (for example, March 1), your return
is considered filed on the due date (generally
April 15). However, if you had an extension to
file (for example, until October 15) but you filed
earlier and we received it on July 1, your return
is considered filed on July 1.
Head of household or qualifying
widow(er). If you are considered unmarried,
you may be able to file as head of household or
as qualifying widow(er). See Head of House-
hold and Qualifying Widow(er) to see if you
qualify.
Married persons. If you are considered mar-
ried, you and your spouse can file a joint return
or separate returns.
Considered married. You are considered
married for the whole year if, on the last day of
your tax year, you and your spouse meet any
one of the following tests.
1. You are married and living together.
2. You are living together in a common law
marriage recognized in the state where
you now live or in the state where the com-
mon law marriage began.
3. You are married and living apart, but not
legally separated under a decree of di-
vorce or separate maintenance.
4. You are separated under an interlocutory
(not final) decree of divorce.
Spouse died during the year. If your
spouse died during the year, you are consid-
ered married for the whole year for filing status
purposes.
If you didn't remarry before the end of the
tax year, you can file a joint return for yourself
and your deceased spouse. For the next 2
years, you may be entitled to the special bene-
fits described later under Qualifying Widow(er).
If you remarried before the end of the tax
year, you can file a joint return with your new
spouse. Your deceased spouse's filing status is
married filing separately for that year.
Married persons living apart. If you live
apart from your spouse and meet certain tests,
you may be able to file as head of household
even if you aren't divorced or legally separated.
If you qualify to file as head of household in-
stead of married filing separately, your standard
deduction will be higher. Also, your tax may be
lower, and you may be able to claim the earned
income credit. See Head of Household, later.
Single
Your filing status is single if you are considered
unmarried and you don’t qualify for another fil-
ing status. To determine your marital status,
see Marital Status, earlier.
Widow(er). Your filing status may be single if
you were widowed before January 1, 2021, and
didn't remarry before the end of 2021. You may,
however, be able to use another filing status
that will give you a lower tax. See Head of
Household and Qualifying Widow(er), later, to
see if you qualify.
How to file. On Form 1040 or 1040-SR, show
your filing status as single by checking the “Sin-
gle” box on the Filing Status line at the top of
the form. Use the Single column of the Tax Ta-
ble, or Section A of the Tax Computation Work-
sheet, to figure your tax.
Married Filing Jointly
You can choose married filing jointly as your fil-
ing status if you are considered married and
both you and your spouse agree to file a joint
return. On a joint return, you and your spouse
report your combined income and deduct your
combined allowable expenses. You can file a
joint return even if one of you had no income or
deductions.
If you and your spouse decide to file a joint
return, your tax may be lower than your com-
bined tax for the other filing statuses. Also, your
standard deduction (if you don’t itemize deduc-
tions) may be higher, and you may qualify for
tax benefits that don’t apply to other filing sta-
tuses.
How to file. On Form 1040 or 1040-SR, show
your filing status as married filing jointly by
checking the “Married filing jointly” box on the
Filing Status line at the top of the form. Use the
Married filing jointly column of the Tax Table, or
Section B of the Tax Computation Worksheet,
to figure your tax.
If you and your spouse each have in-
come, you may want to figure your tax
both on a joint return and on separate
returns (using the filing status of married filing
separately). You can choose the method that
gives the two of you the lower combined tax un-
less you are required to file separately.
Spouse died. If your spouse died during the
year, you are considered married for the whole
year and can choose married filing jointly as
your filing status. See Spouse died during the
year, under Married persons, earlier, for more
information.TIP
Page 22 Chapter 2 Filing Status
If your spouse died in 2022 before filing a
2021 return, you can choose married filing
jointly as your filing status on your 2021 return.
Divorced persons. If you are divorced under a
final decree by the last day of the year, you are
considered unmarried for the whole year and
you can’t choose married filing jointly as your fil-
ing status.
Filing a Joint Return
Both you and your spouse must include all of
your income and deductions on your joint re-
turn.
Accounting period. Both of you must use the
same accounting period, but you can use differ-
ent accounting methods. See Accounting Peri-
ods and Accounting Methods in chapter 1.
Joint responsibility. Both of you may be held
responsible, jointly and individually, for the tax
and any interest or penalty due on your joint re-
turn. This means that if one spouse doesn't pay
the tax due, the other may have to. Or, if one
spouse doesn't report the correct tax, both
spouses may be responsible for any additional
taxes assessed by the IRS. One spouse may
be held responsible for all the tax due even if all
the income was earned by the other spouse.
You may want to file separately if:
• You believe your spouse isn't reporting all
of his or her income, or
• You don’t want to be responsible for any
taxes due if your spouse doesn't have
enough tax withheld or doesn't pay enough
estimated tax.
Divorced taxpayer. You may be held jointly
and individually responsible for any tax, inter-
est, and penalties due on a joint return filed be-
fore your divorce. This responsibility may apply
even if your divorce decree states that your for-
mer spouse will be responsible for any amounts
due on previously filed joint returns.
Relief from joint responsibility. In some
cases, one spouse may be relieved of joint re-
sponsibility for tax, interest, and penalties on a
joint return for items of the other spouse that
were incorrectly reported on the joint return.
You can ask for relief no matter how small the
liability.
There are three types of relief available.
1. Innocent spouse relief.
2. Separation of liability (available only to
joint filers who are divorced, widowed, le-
gally separated, or haven't lived together
for the 12 months ending on the date the
election for this relief is filed).
3. Equitable relief.
You must file Form 8857, Request for Inno-
cent Spouse Relief, to request relief from joint
responsibility. Pub. 971, Innocent Spouse Re-
lief, explains these kinds of relief and who may
qualify for them.
Signing a joint return. For a return to be con-
sidered a joint return, both spouses must gener-
ally sign the return.
Spouse died before signing. If your
spouse died before signing the return, the
executor or administrator must sign the return
for your spouse. If neither you nor anyone else
has yet been appointed as executor or adminis-
trator, you can sign the return for your spouse
and enter “Filing as surviving spouse” in the
area where you sign the return.
Spouse away from home. If your spouse is
away from home, you should prepare the re-
turn, sign it, and send it to your spouse to sign
so that it can be filed on time.
Injury or disease prevents signing. If your
spouse can’t sign because of disease or injury
and tells you to sign for him or her, you can sign
your spouse's name in the proper space on the
return followed by the words “By (your name),
Husband (or Wife).” Be sure to sign in the
space provided for your signature. Attach a
dated statement, signed by you, to the return.
The statement should include the form number
of the return you are filing, the tax year, and the
reason your spouse can’t sign; it should also
state that your spouse has agreed to your sign-
ing for him or her.
Signing as guardian of spouse. If you are
the guardian of your spouse who is mentally in-
competent, you can sign the return for your
spouse as guardian.
Spouse in combat zone. You can sign a
joint return for your spouse if your spouse can’t
sign because he or she is serving in a combat
zone (such as the Persian Gulf Area, Serbia,
Montenegro, Albania, or Afghanistan), even if
you don’t have a power of attorney or other
statement. Attach a signed statement to your
return explaining that your spouse is serving in
a combat zone. For more information on special
tax rules for persons who are serving in a com-
bat zone, or who are in missing status as a re-
sult of serving in a combat zone, see Pub. 3,
Armed Forces' Tax Guide.
Power of attorney. In order for you to sign a
return for your spouse in any of these cases,
you must attach to the return a power of attor-
ney (POA) that authorizes you to sign for your
spouse. You can use a POA that states that you
have been granted authority to sign the return,
or you can use Form 2848. Part I of Form 2848
must state that you are granted authority to sign
the return.
Nonresident alien or dual-status alien. Gen-
erally, a married couple can’t file a joint return if
either one is a nonresident alien at any time
during the tax year. However, if one spouse
was a nonresident alien or dual-status alien
who was married to a U.S. citizen or resident
alien at the end of the year, the spouses can
choose to file a joint return. If you do file a joint
return, you and your spouse are both treated as
U.S. residents for the entire tax year. See chap-
ter 1 of Pub. 519, U.S. Tax Guide for Aliens.
Married Filing
Separately
You can choose married filing separately as
your filing status if you are married. This filing
status may benefit you if you want to be respon-
sible only for your own tax or if it results in less
tax than filing a joint return.
If you and your spouse don’t agree to file a
joint return, you must use this filing status un-
less you qualify for head of household status,
discussed later.
You may be able to choose head of house-
hold filing status if you are considered unmar-
ried because you live apart from your spouse
and meet certain tests (explained under Head
of Household, later). This can apply to you even
if you aren't divorced or legally separated. If you
qualify to file as head of household, instead of
as married filing separately, your tax may be
lower, you may be able to claim the earned in-
come credit and certain other benefits, and your
standard deduction will be higher. The head of
household filing status allows you to choose the
standard deduction even if your spouse choo-
ses to itemize deductions. See Head of House-
hold, later, for more information.
You will generally pay more combined
tax on separate returns than you would
on a joint return for the reasons listed
under Special Rules, later. However, unless
you are required to file separately, you should
figure your tax both ways (on a joint return and
on separate returns). This way, you can make
sure you are using the filing status that results in
the lowest combined tax. When figuring the
combined tax of a married couple, you may
want to consider state taxes as well as federal
taxes.
How to file. If you file a separate return, you
generally report only your own income, credits,
and deductions.
Select this filing status by checking the
“Married filing separately” box on the Filing Sta-
tus line at the top of Form 1040 or 1040-SR. En-
ter your spouse's full name and SSN or ITIN in
the entry space at the bottom of the Filing Sta-
tus section. If your spouse doesn't have and
isn't required to have an SSN or ITIN, enter
“NRA” in the space for your spouse's SSN. Use
the Married filing separately column of the Tax
Table, or Section C of the Tax Computation
Worksheet, to figure your tax.
Special Rules
If you choose married filing separately as your
filing status, the following special rules apply.
Because of these special rules, you usually pay
more tax on a separate return than if you use
another filing status you qualify for.
1. Your tax rate is generally higher than on a
joint return.
2. Your exemption amount for figuring the al-
ternative minimum tax is half that allowed
on a joint return.
3. You can’t take the credit for child and de-
pendent care expenses in most cases,
and the amount you can exclude from in-
come under an employer's dependent
care assistance program is limited to
$5,250 (instead of $10,500 on a joint re-
turn). However, if you are legally separa-
ted or living apart from your spouse, you
may be able to file a separate return and
still take the credit. For more information
about these expenses, the credit, and the
exclusion, see What’s Your Filing Status?TIP
Chapter 2 Filing Status Page 23
in Pub. 503, Child and Dependent Care
Expenses.
4. You can’t take the earned income credit,
unless you were separated from your
spouse at the end of 2021 and meet cer-
tain requirements. For more information
about these requirements, see Rule 3—If
Your Filing Status is Married Filing Sepa-
rately, You Must Meet Certain Rules in
Pub. 596, Earned Income Credit (EIC).
5. You can’t take the exclusion or credit for
adoption expenses in most cases.
6. You can’t take the education credits (the
American opportunity credit and lifetime
learning credit), or the deduction for stu-
dent loan interest.
7. You can’t exclude any interest income
from qualified U.S. savings bonds you
used for higher education expenses.
8. If you lived with your spouse at any time
during the tax year:
a. You can’t claim the credit for the eld-
erly or the disabled, and
b. You must include in income a greater
percentage (up to 85%) of any social
security or equivalent railroad retire-
ment benefits you received.
9. The following credits and deductions are
reduced at income levels half of those for
a joint return:
a. The child tax credit and the credit for
other dependents, and
b. The retirement savings contributions
credit.
10. Your capital loss deduction limit is $1,500
(instead of $3,000 on a joint return).
11. If your spouse itemizes deductions, you
can’t claim the standard deduction. If you
can claim the standard deduction, your
basic standard deduction is half of the
amount allowed on a joint return.
Adjusted gross income (AGI) limits. If your
AGI on a separate return is lower than it would
have been on a joint return, you may be able to
deduct a larger amount for certain deductions
that are limited by AGI, such as medical expen-
ses.
Individual retirement arrangements (IRAs).
You may not be able to deduct all or part of your
contributions to a traditional IRA if you or your
spouse were covered by an employee retire-
ment plan at work during the year. Your deduc-
tion is reduced or eliminated if your income is
more than a certain amount. This amount is
much lower for married individuals who file sep-
arately and lived together at any time during the
year. For more information, see How Much Can
You Deduct in chapter 9.
Rental activity losses. If you actively partici-
pated in a passive rental real estate activity that
produced a loss, you can generally deduct the
loss from your nonpassive income, up to
$25,000. This is called a “special allowance.”
However, married persons filing separate re-
turns who lived together at any time during the
year can’t claim this special allowance. Married
persons filing separate returns who lived apart
at all times during the year are each allowed a
$12,500 maximum special allowance for losses
from passive real estate activities. See Rental
Activities in Pub. 925, Passive Activity and
At-Risk Rules, for more information.
Community property states. If you live in a
community property state and file separately,
your income may be considered separate in-
come or community income for income tax pur-
poses. Community property states include Ari-
zona, California, Idaho, Louisiana, Nevada,
New Mexico, Texas, Washington, and Wiscon-
sin. See Pub. 555, Community Property, for
more information.
Joint Return After
Separate Returns
You can change your filing status from a sepa-
rate return to a joint return by filing an amended
return using Form 1040-X.
You can generally change to a joint return
any time within 3 years from the due date of the
separate return or returns. This doesn't include
any extensions. A separate return includes a re-
turn filed by you or your spouse claiming mar-
ried filing separately, single, or head of house-
hold filing status.
Separate Returns After
Joint Return
Once you file a joint return, you can’t choose to
file separate returns for that year after the due
date of the return.
Exception. A personal representative for a de-
cedent can change from a joint return elected
by the surviving spouse to a separate return for
the decedent. The personal representative has
1 year from the due date (including extensions)
of the return to make the change. See Pub. 559,
Survivors, Executors, and Administrators, for
more information on filing a return for a dece-
dent.
Head of Household
You may be able to file as head of household if
you meet all of the following requirements.
1. You are unmarried or considered unmar-
ried on the last day of the year. See Mari-
tal Status, earlier, and Considered Unmar-
ried, later.
2. You paid more than half of the cost of
keeping up a home for the year.
3. A qualifying person lived with you in the
home for more than half the year (except
for temporary absences, such as school).
However, if the qualifying person is your
dependent parent, he or she doesn't have
to live with you. See Special rule for pa-
rent, later, under Qualifying Person.
If you qualify to file as head of house-
hold, your tax rate will usually be lower
than the rates for single or married fil-
ing separately. You will also receive a higher
standard deduction than if you file as single or
married filing separately.TIP
How to file. Indicate your choice of this filing
status by checking the “Head of household” box
on the Filing Status line at the top of Form 1040
or 1040-SR. If the child who qualifies you for
this filing status isn't claimed as your dependent
in the Dependents section of Form 1040 or
1040-SR, enter the child's name in the entry
space at the bottom of the Filing Status section.
Use the Head of a household column of the Tax
Table, or Section D of the Tax Computation
Worksheet, to figure your tax.
Considered Unmarried
To qualify for head of household status, you
must be either unmarried or considered unmar-
ried on the last day of the year. You are consid-
ered unmarried on the last day of the tax year if
you meet all of the following tests.
1. You file a separate return. A separate re-
turn includes a return claiming married fil-
ing separately, single, or head of house-
hold filing status.
2. You paid more than half of the cost of
keeping up your home for the tax year.
3. Your spouse didn't live in your home dur-
ing the last 6 months of the tax year. Your
spouse is considered to live in your home
even if he or she is temporarily absent due
to special circumstances. See Temporary
absences under Qualifying Person, later.
4. Your home was the main home of your
child, stepchild, or foster child for more
than half the year. (See Home of qualifying
person under Qualifying Person, later, for
rules applying to a child's birth, death, or
temporary absence during the year.)
5. You must be able to claim the child as a
dependent. However, you meet this test if
you can’t claim the child as a dependent
only because the noncustodial parent can
claim the child using the rules described in
Children of divorced or separated parents
(or parents who live apart) under Qualify-
ing Child in chapter 3, or referred to in
Support Test for Children of Divorced or
Separated Parents (or Parents Who Live
Apart) under Qualifying Relative in chap-
ter 3. The general rules for claiming a child
as a dependent are explained in chap-
ter 3.
If you were considered married for part
of the year and lived in a community
property state (listed earlier under Mar-
ried Filing Separately), special rules may apply
in determining your income and expenses. See
Pub. 555 for more information.
Nonresident alien spouse. You are consid-
ered unmarried for head of household purposes
if your spouse was a nonresident alien at any
time during the year and you don’t choose to
treat your nonresident spouse as a resident
alien. However, your spouse isn't a qualifying
person for head of household purposes. You
must have another qualifying person and meet
the other tests to be eligible to file as head of
household.
Choice to treat spouse as resident. You
are considered married if you choose to treatCAUTION
!
Page 24 Chapter 2 Filing Status
your spouse as a resident alien. See chapter 1
of Pub. 519.
Keeping Up a Home
To qualify for head of household status, you
must pay more than half of the cost of keeping
up a home for the year. You can determine
whether you paid more than half of the cost of
keeping up a home by using Worksheet 2-1.
Costs you include. Include in the cost of
keeping up a home expenses, such as rent,
mortgage interest, real estate taxes, insurance
on the home, repairs, utilities, and food eaten in
the home.
Costs you don’t include. Don’t include the
costs of clothing, education, medical treatment,
vacations, life insurance, or transportation. Also
don’t include the value of your services or those
of a member of your household.
Qualifying Person
See Table 2-1 to see who is a qualifying person.
Any person not described in Table 2-1 isn't a
qualifying person.
Example 1—Child. Your unmarried son
lived with you all year and was 18 years old at
the end of the year. He didn't provide more than
half of his own support and doesn't meet the
tests to be a qualifying child of anyone else. As
a result, he is your qualifying child (see Qualify-
ing Child in chapter 3) and, because he is sin-
gle, your qualifying person for head of house-
hold purposes.
Example 2—Child who isn't qualifying
person. The facts are the same as in Exam-
ple 1, except your son was 25 years old at the
end of the year and his gross income was
$5,000. Because he doesn't meet the age test
(explained under Qualifying Child in chapter 3),
your son isn't your qualifying child. Because he
doesn't meet the gross income test (explained
under Qualifying Relative in chapter 3), he isn't
your qualifying relative. As a result, he isn't your
qualifying person for head of household purpo-
ses.
Example 3—Girlfriend. Your girlfriend
lived with you all year. Even though she may be
your qualifying relative if the gross income and
support tests (explained in chapter 3) are met,
she isn't your qualifying person for head of
household purposes because she isn't related
to you in one of the ways listed under Relatives
who don’t have to live with you in chapter 3.
See Table 2-1.
Example 4—Girlfriend's child. The facts
are the same as in Example 3, except your girl-
friend's 10-year-old son also lived with you all
year. He isn't your qualifying child and, because
he is your girlfriend's qualifying child, he isn't
your qualifying relative (see Not a Qualifying
Child Test in chapter 3). As a result, he isn't
your qualifying person for head of household
purposes.
Home of qualifying person. Generally, the
qualifying person must live with you for more
than half the year.
Special rule for parent. If your qualifying
person is your father or mother, you may be eli-
gible to file as head of household even if your
father or mother doesn't live with you. However,
you must be able to claim your father or mother
as a dependent. Also, you must pay more than
half of the cost of keeping up a home that was
the main home for the entire year for your father
or mother.
If you pay more than half of the cost of keep-
ing your parent in a rest home or home for the
elderly, that counts as paying more than half of
the cost of keeping up your parent's main
home.
Death or birth. You may be eligible to file as
head of household even if the individual who
qualifies you for this filing status is born or dies
during the year. If the individual is your qualify-
ing child, the child must have lived with you for
more than half the part of the year he or she
was alive. If the individual is anyone else, see
Pub. 501 for more information.
Temporary absences. You and your quali-
fying person are considered to live together
even if one or both of you are temporarily ab-
sent from your home due to special circumstan-
ces, such as illness, education, business, vaca-
tion, military service, or detention in a juvenile
facility. It must be reasonable to assume the ab-
sent person will return to the home after the
temporary absence. You must continue to keep
up the home during the absence.
Kidnapped child. You may be eligible to file
as head of household even if the child who is
your qualifying person has been kidnapped. For
more information, see Pub. 501.
Qualifying Widow(er)
If your spouse died in 2021, you can use mar-
ried filing jointly as your filing status for 2021 if
you otherwise qualify to use that status. The
year of death is the last year for which you can
file jointly with your deceased spouse. See Mar-
ried Filing Jointly, earlier.
You may be eligible to use qualifying
widow(er) as your filing status for 2 years fol-
lowing the year your spouse died. For example,
if your spouse died in 2020, and you haven't re-
married, you may be able to use this filing sta-
tus for 2021 and 2022.
This filing status entitles you to use joint re-
turn tax rates and the highest standard deduc-
tion amount (if you don’t itemize deductions). It
doesn't entitle you to file a joint return.
How to file. Indicate your choice of this filing
status by checking the “Qualifying widow(er)”
box on the Filing Status line at the top of Form
1040 or 1040-SR. If the child who qualifies you
for this filing status isn’t claimed as your de-
pendent in the Dependents section of Form
1040 or 1040-SR, enter the child’s name in the
entry space at the bottom of the Filing Status
section. Use the Married filing jointly column of
the Tax Table, or Section B of the Tax Compu-
tation Worksheet, to figure your tax.
Eligibility rules. You are eligible to file your
2021 return as a qualifying widow(er) if you
meet all of the following tests.
• You were entitled to file a joint return with
your spouse for the year your spouse died.
It doesn't matter whether you actually filed
a joint return.
• Your spouse died in 2019 or 2020 and you
didn't remarry before the end of 2021.
• You have a child or stepchild (not a foster
child) whom you can claim as a dependent
or could claim as a dependent except that,
for 2021:
a. The child had gross income of
$4,300 or more,
b. The child filed a joint return, or
c. You could be claimed as a depend-
ent on someone else’s return.
If the child isn't claimed as your de-
pendent in the Dependents section on
Form 1040 or 1040-SR, enter the child's
name in the entry space at the bottom of
Worksheet 2-1. Cost of Keeping
Up a Home Keep for Your Records
Amount
You Paid Total Cost
Property taxes $ $
Mortgage interest expense
Rent
Utility charges
Repairs/Maintenance
Property insurance
Food eaten in the home
Other household expenses
Totals $ $
Minus total amount you paid ( )
Amount others paid $
If the total amount you paid is more than the amount others paid, you meet the
requirement of paying more than half of the cost of keeping up the home.
Chapter 2 Filing Status Page 25
the Filing Status section. If you don’t enter
the name, it will take us longer to process
your return.
• This child lived in your home all year, ex-
cept for temporary absences. See Tempo-
rary absences, earlier, under Head of
Household. There are also exceptions, de-
scribed later, for a child who was born or
died during the year and for a kidnapped
child.
• You paid more than half of the cost of
keeping up a home for the year. See Keep-
ing Up a Home, earlier, under Head of
Household.
Example. John's wife died in 2019. John
hasn't remarried. During 2020 and 2021, he
continued to keep up a home for himself and his
child, who lives with him and whom he can
claim as a dependent. For 2019, he was entitled
to file a joint return for himself and his deceased
wife. For 2020 and 2021, he can file as
qualifying widower. After 2021, he can file as
head of household if he qualifies.
Death or birth. You may be eligible to file as a
qualifying widow(er) if the child who qualifies
you for this filing status is born or dies during
the year. You must have provided more than
half of the cost of keeping up a home that was
the child's main home during the entire part of
the year he or she was alive.
Kidnapped child. You may be eligible to file
as a qualifying widow(er) even if the child who
qualifies you for this filing status has been kid-
napped. See Pub. 501 for more information.
As mentioned earlier, this filing status
is available for only 2 years following
the year your spouse died.CAUTION
!
3.
Dependents
Introduction
This chapter discusses the following topics.
• Dependents—You can generally claim
your qualifying child or qualifying relative
as a dependent.
• Social security number (SSN) requirement
for dependents—You must list the SSN of
any person you claim as a dependent.
How to claim dependents. On page 1 of your
Form 1040 or 1040-SR, enter the names of your
dependents in the Dependents section.
Who Is a Qualifying Person Qualifying You To File as Head of Household?1
Caution. See the text of this chapter for the other requirements you must meet to claim head of household
filing status.
IF the person is your . . . AND . . . THEN that person is . . .
qualifying child (such as a son,
daughter, or grandchild who lived with
you more than half the year and meets
certain other tests)2
he or she is single a qualifying person, whether or
not the child meets the Citizen or
Resident Test in chapter 3.
he or she is married and you can claim him
or her as a dependent
a qualifying person.
he or she is married and you can’t claim him
or her as a dependent
not a qualifying person.3
qualifying relative4 who is your father or
mother
you can claim him or her as a dependent5 a qualifying person.6
you can’t claim him or her as a dependent not a qualifying person.
qualifying relative4 other than your father
or mother (such as a grandparent,
brother, or sister who meets certain
tests)
he or she lived with you more than half the
year, and he or she is related to you in one
of the ways listed under Relatives who don’t
have to live with you in chapter 3 and you
can claim him or her as a dependent5
a qualifying person.
he or she didn't live with you more than half
the year
not a qualifying person.
he or she isn't related to you in one of the
ways listed under Relatives who don’t have
to live with you in chapter 3 and is your
qualifying relative only because he or she
lived with you all year as a member of your
household
not a qualifying person.
you can’t claim him or her as a dependent not a qualifying person.
1 A person can’t qualify more than one taxpayer to use the head of household filing status for the year.
2 The term qualifying child is defined in chapter 3. Note. If you are a noncustodial parent, the term “qualifying child” for head of household filing status doesn't include a child who is your
qualifying child only because of the rules described under Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3. If you are the
custodial parent and those rules apply, the child is generally your qualifying child for head of household filing status even though the child isn't a qualifying child you can claim as a
dependent.
3 This person is a qualifying person if the only reason you can’t claim the person as a dependent is that you, or your spouse if filing jointly, can be claimed as a dependent on another
taxpayer’s return.
4 The term qualifying relative is defined in chapter 3.
5 If you can claim a person as a dependent only because of a multiple support agreement, that person isn't a qualifying person. See Multiple Support Agreement in chapter 3.
6 See Special rule for parent under Qualifying Person, earlier.
Table 2-1.
Page 26 Chapter 3 Dependents
Useful Items
You may want to see:
Publication
501 Dependents, Standard Deduction,
and Filing Information
503 Child and Dependent Care Expenses
526 Charitable Contributions
Form (and Instructions)
2120 Multiple Support Declaration
8332 Release/Revocation of Release of
Claim to Exemption for Child by
Custodial Parent
2120
8332
Dependents
The term “dependent” means:
• A qualifying child, or
• A qualifying relative.
The terms qualifying child and qualifying rel-
ative are defined later.
All the requirements for claiming a depend-
ent are summarized in Table 3-1.
Housekeepers, maids, or servants. If these
people work for you, you can’t claim them as
dependents.
Child tax credit. You may be entitled to a child
tax credit for each qualifying child who was un-
der age 18 at the end of the year if you claimed
that child as a dependent. For more informa-
tion, see chapter 14.
Credit for other dependents. You may be en-
titled to a credit for other dependents for each
qualifying child who does not qualify you for the
child tax credit and for each qualifying relative.
For more information, see chapter 14.
Overview of the Rules for Claiming a Dependent
Caution. This table is only an overview of the rules. For details, see the rest of this chapter.
• You can’t claim any dependents if you (or your spouse, if filing jointly) could be claimed as a dependent by another taxpayer.
• You can’t claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of
withheld income tax or estimated tax paid.
• You can’t claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of
Canada or Mexico.1
• You can’t claim a person as a dependent unless that person is your qualifying child or qualifying relative.
Tests To Be a Qualifying Child Tests To Be a Qualifying Relative
1. The child must be your son, daughter, stepchild, foster child,
brother, sister, half brother, half sister, stepbrother, stepsister,
or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year and
younger than you (or your spouse, if filing jointly); (b) under age
24 at the end of the year, a student, and younger than you (or
your spouse, if filing jointly); or (c) any age if permanently and
totally disabled.
3. The child must have lived with you for more than half of the
year.2
4. The child must not have provided more than half of his or her
own support for the year.
5. The child must not be filing a joint return for the year (unless
that return is filed only to get a refund of income tax withheld or
estimated tax paid).
If the child meets the rules to be a qualifying child of more than one
person, generally only one person can actually treat the child as a
qualifying child. See Qualifying Child of More Than One Person,
later, to find out which person is the person entitled to claim the
child as a qualifying child.
1. The person can’t be your qualifying child or the
qualifying child of any other taxpayer.
2. The person either (a) must be related to you in one of
the ways listed under Relatives who don’t have to live
with you, or (b) must live with you all year as a member
of your household2 (and your relationship must not
violate local law).
3. The person's gross income for the year must be less
than $4,300.3
4. You must provide more than half of the person's total
support for the year.4
1 There is an exception for certain adopted children.
2 There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents (or
parents who live apart), and kidnapped children.
3 There is an exception if the person is disabled and has income from a sheltered workshop.
4 There are exceptions for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped
children.
Table 3-1.
Chapter 3 Dependents Page 27
Exceptions
Even if you have a qualifying child or qualifying
relative, you can claim that person as a depend-
ent only if these three tests are met.
1. Dependent taxpayer test.
2. Joint return test.
3. Citizen or resident test.
These three tests are explained in detail
here.
Dependent Taxpayer Test
If you can be claimed as a dependent by an-
other taxpayer, you can’t claim anyone else as
a dependent. Even if you have a qualifying child
or qualifying relative, you can’t claim that per-
son as a dependent.
If you are filing a joint return and your
spouse can be claimed as a dependent by an-
other taxpayer, you and your spouse can’t claim
any dependents on your joint return.
Joint Return Test
You generally can’t claim a married person as a
dependent if he or she files a joint return.
Exception. You can claim a person as a de-
pendent who files a joint return if that person
and his or her spouse file the joint return only to
claim a refund of income tax withheld or estima-
ted tax paid.
Example 1—Child files joint return. You
supported your 18-year-old daughter, and she
lived with you all year while her husband was in
the Armed Forces. He earned $35,000 for the
year. The couple files a joint return. You can’t
claim your daughter as a dependent.
Example 2—Child files joint return only
as claim for refund of withheld tax. Your
18-year-old son and his 17-year-old wife had
$800 of wages from part-time jobs and no other
income. They lived with you all year. Neither is
required to file a tax return. They don’t have a
child. Taxes were taken out of their pay so they
filed a joint return only to get a refund of the
withheld taxes. The exception to the joint return
test applies, so you aren't disqualified from
claiming each of them as a dependent just be-
cause they file a joint return. You can claim
each of them as a dependent if all the other
tests to do so are met.
Example 3—Child files joint return to
claim American opportunity credit. The
facts are the same as in Example 2, except no
taxes were taken out of your son's pay or his
wife's pay. However, they file a joint return to
claim an American opportunity credit of $124
and get a refund of that amount. Because
claiming the American opportunity credit is their
reason for filing the return, they aren't filing it
only to get a refund of income tax withheld or
estimated tax paid. The exception to the joint
return test doesn't apply, so you can’t claim ei-
ther of them as a dependent.
Citizen or Resident Test
You generally can’t claim a person as a de-
pendent unless that person is a U.S. citizen,
U.S. resident alien, U.S. national, or a resident
of Canada or Mexico. However, there is an ex-
ception for certain adopted children, as ex-
plained next.
Exception for adopted child. If you are a
U.S. citizen or U.S. national who has legally
adopted a child who isn't a U.S. citizen, U.S.
resident alien, or U.S. national, this test is met if
the child lived with you as a member of your
household all year. This exception also applies
if the child was lawfully placed with you for legal
adoption and the child lived with you for the rest
of the year after placement.
Child's place of residence. Children usually
are citizens or residents of the country of their
parents.
If you were a U.S. citizen when your child
was born, the child may be a U.S. citizen and
meet this test even if the other parent was a
nonresident alien and the child was born in a
foreign country.
Foreign students' place of residence. For-
eign students brought to this country under a
qualified international education exchange pro-
gram and placed in American homes for a tem-
porary period generally aren't U.S. residents
and don’t meet this test. You can’t claim them
as dependents. However, if you provided a
home for a foreign student, you may be able to
take a charitable contribution deduction. See
Expenses Paid for Student Living With You in
Pub. 526, Charitable Contributions.
U.S. national. A U.S. national is an individual
who, although not a U.S. citizen, owes his or
her allegiance to the United States. U.S. nation-
als include American Samoans and Northern
Mariana Islanders who chose to become U.S.
nationals instead of U.S. citizens.
Qualifying Child
Five tests must be met for a child to be your
qualifying child. The five tests are:
1. Relationship,
2. Age,
3. Residency,
4. Support, and
5. Joint return.
These tests are explained next.
If a child meets the five tests to be the
qualifying child of more than one per-
son, there are rules you must use to
determine which person can actually treat the
child as a qualifying child. See Qualifying Child
of More Than One Person, later.
Relationship Test
To meet this test, a child must be:
• Your son, daughter, stepchild, foster child,
or a descendant (for example, your grand-
child) of any of them; orCAUTION
!
• Your brother, sister, half brother, half sis-
ter, stepbrother, stepsister, or a descend-
ant (for example, your niece or nephew) of
any of them.
Adopted child. An adopted child is always
treated as your own child. The term “adopted
child” includes a child who was lawfully placed
with you for legal adoption.
Foster child. A foster child is an individual who
is placed with you by an authorized placement
agency or by judgment, decree, or other order
of any court of competent jurisdiction.
Age Test
To meet this test, a child must be:
• Under age 19 at the end of the year and
younger than you (or your spouse, if filing
jointly);
• A student under age 24 at the end of the
year and younger than you (or your
spouse, if filing jointly); or
• Permanently and totally disabled at any
time during the year, regardless of age.
Example. Your son turned 19 on Decem-
ber 10. Unless he was permanently and totally
disabled or a student, he doesn't meet the age
test because, at the end of the year, he wasn't
under age 19.
Child must be younger than you or spouse.
To be your qualifying child, a child who isn't per-
manently and totally disabled must be younger
than you. However, if you are married filing
jointly, the child must be younger than you or
your spouse but doesn't have to be younger
than both of you.
Example 1—Child not younger than you
or spouse. Your 23-year-old brother, who is a
student and unmarried, lives with you and your
spouse, who provide more than half of his sup-
port. He isn't disabled. Both you and your
spouse are 21 years old, and you file a joint re-
turn. Your brother isn't your qualifying child be-
cause he isn't younger than you or your spouse.
Example 2—Child younger than your
spouse but not younger than you. The facts
are the same as in Example 1, except your
spouse is 25 years old. Because your brother is
younger than your spouse, and you and your
spouse are filing a joint return, your brother is
your qualifying child, even though he isn't
younger than you.
Student defined. To qualify as a student, your
child must be, during some part of each of any 5
calendar months of the year:
1. A full-time student at a school that has a
regular teaching staff, course of study, and
a regularly enrolled student body at the
school; or
2. A student taking a full-time, on-farm train-
ing course given by a school described in
(1), or by a state, county, or local govern-
ment agency.
The 5 calendar months don’t have to be con-
secutive.
Page 28 Chapter 3 Dependents
Full-time student. A full-time student is a
student who is enrolled for the number of hours
or courses the school considers to be full-time
attendance.
School defined. A school can be an ele-
mentary school; junior or senior high school;
college; university; or technical, trade, or me-
chanical school. However, an on-the-job train-
ing course, correspondence school, or school
offering courses only through the Internet
doesn’t count as a school.
Vocational high school students. Stu-
dents who work on “co-op” jobs in private indus-
try as a part of a school's regular course of
classroom and practical training are considered
full-time students.
Permanently and totally disabled. Your child
is permanently and totally disabled if both of the
following apply.
• He or she can’t engage in any substantial
gainful activity because of a physical or
mental condition.
• A doctor determines the condition has las-
ted or can be expected to last continuously
for at least a year or can lead to death.
Residency Test
To meet this test, your child must have lived
with you for more than half the year. There are
exceptions for temporary absences, children
who were born or died during the year, kidnap-
ped children, and children of divorced or sepa-
rated parents.
Temporary absences. Your child is consid-
ered to have lived with you during periods of
time when one of you, or both, are temporarily
absent due to special circumstances such as:
• Illness,
• Education,
• Business,
• Vacation,
• Military service, or
• Detention in a juvenile facility.
Death or birth of child. A child who was born
or died during the year is treated as having lived
with you more than half of the year if your home
was the child's home more than half of the time
he or she was alive during the year. The same
is true if the child lived with you more than half
the year except for any required hospital stay
following birth.
Child born alive. You may be able to claim
as a dependent a child born alive during the
year, even if the child lived only for a moment.
State or local law must treat the child as having
been born alive. There must be proof of a live
birth shown by an official document, such as a
birth certificate. The child must be your qualify-
ing child or qualifying relative, and all the other
tests to claim the child as a dependent must be
met.
Stillborn child. You can’t claim a stillborn
child as a dependent.
Kidnapped child. You may be able to treat
your child as meeting the residency test even if
the child has been kidnapped. See Pub. 501 for
details.
Children of divorced or separated parents
(or parents who live apart). In most cases,
because of the residency test, a child of di-
vorced or separated parents is the qualifying
child of the custodial parent. However, the child
will be treated as the qualifying child of the non-
custodial parent if all four of the following state-
ments are true.
1. The parents:
a. Are divorced or legally separated un-
der a decree of divorce or separate
maintenance;
b. Are separated under a written separa-
tion agreement; or
c. Lived apart at all times during the last
6 months of the year, whether or not
they are or were married.
2. The child received over half of his or her
support for the year from the parents.
3. The child is in the custody of one or both
parents for more than half of the year.
4. Either of the following statements is true.
a. The custodial parent signs a written
declaration, discussed later, that he or
she won't claim the child as a depend-
ent for the year, and the noncustodial
parent attaches this written declara-
tion to his or her return. (If the decree
or agreement went into effect after
1984 and before 2009, see Post-1984
and pre-2009 divorce decree or sepa-
ration agreement, later. If the decree
or agreement went into effect after
2008, see Post-2008 divorce decree
or separation agreement, later.)
b. A pre-1985 decree of divorce or sepa-
rate maintenance or written separa-
tion agreement that applies to 2021
states that the noncustodial parent
can claim the child as a dependent,
the decree or agreement wasn't
changed after 1984 to say the non-
custodial parent can’t claim the child
as a dependent, and the noncustodial
parent provides at least $600 for the
child's support during the year.
If statements (1) through (4) are all true, only
the noncustodial parent can:
• Claim the child as a dependent, and
• Claim the child as a qualifying child for the
child tax credit or credit for other depend-
ents.
However, this doesn’t allow the noncustodial
parent to claim head of household filing status,
the credit for child and dependent care expen-
ses, the exclusion for dependent care benefits,
the earned income credit, or the health cover-
age tax credit. See Applying the tiebreaker rules
to divorced or separated parents (or parents
who live apart), later.
Example—Earned income credit. Even if
statements (1) through (4) are all true and the
custodial parent signs Form 8332 or a substan-
tially similar statement that he or she won’t
claim the child as a dependent for 2021, this
doesn’t allow the noncustodial parent to claim
the child as a qualifying child for the earned in-
come credit. The custodial parent or another
taxpayer, if eligible, can claim the child for the
earned income credit.
Custodial parent and noncustodial pa-
rent. The custodial parent is the parent with
whom the child lived for the greater number of
nights during the year. The other parent is the
noncustodial parent.
If the parents divorced or separated during
the year and the child lived with both parents
before the separation, the custodial parent is
the one with whom the child lived for the greater
number of nights during the rest of the year.
A child is treated as living with a parent for a
night if the child sleeps:
• At that parent's home, whether or not the
parent is present; or
• In the company of the parent, when the
child doesn't sleep at a parent's home (for
example, the parent and child are on vaca-
tion together).
Equal number of nights. If the child lived
with each parent for an equal number of nights
during the year, the custodial parent is the pa-
rent with the higher adjusted gross income
(AGI).
December 31. The night of December 31 is
treated as part of the year in which it begins. For
example, the night of December 31, 2021, is
treated as part of 2021.
Emancipated child. If a child is emancipa-
ted under state law, the child is treated as not
living with either parent. See Examples 5 and 6.
Absences. If a child wasn't with either pa-
rent on a particular night (because, for example,
the child was staying at a friend's house), the
child is treated as living with the parent with
whom the child normally would have lived for
that night, except for the absence. But if it can’t
be determined with which parent the child nor-
mally would have lived or if the child wouldn’t
have lived with either parent that night, the child
is treated as not living with either parent that
night.
Parent works at night. If, due to a parent's
nighttime work schedule, a child lives for a
greater number of days, but not nights, with the
parent who works at night, that parent is treated
as the custodial parent. On a school day, the
child is treated as living at the primary resi-
dence registered with the school.
Example 1—Child lived with one parent
for a greater number of nights. You and your
child’s other parent are divorced. In 2021, your
child lived with you 210 nights and with the
other parent 155 nights. You are the custodial
parent.
Example 2—Child is away at camp. In
2021, your daughter lives with each parent for
alternate weeks. In the summer, she spends 6
weeks at summer camp. During the time she is
at camp, she is treated as living with you for 3
weeks and with her other parent, your
ex-spouse, for 3 weeks because this is how
long she would have lived with each parent if
she hadn’t attended summer camp.
Chapter 3 Dependents Page 29
Example 3—Child lived same number of
nights with each parent. Your son lived with
you 180 nights during the year and lived the
same number of nights with his other parent,
your ex-spouse. Your AGI is $40,000. Your
ex-spouse's AGI is $25,000. You are treated as
your son's custodial parent because you have
the higher AGI.
Example 4—Child is at parent’s home
but with other parent. Your son normally lives
with you during the week and with his other pa-
rent, your ex-spouse, every other weekend.
You become ill and are hospitalized. The other
parent lives in your home with your son for 10
consecutive days while you are in the hospital.
Your son is treated as living with you during this
10-day period because he was living in your
home.
Example 5—Child emancipated in May.
When your son turned age 18 in May 2021, he
became emancipated under the law of the state
where he lives. As a result, he isn't considered
in the custody of his parents for more than half
of the year. The special rule for children of di-
vorced or separated parents doesn't apply.
Example 6—Child emancipated in Au-
gust. Your daughter lives with you from Janu-
ary 1, 2021, until May 31, 2021, and lives with
her other parent, your ex-spouse, from June 1,
2021, through the end of the year. She turns 18
and is emancipated under state law on August
1, 2021. Because she is treated as not living
with either parent beginning on August 1, she is
treated as living with you the greater number of
nights in 2021. You are the custodial parent.
Written declaration. The custodial parent
must use either Form 8332 or a similar state-
ment (containing the same information required
by the form) to make the written declaration to
release a claim to an exemption for a child to
the noncustodial parent. Although the exemp-
tion amount is zero for tax year 2021, this re-
lease allows the noncustodial parent to claim
the child tax credit, additional child tax credit,
and credit for other dependents, if applicable,
for the child. The noncustodial parent must at-
tach a copy of the form or statement to his or
her tax return.
The release can be for 1 year, for a number
of specified years (for example, alternate
years), or for all future years, as specified in the
declaration.
Post-1984 and pre-2009 divorce decree
or separation agreement. If the divorce de-
cree or separation agreement went into effect
after 1984 and before 2009, the noncustodial
parent may be able to attach certain pages from
the decree or agreement instead of Form 8332.
The decree or agreement must state all three of
the following.
1. The noncustodial parent can claim the
child as a dependent without regard to any
condition, such as payment of support.
2. The custodial parent won't claim the child
as a dependent for the year.
3. The years for which the noncustodial pa-
rent, rather than the custodial parent, can
claim the child as a dependent.
The noncustodial parent must attach all of
the following pages of the decree or agreement
to his or her tax return.
• The cover page (write the other parent's
social security number on this page).
• The pages that include all of the informa-
tion identified in items (1) through (3)
above.
• The signature page with the other parent's
signature and the date of the agreement.
Post-2008 divorce decree or separation
agreement. The noncustodial parent can’t at-
tach pages from the decree or agreement in-
stead of Form 8332 if the decree or agreement
went into effect after 2008. The custodial parent
must sign either Form 8332 or a similar state-
ment whose only purpose is to release the cus-
todial parent's claim to an exemption for a child,
and the noncustodial parent must attach a copy
to his or her return. The form or statement must
release the custodial parent's claim to the child
without any conditions. For example, the re-
lease must not depend on the noncustodial pa-
rent paying support.
The noncustodial parent must attach
the required information even if it was
filed with a return in an earlier year.
Revocation of release of claim to an ex-
emption. The custodial parent can revoke a
release of claim to an exemption. For the revo-
cation to be effective for 2021, the custodial pa-
rent must have given (or made reasonable ef-
forts to give) written notice of the revocation to
the noncustodial parent in 2020 or earlier. The
custodial parent can use Part III of Form 8332
for this purpose and must attach a copy of the
revocation to his or her return for each tax year
he or she claims the child as a dependent as a
result of the revocation.
Remarried parent. If you remarry, the sup-
port provided by your new spouse is treated as
provided by you.
Parents who never married. This special
rule for divorced or separated parents also ap-
plies to parents who never married and who
lived apart at all times during the last 6 months
of the year.
Support Test (To Be a Qualifying
Child)
To meet this test, the child can’t have provided
more than half of his or her own support for the
year.
This test is different from the support test to
be a qualifying relative, which is described later.
However, to see what is or isn't support, see
Support Test (To Be a Qualifying Relative),
later. If you aren't sure whether a child provided
more than half of his or her own support, you
may find Worksheet 3-1 helpful.
Example. You provided $4,000 toward
your 16-year-old son's support for the year. He
has a part-time job and provided $6,000 to his
own support. He provided more than half of his
own support for the year. He isn't your qualify-
ing child.CAUTION
!
Foster care payments and expenses. Pay-
ments you receive for the support of a foster
child from a child placement agency are consid-
ered support provided by the agency. Similarly,
payments you receive for the support of a foster
child from a state or county are considered sup-
port provided by the state or county.
If you aren't in the trade or business of pro-
viding foster care and your unreimbursed
out-of-pocket expenses in caring for a foster
child were mainly to benefit an organization
qualified to receive deductible charitable contri-
butions, the expenses are deductible as chari-
table contributions but aren't considered sup-
port you provided. For more information about
the deduction for charitable contributions, see
Pub. 526. If your unreimbursed expenses aren't
deductible as charitable contributions, they may
qualify as support you provided.
If you are in the trade or business of provid-
ing foster care, your unreimbursed expenses
aren't considered support provided by you.
Example 1. Lauren, a foster child, lived
with Mr. and Mrs. Smith for the last 3 months of
the year. The Smiths cared for Lauren because
they wanted to adopt her (although she hadn’t
been placed with them for adoption). They
didn't care for her as a trade or business or to
benefit the agency that placed her in their
home. The Smiths' unreimbursed expenses
aren't deductible as charitable contributions but
are considered support they provided for Lau-
ren.
Example 2. You provided $3,000 toward
your 10-year-old foster child's support for the
year. The state government provided $4,000,
which is considered support provided by the
state, not by the child. See Support provided by
the state (welfare, food stamps, housing, etc.),
later. Your foster child didn't provide more than
half of her own support for the year.
Scholarships. A scholarship received by a
child who is a student isn't taken into account in
determining whether the child provided more
than half of his or her own support.
Joint Return Test (To Be a
Qualifying Child)
To meet this test, the child can’t file a joint re-
turn for the year.
Exception. An exception to the joint return test
applies if your child and his or her spouse file a
joint return only to claim a refund of income tax
withheld or estimated tax paid.
Example 1—Child files joint return. You
supported your 18-year-old daughter, and she
lived with you all year while her husband was in
the Armed Forces. He earned $35,000 for the
year. The couple files a joint return. Because
your daughter and her husband file a joint re-
turn, she isn't your qualifying child.
Example 2—Child files joint return only
as a claim for refund of withheld tax. Your
18-year-old son and his 17-year-old wife had
$800 of wages from part-time jobs and no other
income. They lived with you all year. Neither is
required to file a tax return. They don’t have a
child. Taxes were taken out of their pay so they
Page 30 Chapter 3 Dependents
Worksheet for Determining SupportWorksheet 3-1. Keep for Your Records
Funds Belonging to the Person You Supported
1. Enter the total funds belonging to the person you supported, including income received (taxable
and nontaxable) and amounts borrowed during the year, plus the amount in savings and other
accounts at the beginning of the year. Don’t include funds provided by the state; include those
amounts on line 23 instead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the amount on line 1 that was used for the person's support . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter the amount on line 1 that was used for other purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the total amount in the person's savings and other accounts at the end of the year . . . . . . 4.
5. Add lines 2 through 4. (This amount should equal line 1.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
Expenses for Entire Household (where the person you supported lived)
6. Lodging (complete line 6a or 6b):
a. Enter the total rent paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6a.
b. Enter the fair rental value of the home. If the person you supported owned the home,
also include this amount in line 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6b.
7. Enter the total food expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter the total amount of utilities (heat, light, water, etc., not included in line 6a or 6b) . . . . . . . . 8.
9. Enter the total amount of repairs (not included in line 6a or 6b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Enter the total of other expenses. Don’t include expenses of maintaining the home, such as
mortgage interest, real estate taxes, and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Add lines 6a through 10. These are the total household expenses . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter total number of persons who lived in the household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Expenses for the Person You Supported
13. Divide line 11 by line 12. This is the person's share of the household expenses . . . . . . . . . . . . . 13.
14. Enter the person's total clothing expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Enter the person's total education expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Enter the person's total medical and dental expenses not paid for or reimbursed by
insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Enter the person's total travel and recreation expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
18. Enter the total of the person's other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
19. Add lines 13 through 18. This is the total cost of the person's support for the year . . . . . . . . . . . 19.
Did the Person Provide More Than Half of His or Her Own Support?
20. Multiply line 19 by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21. Enter the amount from line 2, plus the amount from line 6b if the person you supported owned
the home. This is the amount the person provided for his or her own support . . . . . . . . . . . . . . . 21.
22. Is line 21 more than line 20?
No. You meet the support test for this person to be your qualifying child. If this person also meets the other tests to be
a qualifying child, stop here; don’t complete lines 23–26. Otherwise, go to line 23 and fill out the rest of the worksheet to
determine if this person is your qualifying relative.
Yes. You don’t meet the support test for this person to be either your qualifying child or your qualifying relative. Stop
here.
Did You Provide More Than Half?
23. Enter the amount others provided for the person's support. Include amounts provided by state,
local, and other welfare societies or agencies. Don’t include any amounts included on
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.
24. Add lines 21 and 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.
25. Subtract line 24 from line 19. This is the amount you provided for the person's support . . . . . . . 25.
26. Is line 25 more than line 20?
Yes. You meet the support test for this person to be your qualifying relative.
No. You don’t meet the support test for this person to be your qualifying relative. You can’t claim this person as a
dependent unless you can do so under a multiple support agreement, the support test for children of divorced or
separated parents, or the special rule for kidnapped children. See Multiple Support Agreement or Support Test for
Children of Divorced or Separated Parents (or Parents Who Live Apart), or Kidnapped child under Qualifying Relative.
Chapter 3 Dependents Page 31
filed a joint return only to get a refund of the
withheld taxes. The exception to the joint return
test applies, so your son may be your qualifying
child if all the other tests are met.
Example 3—Child files joint return to
claim American opportunity credit. The
facts are the same as in Example 2, except no
taxes were taken out of your son's pay or his
wife's pay. However, they file a joint return to
claim an American opportunity credit of $124
and get a refund of that amount. Because
claiming the American opportunity credit is their
reason for filing the return, they aren't filing it
only to get a refund of income tax withheld or
estimated tax paid. The exception to the joint
return test doesn't apply, so your son isn't your
qualifying child.
Qualifying Child of More Than One
Person
If your qualifying child isn't a qualifying
child of anyone else, this topic doesn't
apply to you and you don’t need to
read about it. This is also true if your qualifying
child isn't a qualifying child of anyone else ex-
cept your spouse with whom you plan to file a
joint return.
If a child is treated as the qualifying
child of the noncustodial parent under
the rules for children of divorced or
separated parents (or parents who live apart)
described earlier, see Applying the tiebreaker
rules to divorced or separated parents (or pa-
rents who live apart), later.
Sometimes, a child meets the relationship, age,
residency, support, and joint return tests to be a
qualifying child of more than one person. Al-
though the child is a qualifying child of each of
these persons, generally only one person can
actually treat the child as a qualifying child to
take all of the following tax benefits (provided
the person is eligible for each benefit).
1. The child tax credit or credit for other de-
pendents.
2. Head of household filing status.
3. The credit for child and dependent care
expenses.
4. The exclusion from income for dependent
care benefits.
5. The earned income credit.
The other person can’t take any of these
benefits based on this qualifying child. In other
words, you and the other person can’t agree to
divide these benefits between you.
Tiebreaker rules. To determine which person
can treat the child as a qualifying child to claim
these five tax benefits, the following tiebreaker
rules apply.
• If only one of the persons is the child's pa-
rent, the child is treated as the qualifying
child of the parent.
• If the parents file a joint return together and
can claim the child as a qualifying child,
the child is treated as the qualifying child of
the parents.TIPCAUTION
!
• If the parents don’t file a joint return to-
gether but both parents claim the child as a
qualifying child, the IRS will treat the child
as the qualifying child of the parent with
whom the child lived for the longer period
of time during the year. If the child lived
with each parent for the same amount of
time, the IRS will treat the child as the qual-
ifying child of the parent who had the
higher adjusted gross income (AGI) for the
year.
• If no parent can claim the child as a quali-
fying child, the child is treated as the quali-
fying child of the person who had the high-
est AGI for the year.
• If a parent can claim the child as a qualify-
ing child but no parent does so claim the
child, the child is treated as the qualifying
child of the person who had the highest
AGI for the year, but only if that person's
AGI is higher than the highest AGI of any of
the child's parents who can claim the child.
Subject to these tiebreaker rules, you and
the other person may be able to choose which
of you claims the child as a qualifying child.
You may be able to qualify for the
earned income credit under the rules
for taxpayers without a qualifying child
if you have a qualifying child for the earned in-
come credit who is claimed as a qualifying child
by another taxpayer. For more information, see
Pub. 596.
Example 1—Child lived with parent and
grandparent. You and your 3-year-old daugh-
ter Jane lived with your mother all year. You are
25 years old, unmarried, and your AGI is
$9,000. Your mother's AGI is $15,000. Jane's
father didn't live with you or your daughter. You
haven't signed Form 8332 (or a similar state-
ment).
Jane is a qualifying child of both you and
your mother because she meets the relation-
ship, age, residency, support, and joint return
tests for both you and your mother. However,
only one of you can claim her. Jane isn't a quali-
fying child of anyone else, including her father.
You agree to let your mother claim Jane. This
means your mother can claim Jane as a qualify-
ing child for all of the five tax benefits listed ear-
lier, if she qualifies for each of those benefits
(and if you don’t claim Jane as a qualifying child
for any of those tax benefits).
Example 2—Parent has higher AGI than
grandparent. The facts are the same as in Ex-
ample 1, except your AGI is $18,000. Because
your mother's AGI isn't higher than yours, she
can’t claim Jane. Only you can claim Jane.
Example 3—Two persons claim same
child. The facts are the same as in Example 1,
except that you and your mother both claim
Jane as a qualifying child. In this case, you, as
the child's parent, will be the only one allowed
to claim Jane as a qualifying child. The IRS will
disallow your mother's claim to the five tax ben-
efits listed earlier based on Jane. However,
your mother may qualify for the earned income
credit as a taxpayer without a qualifying child.TIP
Example 4—Qualifying children split be-
tween two persons. The facts are the same
as in Example 1, except you also have two
other young children who are qualifying children
of both you and your mother. Only one of you
can claim each child. However, if your mother's
AGI is higher than yours, you can allow your
mother to claim one or more of the children. For
example, if you claim one child, your mother
can claim the other two.
Example 5—Taxpayer who is a qualify-
ing child. The facts are the same as in Exam-
ple 1, except you are only 18 years old and
didn't provide more than half of your own sup-
port for the year. This means you are your
mother's qualifying child. If she can claim you
as a dependent, then you can’t claim your
daughter as a dependent because of the De-
pendent Taxpayer Test, explained earlier.
Example 6—Separated parents. You,
your husband, and your 10-year-old son lived
together until August 1, 2021, when your hus-
band moved out of the household. In August
and September, your son lived with you. For the
rest of the year, your son lived with your hus-
band, the boy's father. Your son is a qualifying
child of both you and your husband because
your son lived with each of you for more than
half the year and because he met the relation-
ship, age, support, and joint return tests for both
of you. At the end of the year, you and your hus-
band still weren't divorced, legally separated, or
separated under a written separation agree-
ment, so the rule for children of divorced or sep-
arated parents (or parents who live apart)
doesn't apply.
You and your husband will file separate re-
turns. Your husband agrees to let you treat your
son as a qualifying child. This means, if your
husband doesn't claim your son as a qualifying
child, you can claim your son as a qualifying
child for the child tax credit and exclusion for
dependent care benefits (if you qualify for each
of those tax benefits). However, you can’t claim
head of household filing status because you
and your husband didn't live apart for the last 6
months of the year. As a result, your filing status
is married filing separately, so you can’t claim
the earned income credit because you and your
husband didn't live apart for the last 6 months of
2021, and you aren't legally separated under a
written separation agreement or decree of sep-
arate maintenance. Therefore, you don't meet
the requirements to take the earned income
credit as married filing separately. You also
can't take the credit for child and dependent
care expenses because your fling status is mar-
ried filing separately and you and your husband
didn't live apart for the last 6 months of 2021.
Example 7—Separated parents claim
same child. The facts are the same as in Ex-
ample 6, except that you and your husband
both claim your son as a qualifying child. In this
case, only your husband will be allowed to treat
your son as a qualifying child. This is because,
during 2021, the boy lived with him longer than
with you. If you claimed the child tax credit for
your son, the IRS will disallow your claim to the
child tax credit. If you don’t have another quali-
fying child or dependent, the IRS will also disal-
low your claim to the exclusion for dependent
Page 32 Chapter 3 Dependents
care benefits. In addition, because you and
your husband didn't live apart for the last 6
months of the year, your husband can’t claim
head of household filing status. As a result, his
filing status is married filing separately, so he
can’t claim the earned income credit because
you and your husband didn't live apart for the
last 6 months of 2021, and you aren't legally
separated under a written separation agree-
ment or decree of separate maintenance.
Therefore, your husband doesn't meet the re-
quirements to take the earned income credit as
married filing separately. Your husband also
can't take the credit for child and dependent
care expenses because his filing status is mar-
ried filing separately and you and your husband
didn't live apart for the last 6 months of 2021.
Example 8—Unmarried parents. You,
your 5-year-old son, and your son's father lived
together all year. You and your son's father
aren't married. Your son is a qualifying child of
both you and his father because he meets the
relationship, age, residency, support, and joint
return tests for both you and his father. Your
AGI is $12,000 and your son's father's AGI is
$14,000. Your son's father agrees to let you
claim the child as a qualifying child. This means
you can claim him as a qualifying child for the
child tax credit, head of household filing status,
credit for child and dependent care expenses,
exclusion for dependent care benefits, and the
earned income credit, if you qualify for each of
those tax benefits (and if your son's father
doesn't claim your son as a qualifying child for
any of those tax benefits).
Example 9—Unmarried parents claim
same child. The facts are the same as in Ex-
ample 8, except that you and your son's father
both claim your son as a qualifying child. In this
case, only your son's father will be allowed to
treat your son as a qualifying child. This is be-
cause his AGI, $14,000, is more than your AGI,
$12,000. If you claimed the child tax credit for
your son, the IRS will disallow your claim to this
credit. If you don’t have another qualifying child
or dependent, the IRS will also disallow your
claim to head of household filing status, the
credit for child and dependent care expenses,
and the exclusion for dependent care benefits.
However, you may be able to claim the earned
income credit as a taxpayer without a qualifying
child.
Example 10—Child didn't live with a pa-
rent. You and your 7-year-old niece, your si-
ster's child, lived with your mother all year. You
are 25 years old, and your AGI is $9,300. Your
mother's AGI is $15,000. Your niece's parents
file jointly, have an AGI of less than $9,000, and
don’t live with you or their child. Your niece is a
qualifying child of both you and your mother be-
cause she meets the relationship, age, resi-
dency, support, and joint return tests for both
you and your mother. However, only your
mother can treat her as a qualifying child. This
is because your mother's AGI, $15,000, is more
than your AGI, $9,300.
Applying the tiebreaker rules to divorced or
separated parents (or parents who live
apart). If a child is treated as the qualifying
child of the noncustodial parent under the rules
described earlier for children of divorced or sep-
arated parents (or parents who live apart), only
the noncustodial parent can claim the child as a
dependent and claim the child tax credit or
credit for other dependents for the child. How-
ever, only the custodial parent can claim the
credit for child and dependent care expenses or
the exclusion for dependent care benefits for
the child, and only the custodial parent can treat
the child as a dependent for the health cover-
age tax credit. Also, generally the noncustodial
parent can't claim the child as a qualifying child
for head of household filing status or the earned
income credit. Instead, generally the custodial
parent, if eligible, or other eligible person can
claim the child as a qualifying child for those
two benefits. If the child is the qualifying child of
more than one person for these benefits, then
the tiebreaker rules just explained determine
whether the custodial parent or another eligible
person can treat the child as a qualifying child.
Example 1. You and your 5-year-old son
lived all year with your mother, who paid the en-
tire cost of keeping up the home. Your AGI is
$10,000. Your mother's AGI is $25,000. Your
son's father didn't live with you or your son.
Under the rules explained earlier for children
of divorced or separated parents (or parents
who live apart), your son is treated as the quali-
fying child of his father, who can claim the child
tax credit for him. Because of this, you can’t
claim the child tax credit for your son. However,
those rules don't allow your son's father to claim
your son as a qualifying child for head of house-
hold filing status, the credit for child and de-
pendent care expenses, the exclusion for de-
pendent care benefits, the earned income
credit, or the health coverage tax credit.
You and your mother didn't have any child
care expenses or dependent care benefits, so
neither of you can claim the credit for child and
dependent care expenses or the exclusion for
dependent care benefits. Also, neither of you
qualifies for the health coverage tax credit. But
the boy is a qualifying child of both you and your
mother for head of household filing status and
the earned income credit because he meets the
relationship, age, residency, support, and joint
return tests for both you and your mother. (The
support test doesn't apply for the earned in-
come credit.) However, you agree to let your
mother claim your son. This means she can
claim him for head of household filing status
and the earned income credit if she qualifies for
each and if you don’t claim him as a qualifying
child for the earned income credit. (You can’t
claim head of household filing status because
your mother paid the entire cost of keeping up
the home.) You may be able to claim the earned
income credit as a taxpayer without a qualifying
child.
Example 2. The facts are the same as in
Example 1, except your AGI is $25,000 and
your mother's AGI is $21,000. Your mother
can’t claim your son as a qualifying child for any
purpose because her AGI isn't higher than
yours.
Example 3. The facts are the same as in
Example 1, except you and your mother both
claim your son as a qualifying child for the
earned income credit. Your mother also claims
him as a qualifying child for head of household
filing status. You, as the child's parent, will be
the only one allowed to claim your son as a
qualifying child for the earned income credit.
The IRS will disallow your mother's claim to
head of household filing status unless she has
another qualifying child or dependent. Your
mother can't claim the earned income credit as
a taxpayer without a qualifying child because
her AGI is more than $21,430.
Qualifying Relative
Four tests must be met for a person to be your
qualifying relative. The four tests are:
1. Not a qualifying child test,
2. Member of household or relationship test,
3. Gross income test, and
4. Support test.
Age. Unlike a qualifying child, a qualifying rela-
tive can be any age. There is no age test for a
qualifying relative.
Kidnapped child. You may be able to treat a
child as your qualifying relative even if the child
has been kidnapped. See Pub. 501 for details.
Not a Qualifying Child Test
A child isn't your qualifying relative if the child is
your qualifying child or the qualifying child of
any other taxpayer.
Example 1. Your 22-year-old daughter,
who is a student, lives with you and meets all
the tests to be your qualifying child. She isn't
your qualifying relative.
Example 2. Your 2-year-old son lives with
your parents and meets all the tests to be their
qualifying child. He isn't your qualifying relative.
Example 3. Your son lives with you but isn't
your qualifying child because he is 30 years old
and doesn't meet the age test. He may be your
qualifying relative if the gross income test and
the support test are met.
Example 4. Your 13-year-old grandson
lived with his mother for 3 months, with his un-
cle for 4 months, and with you for 5 months dur-
ing the year. He isn't your qualifying child be-
cause he doesn't meet the residency test. He
may be your qualifying relative if the gross in-
come test and the support test are met.
Child of person not required to file a return.
A child isn't the qualifying child of any other tax-
payer and so may qualify as your qualifying rel-
ative if the child's parent (or other person for
whom the child is defined as a qualifying child)
isn't required to file an income tax return and ei-
ther:
• Doesn't file an income tax return, or
• Files a return only to get a refund of in-
come tax withheld or estimated tax paid.
Example 1—Return not required. You
support an unrelated friend and her 3-year-old
child, who lived with you all year in your home.
Your friend has no gross income, isn't required
to file a 2021 tax return, and doesn't file a 2021
tax return. Both your friend and her child are
Chapter 3 Dependents Page 33
your qualifying relatives if the support test is
met.
Example 2—Return filed to claim refund.
The facts are the same as in Example 1, except
your friend had wages of $1,500 during the year
and had income tax withheld from her wages.
She files a return only to get a refund of the in-
come tax withheld and doesn't claim the earned
income credit or any other tax credits or deduc-
tions. Both your friend and her child are your
qualifying relatives if the support test is met.
Example 3—Earned income credit
claimed. The facts are the same as in Exam-
ple 2, except your friend had wages of $8,000
during the year and claimed the earned income
credit on her return. Your friend's child is the
qualifying child of another taxpayer (your
friend), so you can’t claim your friend's child as
your qualifying relative. Also, you can’t claim
your friend as your qualifying relative because
of the gross income test explained later.
Child in Canada or Mexico. You may be able
to claim your child as a dependent even if the
child lives in Canada or Mexico. If the child
doesn't live with you, the child doesn't meet the
residency test to be your qualifying child. How-
ever, the child may still be your qualifying rela-
tive. If the persons the child does live with aren't
U.S. citizens and have no U.S. gross income,
those persons aren't “taxpayers,” so the child
isn't the qualifying child of any other taxpayer. If
the child isn't the qualifying child of any other
taxpayer, the child is your qualifying relative as
long as the gross income test and the support
test are met.
You can’t claim as a dependent a child who
lives in a foreign country other than Canada or
Mexico, unless the child is a U.S. citizen, U.S.
resident alien, or U.S. national. There is an ex-
ception for certain adopted children who lived
with you all year. See Citizen or Resident Test,
earlier.
Example. You provide all the support of
your children, ages 6, 8, and 12, who live in
Mexico with your mother and have no income.
You are single and live in the United States.
Your mother isn't a U.S. citizen and has no U.S.
income, so she isn't a “taxpayer.” Your children
aren't your qualifying children because they
don’t meet the residency test. But since they
aren't the qualifying children of any other tax-
payer, they may be your qualifying relatives and
you may be permitted to claim them as depend-
ents. You may also be able to claim your
mother as a dependent if the gross income and
support tests are met.
Member of Household or
Relationship Test
To meet this test, a person must either:
1. Live with you all year as a member of your
household, or
2. Be related to you in one of the ways listed
under Relatives who don’t have to live with
you next.
If at any time during the year the person was
your spouse, that person can’t be your qualify-
ing relative.
Relatives who don’t have to live with you. A
person related to you in any of the following
ways doesn't have to live with you all year as a
member of your household to meet this test.
• Your child, stepchild, foster child, or a de-
scendant of any of them (for example, your
grandchild). (A legally adopted child is
considered your child.)
• Your brother, sister, half brother, half sis-
ter, stepbrother, or stepsister.
• Your father, mother, grandparent, or other
direct ancestor, but not foster parent.
• Your stepfather or stepmother.
• A son or daughter of your brother or sister.
• A son or daughter of your half brother or
half sister.
• A brother or sister of your father or mother.
• Your son-in-law, daughter-in-law, fa-
ther-in-law, mother-in-law, brother-in-law,
or sister-in-law.
Any of these relationships that were established
by marriage aren't ended by death or divorce.
Example. You and your wife began sup-
porting your wife's father, a widower, in 2015.
Your wife died in 2020. Despite your wife's
death, your father-in-law continues to meet this
test, even if he doesn't live with you. You can
claim him as a dependent if all other tests are
met, including the gross income test and sup-
port test.
Foster child. A foster child is an individual
who is placed with you by an authorized place-
ment agency or by judgment, decree, or other
order of any court of competent jurisdiction.
Joint return. If you file a joint return, the per-
son can be related to either you or your spouse.
Also, the person doesn't need to be related to
the spouse who provides support.
For example, your spouse's uncle who re-
ceives more than half of his support from you
may be your qualifying relative, even though he
doesn't live with you. However, if you and your
spouse file separate returns, your spouse's un-
cle can be your qualifying relative only if he lives
with you all year as a member of your house-
hold.
Temporary absences. A person is considered
to live with you as a member of your household
during periods of time when one of you, or both,
are temporarily absent due to special circum-
stances such as:
• Illness,
• Education,
• Business,
• Vacation,
• Military service, or
• Detention in a juvenile facility.
If the person is placed in a nursing home for
an indefinite period of time to receive constant
medical care, the absence may be considered
temporary.
Death or birth. A person who died during the
year, but lived with you as a member of your
household until death, will meet this test. The
same is true for a child who was born during the
year and lived with you as a member of your
household for the rest of the year. The test is
also met if a child lived with you as a member of
your household except for any required hospital
stay following birth.
If your dependent died during the year and
you otherwise qualify to claim that person as a
dependent, you can still claim that person as a
dependent.
Example. Your mother died on January 15.
She met the tests to be your qualifying relative.
You can claim her as a dependent.
Local law violated. A person doesn't meet
this test if at any time during the year the rela-
tionship between you and that person violates
local law.
Example. Your girlfriend lived with you as a
member of your household all year. However,
your relationship with her violated the laws of
the state where you live because she was mar-
ried to someone else. Therefore, she doesn't
meet this test and you can’t claim her as a de-
pendent.
Adopted child. An adopted child is always
treated as your own child. The term “adopted
child” includes a child who was lawfully placed
with you for legal adoption.
Cousin. Your cousin meets this test only if he
or she lives with you all year as a member of
your household. A cousin is a descendant of a
brother or sister of your father or mother.
Gross Income Test
To meet this test, a person's gross income for
the year must be less than $4,300.
Gross income defined. Gross income is all
income in the form of money, property, and
services that isn't exempt from tax.
In a manufacturing, merchandising, or min-
ing business, gross income is the total net sales
minus the cost of goods sold, plus any miscella-
neous income from the business.
Gross receipts from rental property are
gross income. Don’t deduct taxes, repairs, or
other expenses to determine the gross income
from rental property.
Gross income includes a partner's share of
the gross (not a share of the net) partnership in-
come.
Gross income also includes all taxable un-
employment compensation, taxable social se-
curity benefits, and certain amounts received as
scholarship and fellowship grants. Scholarships
received by degree candidates and used for tui-
tion, fees, supplies, books, and equipment re-
quired for particular courses generally aren't in-
cluded in gross income. For more information
about scholarships, see chapter 8.
Disabled dependent working at sheltered
workshop. For purposes of the gross income
test, the gross income of an individual who is
permanently and totally disabled at any time
during the year doesn't include income for serv-
ices the individual performs at a sheltered work-
shop. The availability of medical care at the
workshop must be the main reason for the indi-
vidual's presence there. Also, the income must
Page 34 Chapter 3 Dependents
come solely from activities at the workshop that
are incident to this medical care.
A “sheltered workshop” is a school that:
• Provides special instruction or training de-
signed to alleviate the disability of the indi-
vidual; and
• Is operated by certain tax-exempt organi-
zations, or by a state, a U.S. possession, a
political subdivision of a state or posses-
sion, the United States, or the District of
Columbia.
Permanently and totally disabled has the
same meaning here as under Qualifying Child,
earlier.
Support Test (To Be a Qualifying
Relative)
To meet this test, you must generally provide
more than half of a person's total support during
the calendar year.
However, if two or more persons provide
support, but no one person provides more than
half of a person's total support, see Multiple
Support Agreement, later.
How to determine if support test is met.
You figure whether you have provided more
than half of a person's total support by compar-
ing the amount you contributed to that person's
support with the entire amount of support that
person received from all sources. This includes
support the person provided from his or her
own funds.
You may find Worksheet 3-1 helpful in figur-
ing whether you provided more than half of a
person's support.
Person's own funds not used for support.
A person's own funds aren't support unless they
are actually spent for support.
Example. Your mother received $2,400 in
social security benefits and $300 in interest.
She paid $2,000 for lodging and $400 for recre-
ation. She put $300 in a savings account.
Even though your mother received a total of
$2,700 ($2,400 + $300), she spent only $2,400
($2,000 + $400) for her own support. If you
spent more than $2,400 for her support and no
other support was received, you have provided
more than half of her support.
Child's wages used for own support. You
can’t include in your contribution to your child's
support any support paid for by the child with
the child's own wages, even if you paid the wa-
ges.
Year support is provided. The year you pro-
vide the support is the year you pay for it, even
if you do so with borrowed money that you re-
pay in a later year.
If you use a fiscal year to report your in-
come, you must provide more than half of the
dependent's support for the calendar year in
which your fiscal year begins.
Armed Forces dependency allotments. The
part of the allotment contributed by the govern-
ment and the part taken out of your military pay
are both considered provided by you in figuring
whether you provide more than half of the sup-
port. If your allotment is used to support per-
sons other than those you name, you can claim
them as dependents if they otherwise qualify.
Example. You are in the Armed Forces.
You authorize an allotment for your widowed
mother that she uses to support herself and her
sister. If the allotment provides more than half of
each person's support, you can claim each of
them as a dependent, if they otherwise qualify,
even though you authorize the allotment only
for your mother.
Tax-exempt military quarters allowances.
These allowances are treated the same way as
dependency allotments in figuring support. The
allotment of pay and the tax-exempt basic al-
lowance for quarters are both considered as
provided by you for support.
Tax-exempt income. In figuring a person's to-
tal support, include tax-exempt income, sav-
ings, and borrowed amounts used to support
that person. Tax-exempt income includes cer-
tain social security benefits, welfare benefits,
nontaxable life insurance proceeds, Armed
Forces family allotments, nontaxable pensions,
and tax-exempt interest.
Example 1. You provide $4,000 toward
your mother's support during the year. She has
earned income of $600, nontaxable social se-
curity benefits of $4,800, and tax-exempt inter-
est of $200. She uses all these for her support.
You can’t claim your mother as a dependent be-
cause the $4,000 you provide isn't more than
half of her total support of $9,600 ($4,000 +
$600 + $4,800 + $200).
Example 2. Your niece takes out a student
loan of $2,500 and uses it to pay her college tui-
tion. She is personally responsible for the loan.
You provide $2,000 toward her total support.
You can’t claim her as a dependent because
you provide less than half of her support.
Social security benefits. If a married cou-
ple receives benefits that are paid by one check
made out to both of them, half of the total paid
is considered to be for the support of each
spouse, unless they can show otherwise.
If a child receives social security benefits
and uses them toward his or her own support,
the benefits are considered as provided by the
child.
Support provided by the state (welfare,
food stamps, housing, etc.). Benefits provi-
ded by the state to a needy person are gener-
ally considered support provided by the state.
However, payments based on the needs of the
recipient won't be considered as used entirely
for that person's support if it is shown that part
of the payments weren't used for that purpose.
Foster care. Payments you receive for the
support of a foster child from a child placement
agency are considered support provided by the
agency. See Foster care payments and expen-
ses, earlier.
Home for the aged. If you make a lump-sum
advance payment to a home for the aged to
take care of your relative for life and the pay-
ment is based on that person's life expectancy,
the amount of support you provide each year is
the lump-sum payment divided by the relative's
life expectancy. The amount of support you pro-
vide also includes any other amounts you provi-
ded during the year.
Total Support
To figure if you provided more than half of a
person's support, you must first determine the
total support provided for that person. Total
support includes amounts spent to provide
food, lodging, clothing, education, medical and
dental care, recreation, transportation, and sim-
ilar necessities.
Generally, the amount of an item of support
is the amount of the expense incurred in provid-
ing that item. For lodging, the amount of support
is the fair rental value of the lodging.
Expenses not directly related to any one
member of a household, such as the cost of
food for the household, must be divided among
the members of the household.
Example 1. Grace Brown, mother of Mary
Miller, lives with Frank and Mary Miller and their
two children. Grace gets social security benefits
of $2,400, which she spends for clothing, trans-
portation, and recreation. Grace has no other
income. Frank and Mary's total food expense
for the household is $5,200. They pay Grace's
medical and drug expenses of $1,200. The fair
rental value of the lodging provided for Grace is
$1,800 a year, based on the cost of similar
rooming facilities. Figure Grace's total support
as follows.
Fair rental value of lodging . . . . . . . . $ 1,800
Clothing, transportation, and
recreation . . . . . . . . . . . . . . . . . 2,400
Medical expenses . . . . . . . . . . . . . 1,200
Share of food (1/5 of $5,200) . . . . . . . 1,040
Total support . . . . . . . . . . . . . . . $6,440
The support Frank and Mary provide,
$4,040 ($1,800 lodging + $1,200 medical ex-
penses + $1,040 food), is more than half of
Grace's $6,440 total support.
Example 2. Your parents live with you, your
spouse, and your two children in a house you
own. The fair rental value of your parents' share
of the lodging is $2,000 a year ($1,000 each),
which includes furnishings and utilities. Your fa-
ther receives a nontaxable pension of $4,200,
which he spends equally between your mother
and himself for items of support such as cloth-
ing, transportation, and recreation. Your total
food expense for the household is $6,000. Your
heat and utility bills amount to $1,200. Your
mother has hospital and medical expenses of
$600, which you pay during the year. Figure
your parents' total support as follows.
Support provided Father Mother
Fair rental value of lodging . . . $1,000 $1,000
Pension spent for their
support . . . . . . . . . . . . . 2,100 2,100
Share of food (1/6 of
$6,000) . . . . . . . . . . . . 1,000 1,000
Medical expenses for
mother . . . . . . . . . . . . . 600
Parents' total support . . . . $4,100 $4,700
Chapter 3 Dependents Page 35
You must apply the support test separately
to each parent. You provide $2,000 ($1,000
lodging + $1,000 food) of your father's total sup-
port of $4,100—less than half. You provide
$2,600 to your mother ($1,000 lodging + $1,000
food + $600 medical)—more than half of her to-
tal support of $4,700. You meet the support test
for your mother, but not your father. Heat and
utility costs are included in the fair rental value
of the lodging, so these aren't considered sepa-
rately.
Lodging. If you provide a person with lodging,
you are considered to provide support equal to
the fair rental value of the room, apartment,
house, or other shelter in which the person
lives. Fair rental value includes a reasonable al-
lowance for the use of furniture and appliances,
and for heat and other utilities that are provided.
Fair rental value defined. Fair rental value
is the amount you could reasonably expect to
receive from a stranger for the same kind of
lodging. It is used instead of actual expenses
such as taxes, interest, depreciation, paint, in-
surance, utilities, and the cost of furniture and
appliances. In some cases, fair rental value
may be equal to the rent paid.
If you provide the total lodging, the amount
of support you provide is the fair rental value of
the room the person uses, or a share of the fair
rental value of the entire dwelling if the person
has use of your entire home. If you don’t pro-
vide the total lodging, the total fair rental value
must be divided depending on how much of the
total lodging you provide. If you provide only a
part and the person supplies the rest, the fair
rental value must be divided between both of
you according to the amount each provides.
Example. Your parents live rent free in a
house you own. It has a fair rental value of
$5,400 a year furnished, which includes a fair
rental value of $3,600 for the house and $1,800
for the furniture. This doesn't include heat and
utilities. The house is completely furnished with
furniture belonging to your parents. You pay
$600 for their utility bills. Utilities usually aren't
included in rent for houses in the area where
your parents live. Therefore, you consider the
total fair rental value of the lodging to be $6,000
($3,600 fair rental value of the unfurnished
house + $1,800 allowance for the furnishings
provided by your parents + $600 cost of utilities)
of which you are considered to provide $4,200
($3,600 + $600).
Person living in his or her own home.
The total fair rental value of a person's home
that he or she owns is considered support con-
tributed by that person.
Living with someone rent free. If you live
with a person rent free in his or her home, you
must reduce the amount you provide for sup-
port of that person by the fair rental value of
lodging he or she provides you.
Property. Property provided as support is
measured by its fair market value. Fair market
value is the price that property would sell for on
the open market. It is the price that would be
agreed upon between a willing buyer and a will-
ing seller, with neither being required to act, and
both having reasonable knowledge of the rele-
vant facts.
Capital expenses. Capital items, such as
furniture, appliances, and cars, bought for a
person during the year can be included in total
support under certain circumstances.
The following examples show when a capi-
tal item is or isn't support.
Example 1. You buy a $200 power lawn
mower for your 13-year-old child. The child is
given the duty of keeping the lawn trimmed. Be-
cause the lawn mower benefits all members of
the household, don’t include the cost of the
lawn mower in the support of your child.
Example 2. You buy a $150 television set
as a birthday present for your 12-year-old child.
The television set is placed in your child's bed-
room. You can include the cost of the television
set in the support of your child.
Example 3. You pay $5,000 for a car and
register it in your name. You and your
17-year-old daughter use the car equally. Be-
cause you own the car and don’t give it to your
daughter but merely let her use it, don’t include
the cost of the car in your daughter's total sup-
port. However, you can include in your daugh-
ter's support your out-of-pocket expenses of
operating the car for her benefit.
Example 4. Your 17-year-old son, using
personal funds, buys a car for $4,500. You pro-
vide the rest of your son's support, $4,000. Be-
cause the car is bought and owned by your son,
the car's fair market value ($4,500) must be in-
cluded in his support. Your son has provided
more than half of his own total support of
$8,500 ($4,500 + $4,000), so he isn't your quali-
fying child. You didn't provide more than half of
his total support, so he isn't your qualifying rela-
tive. You can’t claim your son as a dependent.
Medical insurance premiums. Medical insur-
ance premiums you pay, including premiums for
supplementary Medicare coverage, are inclu-
ded in the support you provide.
Medical insurance benefits. Medical in-
surance benefits, including basic and supple-
mentary Medicare benefits, aren't part of sup-
port.
Tuition payments and allowances under the
GI Bill. Amounts veterans receive under the GI
Bill for tuition payments and allowances while
they attend school are included in total support.
Example. During the year, your son re-
ceives $2,200 from the government under the
GI Bill. He uses this amount for his education.
You provide the rest of his support, $2,000. Be-
cause GI benefits are included in total support,
your son's total support is $4,200 ($2,200 +
$2,000). You haven't provided more than half of
his support.
Child care expenses. If you pay someone to
provide child or dependent care, you can in-
clude these payments in the amount you provi-
ded for the support of your child or disabled de-
pendent, even if you claim a credit for the
payments. For information on the credit, see
Pub. 503, Child and Dependent Care Expen-
ses.
Other support items. Other items may be
considered as support depending on the facts
in each case.
Don’t Include in Total Support
The following items aren't included in total sup-
port.
1. Federal, state, and local income taxes
paid by persons from their own income.
2. Social security and Medicare taxes paid
by persons from their own income.
3. Life insurance premiums.
4. Funeral expenses.
5. Scholarships received by your child if your
child is a student.
6. Survivors' and Dependents' Educational
Assistance payments used for the support
of the child who receives them.
Multiple Support Agreement
Sometimes no one provides more than half of
the support of a person. Instead, two or more
persons, each of whom would be able to claim
the person as a dependent but for the support
test, together provide more than half of the per-
son's support.
When this happens, you can agree that any
one of you who individually provides more than
10% of the person's support, but only one, can
claim the person as a dependent. Each of the
others must sign a statement agreeing not to
claim the person as a dependent for that year.
The person who claims the person as a de-
pendent must keep these signed statements for
his or her records. A multiple support declara-
tion identifying each of the others who agreed
not to claim the person as a dependent must be
attached to the return of the person claiming the
person as a dependent. Form 2120 can be
used for this purpose.
You can claim someone as a dependent un-
der a multiple support agreement for someone
related to you or for someone who lived with
you all year as a member of your household.
Example 1. You, your sister, and your two
brothers provide the entire support of your
mother for the year. You provide 45%, your sis-
ter 35%, and your two brothers each provide
10%. Either you or your sister can claim your
mother as a dependent. The other must sign a
statement agreeing not to claim your mother as
a dependent. The one who claims your mother
as a dependent must attach Form 2120, or a
similar declaration, to his or her return and must
keep the statement signed by the other for his
or her records. Because neither brother pro-
vides more than 10% of the support, neither can
claim your mother as a dependent and neither
has to sign a statement.
Example 2. You and your brother each pro-
vide 20% of your mother's support for the year.
The remaining 60% of her support is provided
equally by two persons who aren't related to
her. She doesn't live with them. Because more
than half of her support is provided by persons
who can’t claim her as a dependent, no one can
claim her as a dependent.
Page 36 Chapter 3 Dependents
Example 3. Your father lives with you and
receives 25% of his support from social secur-
ity, 40% from you, 24% from his brother (your
uncle), and 11% from a friend. Either you or
your uncle can claim your father as a depend-
ent if the other signs a statement agreeing not
to. The one who claims your father as a de-
pendent must attach Form 2120, or a similar
declaration, to his return and must keep for his
records the signed statement from the one
agreeing not to claim your father as a depend-
ent.
Support Test for Children of
Divorced or Separated Parents (or
Parents Who Live Apart)
In most cases, a child of divorced or separated
parents (or parents who live apart) will be a
qualifying child of one of the parents. See Chil-
dren of divorced or separated parents (or pa-
rents who live apart) under Qualifying Child,
earlier. However, if the child doesn't meet the
requirements to be a qualifying child of either
parent, the child may be a qualifying relative of
one of the parents. If you think this might apply
to you, see Pub. 501.
Social Security
Numbers for
Dependents
You must show the social security number
(SSN) of any dependent you list in the Depend-
ents section of your Form 1040 or 1040-SR.
If you don’t show the dependent's SSN
when required, or if you show an incor-
rect SSN, certain tax benefits may be
disallowed.
No SSN. If a person whom you expect to claim
as a dependent on your return doesn't have an
SSN, either you or that person should apply for
an SSN as soon as possible by filing Form
SS-5, Application for a Social Security Card,
with the Social Security Administration (SSA).
You can get Form SS-5 online at SSA.gov/
forms/ss-5.pdf or at your local SSA office.
It usually takes about 2 weeks to get an SSN
once the SSA has all the information it needs. If
you don’t have a required SSN by the filing due
date, you can file Form 4868 for an extension of
time to file.
Born and died in 2021. If your child was
born and died in 2021, and you don’t have an
SSN for the child, you may attach a copy of the
child's birth certificate, death certificate, or hos-
pital records instead. The document must show
the child was born alive. If you do this, enter
“DIED” in column (2) of the Dependents section
of your Form 1040 or 1040-SR.
Alien or adoptee with no SSN. If your de-
pendent doesn't have and can’t get an SSN,
you must list the individual taxpayer identifica-
tion number (ITIN) or adoption taxpayer identifi-
cation number (ATIN) instead of an SSN.
Taxpayer identification numbers for ali-
ens. If your dependent is a resident or nonresi-
dent alien who doesn't have and isn't eligible to
get an SSN, your dependent must apply for anCAUTION
!
individual taxpayer identification number (ITIN).
For details on how to apply, see Form W-7, Ap-
plication for IRS Individual Taxpayer Identifica-
tion Number.
Taxpayer identification numbers for
adoptees. If you have a child who was placed
with you by an authorized placement agency,
you may be able to claim the child as a depend-
ent. However, if you can’t get an SSN or an ITIN
for the child, you must get an adoption taxpayer
identification number (ATIN) for the child from
the IRS. See Form W-7A, Application for Tax-
payer Identification Number for Pending U.S.
Adoptions, for details.
4.
Tax Withholding
and Estimated
Tax
What's New for 2022
Tax law changes for 2022. When you figure
how much income tax you want withheld from
your pay and when you figure your estimated
tax, consider tax law changes effective in 2022.
For more information, see Pub. 505, Tax With-
holding and Estimated Tax.
Reminders
Estimated tax safe harbor for higher in-
come taxpayers. If your 2021 adjusted gross
income was more than $150,000 ($75,000 if
you are married filing a separate return), you
must pay the smaller of 90% of your expected
tax for 2022 or 110% of the tax shown on your
2021 return to avoid an estimated tax penalty.
Introduction
This chapter discusses how to pay your tax as
you earn or receive income during the year. In
general, the federal income tax is a
pay-as-you-go tax. There are two ways to pay
as you go.
• Withholding. If you are an employee, your
employer probably withholds income tax
from your pay. Tax may also be withheld
from certain other income, such as pen-
sions, bonuses, commissions, and gam-
bling winnings. The amount withheld is
paid to the IRS in your name.
• Estimated tax. If you don't pay your tax
through withholding, or don't pay enough
tax that way, you may have to pay estima-
ted tax. People who are in business for
themselves will generally have to pay their
tax this way. Also, you may have to pay es-
timated tax if you receive income such as
dividends, interest, capital gains, rent, and
royalties. Estimated tax is used to pay not
only income tax, but self-employment tax
and alternative minimum tax as well.
This chapter explains these methods. In ad-
dition, it also explains the following.
• Credit for withholding and estimated
tax. When you file your 2021 income tax
return, take credit for all the income tax
withheld from your salary, wages, pen-
sions, etc., and for the estimated tax you
paid for 2021. Also take credit for any ex-
cess social security or railroad retirement
tax withheld. See Pub. 505.
• Underpayment penalty. If you didn't pay
enough tax during the year, either through
withholding or by making estimated tax
payments, you may have to pay a penalty.
In most cases, the IRS can figure this pen-
alty for you. See Underpayment Penalty for
2021 at the end of this chapter.
Useful Items
You may want to see:
Publication
505 Tax Withholding and Estimated Tax
Form (and Instructions)
W-4 Employee's Withholding Certificate
W-4P Withholding Certificate for Periodic
Pension or Annuity Payments
W-4S Request for Federal Income Tax
Withholding From Sick Pay
W-4V Voluntary Withholding Request
1040-ES Estimated Tax for Individuals
2210 Underpayment of Estimated Tax by
Individuals, Estates, and Trusts
2210-F Underpayment of Estimated Tax
by Farmers and Fishermen
Tax Withholding
for 2022
This section discusses income tax withholding
on:
• Salaries and wages,
• Tips,
• Taxable fringe benefits,
• Sick pay,
• Pensions and annuities,
• Gambling winnings,
• Unemployment compensation, and
• Certain federal payments.
This section explains the rules for withholding
tax from each of these types of income.
This section also covers backup withholding
on interest, dividends, and other payments.
W-4
W-4P
W-4S
W-4V
1040-ES
2210
2210-F
Chapter 4 Tax Withholding and Estimated Tax Page 37
Salaries and Wages
Income tax is withheld from the pay of most em-
ployees. Your pay includes your regular pay,
bonuses, commissions, and vacation allowan-
ces. It also includes reimbursements and other
expense allowances paid under a nonaccounta-
ble plan. See Supplemental Wages, later, for
more information about reimbursements and al-
lowances paid under a nonaccountable plan.
If your income is low enough that you won't
have to pay income tax for the year, you may be
exempt from withholding. This is explained un-
der Exemption From Withholding, later.
You can ask your employer to withhold in-
come tax from noncash wages and other wages
not subject to withholding. If your employer
doesn't agree to withhold tax, or if not enough is
withheld, you may have to pay estimated tax, as
discussed later under Estimated Tax for 2022.
Military retirees. Military retirement pay is
treated in the same manner as regular pay for
income tax withholding purposes, even though
it is treated as a pension or annuity for other tax
purposes.
Household workers. If you are a household
worker, you can ask your employer to withhold
income tax from your pay. A household worker
is an employee who performs household work
in a private home, local college club, or local
fraternity or sorority chapter.
Tax is withheld only if you want it withheld
and your employer agrees to withhold it. If you
don't have enough income tax withheld, you
may have to pay estimated tax, as discussed
later under Estimated Tax for 2022.
Farmworkers. Generally, income tax is with-
held from your cash wages for work on a farm
unless your employer does both of these:
• Pays you cash wages of less than $150
during the year, and
• Has expenditures for agricultural labor to-
taling less than $2,500 during the year.
Differential wage payments. When employ-
ees are on leave from employment for military
duty, some employers make up the difference
between the military pay and civilian pay. Pay-
ments to an employee who is on active duty for
a period of more than 30 days will be subject to
income tax withholding, but not subject to social
security, Medicare, or federal unemployment
(FUTA) tax withholding. The wages and with-
holding will be reported on Form W-2, Wage
and Tax Statement.
Determining Amount of Tax
Withheld Using Form W-4
The amount of income tax your employer with-
holds from your regular pay depends on two
things.
• The amount you earn in each payroll pe-
riod.
• The information you give your employer on
Form W-4.
Form W-4 includes steps to help you figure
your withholding. Complete Steps 2 through 4
only if they apply to you.
• Step 1. Enter your personal information in-
cluding your filing status.
• Step 2. Complete this step if you have
more than one job at the same time or are
married filing jointly and you and your
spouse both work.
• Step 3. Complete this step if you claim de-
pendents and other credits.
• Step 4. Complete this optional step to
make other adjustments.
*Other income
*Deductions
*Extra withholding
New Job
When you start a new job, you must fill out Form
W-4 and give it to your employer. Your em-
ployer should have copies of the form. If you
need to change the information later, you must
fill out a new form.
If you work only part of the year (for exam-
ple, you start working after the beginning of the
year), too much tax may be withheld. You may
be able to avoid overwithholding if your em-
ployer agrees to use the part-year method. See
Part-Year Method in chapter 1 of Pub. 505 for
more information.
Employee also receiving pension income.
If you receive pension or annuity income and
begin a new job, you will need to file Form W-4
with your new employer. However, you can
choose to split your withholding between your
pension and job in any manner.
Changing Your Withholding
During the year, changes may occur to your
marital status, adjustments, deductions, or
credits you expect to claim on your tax return.
When this happens, you may need to give your
employer a new Form W-4 to change your with-
holding status.
If a change in personal circumstances re-
duces the amount of withholding you are enti-
tled to claim, you are required to give your em-
ployer a new Form W-4 within 10 days after the
change occurs.
Changing your withholding for 2023. If
events in 2022 will change the amount of with-
holding you should claim for 2023, you must
give your employer a new Form W-4 by Decem-
ber 1, 2022. If the event occurs in December
2022, submit a new Form W-4 within 10 days.
Checking Your Withholding
After you have given your employer a Form
W-4, you can check to see whether the amount
of tax withheld from your pay is too little or too
much. If too much or too little tax is being with-
held, you should give your employer a new
Form W-4 to change your withholding. You
should try to have your withholding match your
actual tax liability. If not enough tax is withheld,
you will owe tax at the end of the year and may
have to pay interest and a penalty. If too much
tax is withheld, you will lose the use of that
money until you get your refund. Always check
your withholding if there are personal or finan-
cial changes in your life or changes in the law
that might change your tax liability.
Note. You can’t give your employer a pay-
ment to cover withholding on salaries and wa-
ges for past pay periods or a payment for esti-
mated tax.
Completing Form W-4 and
Worksheets
Form W-4 has worksheets to help you figure the
correct amount of withholding you can claim.
The worksheets are for your own records. Don't
give them to your employer.
Multiple Jobs Worksheet. If you have income
from more than one job at the same time, or are
married filing jointly and you and your spouse
both work, complete the Multiple Jobs Work-
sheet on the Form W-4.
If you and your spouse expect to file sepa-
rate returns, figure your withholding using sepa-
rate worksheets based on your own individual
income, adjustments, deductions, and credits.
Deductions Worksheet. Use the Deductions
Worksheet on Form W-4 if you plan to itemize
deductions or claim certain adjustments to in-
come and you want to reduce your withholding.
Also complete this worksheet when you have
changes to these items to see if you need to
change your withholding.
Getting the Right Amount of Tax
Withheld
In most situations, the tax withheld from your
pay will be close to the tax you figure on your
return if you follow these two rules.
• You accurately complete all the Form W-4
worksheets that apply to you.
• You give your employer a new Form W-4
when changes occur.
But because the worksheets and withhold-
ing methods don't account for all possible situa-
tions, you may not be getting the right amount
withheld. This is most likely to happen in the fol-
lowing situations.
• You are married and both you and your
spouse work.
• You have more than one job at a time.
• You have nonwage income, such as inter-
est, dividends, alimony, unemployment
compensation, or self-employment in-
come.
• You will owe additional amounts with your
return, such as self-employment tax.
• Your withholding is based on obsolete
Form W-4 information for a substantial part
of the year.
• You work only part of the year.
• You change the amount of your withhold-
ing during the year.
• You are subject to Additional Medicare Tax
or Net Investment Income Tax (NIIT). If you
anticipate liability for Additional Medicare
Page 38 Chapter 4 Tax Withholding and Estimated Tax
Tax or NIIT, you may request that your em-
ployer withhold an additional amount of in-
come tax withholding on Form W-4.
Cumulative wage method. If you change the
amount of your withholding during the year, too
much or too little tax may have been withheld
for the period before you made the change. You
may be able to compensate for this if your em-
ployer agrees to use the cumulative wage with-
holding method for the rest of the year. You
must ask your employer in writing to use this
method.
To be eligible, you must have been paid for
the same kind of payroll period (weekly, bi-
weekly, etc.) since the beginning of the year.
Publication 505
To make sure you are getting the right amount
of tax withheld, get Pub. 505. It will help you
compare the total tax to be withheld during the
year with the tax you can expect to figure on
your return. It will also help you determine how
much, if any, additional withholding is needed
each payday to avoid owing tax when you file
your return. If you don't have enough tax with-
held, you may have to pay estimated tax, as ex-
plained under Estimated Tax for 2022, later.
You can use the Tax Withholding Esti-
mator at IRS.gov/W4App, instead of
Pub. 505 or the worksheets included
with Form W-4, to determine whether you need
to have your withholding increased or de-
creased.
Rules Your Employer Must Follow
It may be helpful for you to know some of the
withholding rules your employer must follow.
These rules can affect how to fill out your Form
W-4 and how to handle problems that may
arise.
New Form W-4. When you start a new job,
your employer should have you complete a
Form W-4. Beginning with your first payday,
your employer will use the information you give
on the form to figure your withholding.
If you later fill out a new Form W-4, your em-
ployer can put it into effect as soon as possible.
The deadline for putting it into effect is the start
of the first payroll period ending 30 or more
days after you turn it in.
No Form W-4. If you don't give your employer
a completed Form W-4, your employer must
withhold at the highest rate, as if you were sin-
gle.
Repaying withheld tax. If you find you are
having too much tax withheld because you
didn't claim the correct amount of withholding
you are entitled to, you should give your em-
ployer a new Form W-4. Your employer can’t re-
pay any of the tax previously withheld. Instead,
claim the full amount withheld when you file
your tax return.
However, if your employer has withheld
more than the correct amount of tax for the
Form W-4 you have in effect, you don't have to
fill out a new Form W-4 to have your withholding
lowered to the correct amount. Your employer
can repay the amount that was withheldTIP
incorrectly. If you aren’t repaid, your Form W-2
will reflect the full amount actually withheld,
which you would claim when you file your tax
return.
Exemption From Withholding
If you claim exemption from withholding, your
employer won't withhold federal income tax
from your wages. The exemption applies only to
income tax, not to social security, Medicare, or
FUTA tax withholding.
You can claim exemption from withholding
for 2022 only if both of the following situations
apply.
• For 2021, you had a right to a refund of all
federal income tax withheld because you
had no tax liability.
• For 2022, you expect a refund of all federal
income tax withheld because you expect to
have no tax liability.
Students. If you are a student, you aren’t auto-
matically exempt. See chapter 1 to find out if
you must file a return. If you work only part time
or only during the summer, you may qualify for
exemption from withholding.
Age 65 or older or blind. If you are 65 or
older or blind, use Worksheet 1-1 or 1-2 in
chapter 1 of Pub. 505 to help you decide if you
qualify for exemption from withholding. Don't
use either worksheet if you will itemize deduc-
tions or claim tax credits on your 2022 return.
Instead, see Itemizing deductions or claiming
credits in chapter 1 of Pub. 505.
Claiming exemption from withholding. To
claim exemption, you must give your employer
a Form W-4. Write “Exempt” on the form in the
space below Step 4(c) and complete the appli-
cable steps of the form.
If you claim exemption, but later your situa-
tion changes so that you will have to pay in-
come tax after all, you must file a new Form
W-4 within 10 days after the change. If you
claim exemption in 2022, but you expect to owe
income tax for 2023, you must file a new Form
W-4 by December 1, 2022.
Your claim of exempt status may be re-
viewed by the IRS.
An exemption is good for only 1 year.
You must give your employer a new Form W-4
by February 15 each year to continue your ex-
emption.
Supplemental Wages
Supplemental wages include bonuses, commis-
sions, overtime pay, vacation allowances, cer-
tain sick pay, and expense allowances under
certain plans. The payer can figure withholding
on supplemental wages using the same method
used for your regular wages. However, if these
payments are identified separately from your
regular wages, your employer or other payer of
supplemental wages can withhold income tax
from these wages at a flat rate.
Expense allowances. Reimbursements or
other expense allowances paid by your em-
ployer under a nonaccountable plan are treated
as supplemental wages.
Reimbursements or other expense allowan-
ces paid under an accountable plan that are
more than your proven expenses are treated as
paid under a nonaccountable plan if you don't
return the excess payments within a reasonable
period of time.
For more information about accountable and
nonaccountable expense allowance plans, see
Pub. 505.
Penalties
You may have to pay a penalty of $500 if both
of the following apply.
• You make statements or claim withholding
on your Form W-4 that reduce the amount
of tax withheld.
• You have no reasonable basis for those
statements or withholding at the time you
prepare your Form W-4.
There is also a criminal penalty for willfully
supplying false or fraudulent information on
your Form W-4 or for willfully failing to supply in-
formation that would increase the amount with-
held. The penalty upon conviction can be either
a fine of up to $1,000 or imprisonment for up to
1 year, or both.
These penalties will apply if you deliberately
and knowingly falsify your Form W-4 in an at-
tempt to reduce or eliminate the proper with-
holding of taxes. A simple error or an honest
mistake won't result in one of these penalties.
Tips
The tips you receive while working on your job
are considered part of your pay. You must in-
clude your tips on your tax return on the same
line as your regular pay. However, tax isn't with-
held directly from tip income, as it is from your
regular pay. Nevertheless, your employer will
take into account the tips you report when figur-
ing how much to withhold from your regular pay.
For more information on reporting your tips
to your employer and on the withholding rules
for tip income, see Pub. 531, Reporting Tip In-
come.
How employer figures amount to withhold.
The tips you report to your employer are coun-
ted as part of your income for the month you re-
port them. Your employer can figure your with-
holding in either of two ways.
• By withholding at the regular rate on the
sum of your pay plus your reported tips.
• By withholding at the regular rate on your
pay plus a percentage of your reported
tips.
Not enough pay to cover taxes. If your regu-
lar pay isn't enough for your employer to with-
hold all the tax (including income tax and social
security and Medicare taxes (or the equivalent
railroad retirement tax)) due on your pay plus
your tips, you can give your employer money to
cover the shortage. See Pub. 531 for more in-
formation.
Allocated tips. Your employer shouldn't with-
hold income tax, Medicare tax, social security
tax, or railroad retirement tax on any allocated
tips. Withholding is based only on your pay plus
your reported tips. Your employer should refund
Chapter 4 Tax Withholding and Estimated Tax Page 39
to you any incorrectly withheld tax. See Pub.
531 for more information.
Taxable Fringe Benefits
The value of certain noncash fringe benefits you
receive from your employer is considered part
of your pay. Your employer must generally with-
hold income tax on these benefits from your
regular pay.
For information on fringe benefits, see
Fringe Benefits under Employee Compensation
in chapter 5.
Although the value of your personal use of
an employer-provided car, truck, or other high-
way motor vehicle is taxable, your employer can
choose not to withhold income tax on that
amount. Your employer must notify you if this
choice is made.
For more information on withholding on tax-
able fringe benefits, see chapter 1 of Pub. 505.
Sick Pay
Sick pay is a payment to you to replace your
regular wages while you are temporarily absent
from work due to sickness or personal injury. To
qualify as sick pay, it must be paid under a plan
to which your employer is a party.
If you receive sick pay from your employer
or an agent of your employer, income tax must
be withheld. An agent who doesn't pay regular
wages to you may choose to withhold income
tax at a flat rate.
However, if you receive sick pay from a third
party who isn't acting as an agent of your em-
ployer, income tax will be withheld only if you
choose to have it withheld. See Form W-4S,
later.
If you receive payments under a plan in
which your employer doesn't participate (such
as an accident or health plan where you paid all
the premiums), the payments aren’t sick pay
and usually aren’t taxable.
Union agreements. If you receive sick pay un-
der a collective bargaining agreement between
your union and your employer, the agreement
may determine the amount of income tax with-
holding. See your union representative or your
employer for more information.
Form W-4S. If you choose to have income tax
withheld from sick pay paid by a third party,
such as an insurance company, you must fill out
Form W-4S. Its instructions contain a worksheet
you can use to figure the amount you want with-
held. They also explain restrictions that may ap-
ply.
Give the completed form to the payer of your
sick pay. The payer must withhold according to
your directions on the form.
Estimated tax. If you don't request withholding
on Form W-4S, or if you don't have enough tax
withheld, you may have to make estimated tax
payments. If you don't pay enough tax, either
through estimated tax or withholding, or a com-
bination of both, you may have to pay a penalty.
See Underpayment Penalty for 2021 at the end
of this chapter.
Pensions and Annuities
Income tax will usually be withheld from your
pension or annuity distributions unless you
choose not to have it withheld. This rule applies
to distributions from:
• A traditional individual retirement arrange-
ment (IRA);
• A life insurance company under an endow-
ment, annuity, or life insurance contract;
• A pension, annuity, or profit-sharing plan;
• A stock bonus plan; and
• Any other plan that defers the time you re-
ceive compensation.
The amount withheld depends on whether
you receive payments spread out over more
than 1 year (periodic payments), within 1 year
(nonperiodic payments), or as an eligible roll-
over distribution (ERD). Income tax withholding
from an ERD is mandatory.
More information. For more information on
withholding on pensions and annuities, includ-
ing a discussion of Form W-4P, see Pensions
and Annuities in chapter 1 of Pub. 505.
Gambling Winnings
Income tax is withheld at a flat 24% rate from
certain kinds of gambling winnings.
Gambling winnings of more than $5,000
from the following sources are subject to in-
come tax withholding.
• Any sweepstakes; wagering pool, includ-
ing payments made to winners of poker
tournaments; or lottery.
• Any other wager, if the proceeds are at
least 300 times the amount of the bet.
It doesn't matter whether your winnings are paid
in cash, in property, or as an annuity. Winnings
not paid in cash are taken into account at their
fair market value.
Exception. Gambling winnings from bingo,
keno, and slot machines generally aren’t sub-
ject to income tax withholding. However, you
may need to provide the payer with a social se-
curity number to avoid withholding. See Backup
withholding on gambling winnings in chapter 1
of Pub. 505. If you receive gambling winnings
not subject to withholding, you may need to pay
estimated tax. See Estimated Tax for 2022,
later.
If you don't pay enough tax, either through
withholding or estimated tax, or a combination
of both, you may have to pay a penalty. See Un-
derpayment Penalty for 2021 at the end of this
chapter.
Form W-2G. If a payer withholds income tax
from your gambling winnings, you should re-
ceive a Form W-2G, Certain Gambling Win-
nings, showing the amount you won and the
amount withheld. Report the tax withheld on
Form 1040 or 1040-SR, line 25c.
Unemployment
Compensation
You can choose to have income tax withheld
from unemployment compensation. To make
this choice, fill out Form W-4V (or a similar form
provided by the payer) and give it to the payer.
All unemployment compensation is taxable.
If you don't have income tax withheld, you may
have to pay estimated tax. See Estimated Tax
for 2022, later.
If you don't pay enough tax, either through
withholding or estimated tax, or a combination
of both, you may have to pay a penalty. See Un-
derpayment Penalty for 2021 at the end of this
chapter.
Federal Payments
You can choose to have income tax withheld
from certain federal payments you receive.
These payments are the following.
1. Social security benefits.
2. Tier 1 railroad retirement benefits.
3. Commodity credit corporation loans you
choose to include in your gross income.
4. Payments under the Agricultural Act of
1949 (7 U.S.C. 1421 et seq.), as amen-
ded, or title II of the Disaster Assistance
Act of 1988, that are treated as insurance
proceeds and that you receive because:
a. Your crops were destroyed or dam-
aged by drought, flood, or any other
natural disaster; or
b. You were unable to plant crops be-
cause of a natural disaster described
in (a).
5. Any other payment under federal law as
determined by the Secretary.
To make this choice, fill out Form W-4V (or a
similar form provided by the payer) and give it
to the payer.
If you don't choose to have income tax with-
held, you may have to pay estimated tax. See
Estimated Tax for 2022, later.
If you don't pay enough tax, either through
withholding or estimated tax, or a combination
of both, you may have to pay a penalty. See Un-
derpayment Penalty for 2021 at the end of this
chapter.
More information. For more information about
the tax treatment of social security and railroad
retirement benefits, see chapter 7. Get Pub.
225, Farmer's Tax Guide, for information about
the tax treatment of commodity credit corpora-
tion loans or crop disaster payments.
Backup Withholding
Banks or other businesses that pay you certain
kinds of income must file an information return
(Form 1099) with the IRS. The information re-
turn shows how much you were paid during the
year. It also includes your name and taxpayer
identification number (TIN). TINs are explained
in chapter 1 under Social Security Number
(SSN).
Page 40 Chapter 4 Tax Withholding and Estimated Tax
These payments generally aren’t subject to
withholding. However, “backup” withholding is
required in certain situations. Backup withhold-
ing can apply to most kinds of payments that
are reported on Form 1099.
The payer must withhold at a flat 24% rate in
the following situations.
• You don't give the payer your TIN in the re-
quired manner.
• The IRS notifies the payer that the TIN you
gave is incorrect.
• You are required, but fail, to certify that you
aren’t subject to backup withholding.
• The IRS notifies the payer to start withhold-
ing on interest or dividends because you
have underreported interest or dividends
on your income tax return. The IRS will do
this only after it has mailed you four noti-
ces.
Go to IRS.gov/Businesses/Small-
Businesses-Self-Employed/Backup-
Withholding for more information on kinds of
payments subject to backup withholding.
Penalties. There are civil and criminal penal-
ties for giving false information to avoid backup
withholding. The civil penalty is $500. The crimi-
nal penalty, upon conviction, is a fine of up to
$1,000 or imprisonment of up to 1 year, or both.
Estimated Tax for 2022
Estimated tax is the method used to pay tax on
income that isn't subject to withholding. This in-
cludes income from self-employment, interest,
dividends, alimony, rent, gains from the sale of
assets, prizes, and awards. You may also have
to pay estimated tax if the amount of income tax
being withheld from your salary, pension, or
other income isn't enough.
Estimated tax is used to pay both income
tax and self-employment tax, as well as other
taxes and amounts reported on your tax return.
If you don't pay enough tax, either through with-
holding or estimated tax, or a combination of
both, you may have to pay a penalty. If you
don't pay enough by the due date of each pay-
ment period (see When To Pay Estimated Tax,
later), you may be charged a penalty even if you
are due a refund when you file your tax return.
For information on when the penalty applies,
see Underpayment Penalty for 2021 at the end
of this chapter.
Who Doesn't Have To Pay
Estimated Tax
If you receive salaries or wages, you can avoid
having to pay estimated tax by asking your em-
ployer to take more tax out of your earnings. To
do this, give a new Form W-4 to your employer.
See chapter 1 of Pub. 505.
Estimated tax not required. You don't have
to pay estimated tax for 2022 if you meet all
three of the following conditions.
• You had no tax liability for 2021.
• You were a U.S. citizen or resident alien for
the whole year.
• Your 2021 tax year covered a 12-month
period.
You had no tax liability for 2021 if your total
tax was zero or you didn't have to file an income
tax return. For the definition of “total tax” for
2021, see Pub. 505, chapter 2.
Who Must Pay Estimated
Tax
If you owe additional tax for 2021, you may
have to pay estimated tax for 2022.
You can use the following general rule as a
guide during the year to see if you will have
enough withholding, or if you should increase
your withholding or make estimated tax pay-
ments.
General rule. In most cases, you must pay es-
timated tax for 2022 if both of the following ap-
ply.
1. You expect to owe at least $1,000 in tax
for 2022, after subtracting your withholding
and refundable credits.
2. You expect your withholding plus your re-
fundable credits to be less than the
smaller of:
a. 90% of the tax to be shown on your
2022 tax return, or
b. 100% of the tax shown on your 2021
tax return (but see Special rules for
farmers, fishermen, and higher in-
come taxpayers, later). Your 2021 tax
return must cover all 12 months.
If the result from using the general rule
above suggests that you won't have
enough withholding, complete the
2022 Estimated Tax Worksheet in Pub. 505 for
a more accurate calculation.
Special rules for farmers, fishermen, and
higher income taxpayers. If at least
two-thirds of your gross income for tax year
2021 or 2022 is from farming or fishing, substi-
tute 662/3% for 90% in (2a) under the General
rule, earlier. If your AGI for 2021 was more than
$150,000 ($75,000 if your filing status for 2022
is married filing a separate return), substitute
110% for 100% in (2b) under General rule, ear-
lier. See Figure 4-A and Pub. 505, chapter 2, for
more information.
Aliens. Resident and nonresident aliens may
also have to pay estimated tax. Resident aliens
should follow the rules in this chapter unless no-
ted otherwise. Nonresident aliens should get
Form 1040-ES (NR), U.S. Estimated Tax for
Nonresident Alien Individuals.
You are an alien if you aren’t a citizen or na-
tional of the United States. You are a resident
alien if you either have a green card or meet the
substantial presence test. For more information
about the substantial presence test, see Pub.
519, U.S. Tax Guide for Aliens.
Married taxpayers. If you qualify to make joint
estimated tax payments, apply the rules dis-
cussed here to your joint estimated income.
You and your spouse can make joint estima-
ted tax payments even if you aren’t living to-
gether.CAUTION
!
However, you and your spouse can’t make
joint estimated tax payments if:
• You are legally separated under a decree
of divorce or separate maintenance,
• You and your spouse have different tax
years, or
• Either spouse is a nonresident alien (un-
less that spouse elected to be treated as a
resident alien for tax purposes (see chap-
ter 1 of Pub. 519)).
If you and your spouse can’t make estima-
ted tax payments, apply these rules to your sep-
arate estimated income. Making joint or sepa-
rate estimated tax payments won't affect your
choice of filing a joint tax return or separate re-
turns for 2022.
2021 separate returns and 2022 joint re-
turn. If you plan to file a joint return with your
spouse for 2022 but you filed separate returns
for 2021, your 2021 tax is the total of the tax
shown on your separate returns. You filed a
separate return if you filed as single, head of
household, or married filing separately.
2021 joint return and 2022 separate re-
turns. If you plan to file a separate return for
2022 but you filed a joint return for 2021, your
2021 tax is your share of the tax on the joint re-
turn. You file a separate return if you file as sin-
gle, head of household, or married filing sepa-
rately.
To figure your share of the tax on the joint
return, first figure the tax both you and your
spouse would have paid had you filed separate
returns for 2021 using the same filing status as
for 2022. Then, multiply the tax on the joint re-
turn by the following fraction.
The tax you would have paid had
you filed a separate return
The total tax you and your
spouse would have paid had
you filed separate returns
Example. Joe and Heather filed a joint re-
turn for 2021 showing taxable income of
$48,500 and a tax of $5,425. Of the $48,500
taxable income, $40,100 was Joe's and the rest
was Heather's. For 2022, they plan to file mar-
ried filing separately. Joe figures his share of
the tax on the 2021 joint return as follows.
Tax on $40,100 based on a
separate return . . . . . . . $4,616
Tax on $8,400 based on a
separate return . . . . . . . 843
Total . . . . . . . . . . . . . . . $5,459
Joe's percentage of total
($4,616 ÷ $5,459) . . . . . . 85%
Joe's share of tax on joint
return
($5,425 × 85%) . . . . . . . $4,611
How To Figure
Estimated Tax
To figure your estimated tax, you must figure
your expected adjusted gross income (AGI),
Chapter 4 Tax Withholding and Estimated Tax Page 41
taxable income, taxes, deductions, and credits
for the year.
When figuring your 2022 estimated tax, it
may be helpful to use your income, deductions,
and credits for 2021 as a starting point. Use
your 2021 federal tax return as a guide. You
can use Form 1040-ES and Pub. 505 to figure
your estimated tax. Nonresident aliens use
Form 1040-ES (NR) and Pub. 505 to figure esti-
mated tax (see chapter 8 of Pub. 519 for more
information).
You must make adjustments both for
changes in your own situation and for recent
changes in the tax law. For a discussion of
these changes, visit IRS.gov.
For more complete information on how to
figure your estimated tax for 2022, see chap-
ter 2 of Pub. 505.
When To Pay Estimated
Tax
For estimated tax purposes, the tax year is divi-
ded into four payment periods. Each period has
a specific payment due date. If you don't pay
enough tax by the due date of each payment
period, you may be charged a penalty even if
you are due a refund when you file your income
tax return. The payment periods and due dates
for estimated tax payments are shown next.
For the period: Due date:*
Jan. 1–March 31 . . . . . . April 18
April 1–May 31 . . . . . . . June 15
June 1–August 31 . . . . . Sept. 15
Sept. 1–Dec. 31 . . . . . . Jan. 17, next year .
*See Saturday, Sunday, holiday rule and
January payment.
Saturday, Sunday, holiday rule. If the due
date for an estimated tax payment falls on a
Saturday, Sunday, or legal holiday, the pay-
ment will be on time if you make it on the next
day that isn't a Saturday, Sunday, or legal holi-
day.
January payment. If you file your 2022 Form
1040 or 1040-SR by January 31, 2023, and pay
the rest of the tax you owe, you don't need to
make the payment due on January 17, 2023.
Fiscal year taxpayers. If your tax year doesn't
start on January 1, see the Form 1040-ES in-
structions for your payment due dates.
When To Start
You don't have to make estimated tax pay-
ments until you have income on which you will
owe income tax. If you have income subject to
estimated tax during the first payment period,
you must make your first payment by the due
date for the first payment period. You can pay
all your estimated tax at that time, or you can
pay it in installments. If you choose to pay in in-
stallments, make your first payment by the due
date for the first payment period. Make your re-
maining installment payments by the due dates
for the later periods.
No income subject to estimated tax during
first period. If you don't have income subject
to estimated tax until a later payment period,
you must make your first payment by the due
date for that period. You can pay your entire es-
timated tax by the due date for that period or
you can pay it in installments by the due date
for that period and the due dates for the remain-
ing periods.
General Due Dates for
Estimated Tax
Installment Payments
Table 4-1.
If you first
have income
on which you
must pay
estimated tax:
Make
installments
by:*
Make later
installments
by:*
Before April 1 April 15 June 15
Sept. 15
Jan. 15, next
year
April 1–May 31 June 15 Sept. 15
Jan. 15, next
year
June 1–Aug. 31 Sept. 15 Jan. 15, next
year
After Aug. 31 Jan. 15, next
year
(None)
*See Saturday, Sunday, holiday rule and January
payment.
How much to pay to avoid a penalty. To de-
termine how much you should pay by each pay-
ment due date, see How To Figure Each Pay-
ment next.
Figure 4-A. Do You Have To Pay Estimated Tax?Start Here
No
Yes
Yes
NoNo
Yes
Will you owe $1,000 or more
for 2022 after subtracting
income tax withholding and
refundable credits* from your
total tax? (Don’t subtract any
estimated tax payments.)
Will your income tax
withholding and refundable
credits* be at least 90%
(662/3% for farmers and
fishermen) of the tax shown on
your 2022 tax return?
Will your income tax
withholding and refundable
credits* be at least 100%** of
the tax shown on your 2021
tax return?
Note. Your 2021 return must
have covered a 12-month
period.
You are NOT required to pay
estimated tax.
*Use the refundable credits shown on the 2022 Estimated Tax Worksheet in Pub. 505.
**110% if less than two-thirds of your gross income for 2021 and 2022 is from farming or fishing and your 2021
adjusted gross income was more than $150,000 ($75,000 if your filing status for 2022 is married filing a separate return).
You MUST make estimated
tax payment(s) by the
required due date(s).
See When To Pay
Estimated Tax.
Page 42 Chapter 4 Tax Withholding and Estimated Tax
How To Figure
Each Payment
You should pay enough estimated tax by the
due date of each payment period to avoid a
penalty for that period. You can figure your re-
quired payment for each period by using either
the regular installment method or the annual-
ized income installment method. These meth-
ods are described in chapter 2 of Pub. 505. If
you don't pay enough during each payment pe-
riod, you may be charged a penalty even if you
are due a refund when you file your tax return.
If the earlier discussion of No income sub-
ject to estimated tax during first period or the
later discussion of Change in estimated tax ap-
plies to you, you may benefit from reading An-
nualized Income Installment Method in chap-
ter 2 of Pub. 505 for information on how to avoid
a penalty.
Underpayment penalty. Under the regular in-
stallment method, if your estimated tax payment
for any period is less than one-fourth of your es-
timated tax, you may be charged a penalty for
underpayment of estimated tax for that period
when you file your tax return. Under the annual-
ized income installment method, your estimated
tax payments vary with your income, but the
amount required must be paid each period. See
Instructions for Form 2210 for more information.
Change in estimated tax. After you make an
estimated tax payment, changes in your in-
come, adjustments, deductions, or credits may
make it necessary for you to refigure your esti-
mated tax. Pay the unpaid balance of your
amended estimated tax by the next payment
due date after the change or in installments by
that date and the due dates for the remaining
payment periods.
Estimated Tax Payments
Not Required
You don't have to pay estimated tax if your with-
holding in each payment period is at least as
much as:
• One-fourth of your required annual pay-
ment, or
• Your required annualized income install-
ment for that period.
You also don't have to pay estimated tax if you
will pay enough through withholding to keep the
amount you owe with your return under $1,000.
How To Pay Estimated Tax
There are several ways to pay estimated tax.
• Credit an overpayment on your 2021 return
to your 2022 estimated tax.
• Pay by direct transfer from your bank ac-
count, or pay by debit or credit card using
a pay-by-phone system or the Internet.
• Send in your payment (check or money or-
der) with a payment voucher from Form
1040-ES.
Credit an Overpayment
If you show an overpayment of tax after com-
pleting your Form 1040 or 1040-SR for 2021,
you can apply part or all of it to your estimated
tax for 2022. On line 36 of Form 1040 or
1040-SR, enter the amount you want credited
to your estimated tax rather than refunded.
Take the amount you have credited into ac-
count when figuring your estimated tax pay-
ments.
You can’t have any of the amount you credi-
ted to your estimated tax refunded to you until
you file your tax return for the following year.
You also can’t use that overpayment in any
other way.
Pay Online
The IRS offers an electronic payment option
that is right for you. Paying online is convenient,
secure, and helps make sure we get your pay-
ments on time. To pay your taxes online or for
more information, go to IRS.gov/Payments. You
can pay using any of the following methods.
• IRS Direct Pay. For online transfers di-
rectly from your checking or savings ac-
count at no cost to you, go to IRS.gov/
Payments.
• Pay by Card. To pay by debit or credit
card, go to IRS.gov/Payments. A conven-
ience fee is charged by these service pro-
viders.
• Electronic Funds Withdrawal (EFW).
This is an integrated e-file/e-pay option of-
fered only when filing your federal taxes
electronically using tax preparation soft-
ware, through a tax professional, or the
IRS at IRS.gov/Payments.
• Online Payment Agreement. If you can’t
pay in full by the due date of your tax re-
turn, you can apply for an online monthly
installment agreement at IRS.gov/
Payments. Once you complete the online
process, you will receive immediate notifi-
cation of whether your agreement has
been approved. A user fee is charged.
• IRS2GO. This is the mobile application of
the IRS. You can access Direct Pay or Pay
By Card by downloading the application.
Pay by Phone
Paying by phone is another safe and secure
method of paying electronically. Use one of the
following methods: (1) call one of the debit or
credit card providers, or (2) use the Electronic
Federal Tax Payment System (EFTPS).
Debit or credit card. Call one of our service
providers. Each charges a fee that varies by
provider, card type, and payment amount.
Link2Gov Corporation
888-PAY-1040TM (888-729-1040)
www.PAY1040.com
WorldPay US, Inc.
844-PAY-TAX-8TM (844-729-8298)
www.payUSAtax.com
ACI Payments, Inc. (Formerly Official
Payments)
888-272-9829
www.fed.acipayonline.com
EFTPS. To use EFTPS, you must be enrolled
either online or have an enrollment form mailed
to you. To make a payment using EFTPS, call
800-555-4477 (English) or 800-244-4829 (Es-
pañol). People who are deaf, hard of hearing, or
have a speech disability and who have access
to TTY/TDD equipment can call 800-733-4829.
For more information about EFTPS, go to
IRS.gov/Payments or www.EFTPS.gov.
Pay by Mobile Device
To pay through your mobile device, download
the IRS2Go application.
Pay by Cash
Cash is an in-person payment option for individ-
uals provided through retail partners with a
maximum of $1,000 per day per transaction. To
make a cash payment, you must first be regis-
tered online at www.fed.acipayonline.com, our
Official Payment provider.
Pay by Check or Money Order
Using the Estimated Tax
Payment Voucher
Before submitting a payment through the mail
using the estimated tax payment voucher,
please consider alternative methods. One of
our safe, quick, and easy electronic payment
options might be right for you.
If you choose to mail in your payment, each
payment of estimated tax by check or money
order must be accompanied by a payment
voucher from Form 1040-ES.
During 2021, if you:
• Made at least one estimated tax payment
but not by electronic means,
• Didn't use software or a paid preparer to
prepare or file your return,
then you should receive a copy of the 2022
Form 1040-ES with payment vouchers.
The enclosed payment vouchers will be pre-
printed with your name, address, and social se-
curity number. Using the preprinted vouchers
will speed processing, reduce the chance of er-
ror, and help save processing costs.
Use the window envelopes that came with
your Form 1040-ES package. If you use your
own envelopes, make sure you mail your pay-
ment vouchers to the address shown in the
Form 1040-ES instructions for the place where
you live.
No checks of $100 million or more accep-
ted. The IRS can’t accept a single check (in-
cluding a cashier’s check) for amounts of
$100,000,000 ($100 million) or more. If you are
sending $100 million or more by check, you’ll
need to spread the payment over two or more
checks with each check made out for an
amount less than $100 million. This limit doesn’t
apply to other methods of payment (such as
electronic payments). Please consider a
Chapter 4 Tax Withholding and Estimated Tax Page 43
method of payment other than check if the
amount of the payment is over $100 million.
Note. These criteria can change without no-
tice. If you don't receive a Form 1040-ES pack-
age and you are required to make an estimated
tax payment, you should go to IRS.gov/
Form1040ES and print a copy of Form 1040-ES
that includes four blank payment vouchers.
Complete one of these and make your payment
timely to avoid penalties for paying late.
Don't use the address shown in the In-
structions for Form 1040 for your esti-
mated tax payments.
If you didn't pay estimated tax last year, you
can order Form 1040-ES from the IRS (see the
inside back cover of this publication) or down-
load it from IRS.gov. Follow the instructions to
make sure you use the vouchers correctly.
Joint estimated tax payments. If you file a
joint return and are making joint estimated tax
payments, enter the names and social security
numbers on the payment voucher in the same
order as they will appear on the joint return.
Change of address. You must notify the IRS if
you are making estimated tax payments and
you changed your address during the year.
Complete Form 8822, Change of Address, and
mail it to the address shown in the instructions
for that form.
Credit for Withholding
and Estimated Tax
for 2021
When you file your 2021 income tax return, take
credit for all the income tax and excess social
security or railroad retirement tax withheld from
your salary, wages, pensions, etc. Also take
credit for the estimated tax you paid for 2021.
These credits are subtracted from your total tax.
Because these credits are refundable, you
should file a return and claim these credits,
even if you don't owe tax.
Two or more employers. If you had two or
more employers in 2021 and were paid wages
of more than $142,800, too much social secur-
ity or tier 1 railroad retirement tax may have
been withheld from your pay. You may be able
to claim the excess as a credit against your in-
come tax when you file your return. See the In-
structions for Form 1040 for more information.
Withholding
If you had income tax withheld during 2021, you
should be sent a statement by January 31,
2022, showing your income and the tax with-
held. Depending on the source of your income,
you should receive:
• Form W-2, Wage and Tax Statement;
• Form W-2G, Certain Gambling Winnings;
or
• A form in the 1099 series.
Forms W-2 and W-2G. If you file a paper re-
turn, always file Form W-2 with your income tax
return. File Form W-2G with your return only if itCAUTION
!
shows any federal income tax withheld from
your winnings.
You should get at least two copies of each
form. If you file a paper return, attach one copy
to the front of your federal income tax return.
Keep one copy for your records. You should
also receive copies to file with your state and lo-
cal returns.
Form W-2
Your employer is required to provide or send
Form W-2 to you no later than January 31,
2022. You should receive a separate Form W-2
from each employer you worked for.
If you stopped working before the end of
2021, your employer could have given you your
Form W-2 at any time after you stopped work-
ing. However, your employer must provide or
send it to you by January 31, 2022.
If you ask for the form, your employer must
send it to you within 30 days after receiving your
written request or within 30 days after your final
wage payment, whichever is later.
If you haven't received your Form W-2 by
January 31, you should ask your employer for it.
If you don't receive it by early February, call the
IRS.
Form W-2 shows your total pay and other
compensation and the income tax, social secur-
ity tax, and Medicare tax that was withheld dur-
ing the year. Include the federal income tax
withheld (as shown in box 2 of Form W-2) on
Form 1040 or 1040-SR, line 25a.
In addition, Form W-2 is used to report any
taxable sick pay you received and any income
tax withheld from your sick pay.
Form W-2G
If you had gambling winnings in 2021, the payer
may have withheld income tax. If tax was with-
held, the payer will give you a Form W-2G
showing the amount you won and the amount of
tax withheld.
Report the amounts you won on Schedule 1
(Form 1040). Take credit for the tax withheld on
Form 1040 or 1040-SR, line 25c.
The 1099 Series
Most forms in the 1099 series aren’t filed with
your return. These forms should be furnished to
you by January 31, 2022 (or, for Forms 1099-B,
1099-S, and certain Forms 1099-MISC, by Feb-
ruary 15, 2022). Unless instructed to file any of
these forms with your return, keep them for your
records. There are several different forms in this
series, which are not listed. See the instructions
for the specific Form 1099 for more information.
Form 1099-R. Attach Form 1099-R to your pa-
per return if box 4 shows federal income tax
withheld. Include the amount withheld in the to-
tal on line 25b of Form 1040 or 1040-SR.
Backup withholding. If you were subject to
backup withholding on income you received
during 2021, include the amount withheld, as
shown on your Form 1099, in the total on
line 25b of Form 1040 or 1040-SR.
Form Not Correct
If you receive a form with incorrect information
on it, you should ask the payer for a corrected
form. Call the telephone number or write to the
address given for the payer on the form. The
corrected Form W-2G or Form 1099 you re-
ceive will have an “X” in the “CORRECTED” box
at the top of the form. A special form, Form
W-2c, Corrected Wage and Tax Statement, is
used to correct a Form W-2.
In certain situations, you will receive two
forms in place of the original incorrect form.
This will happen when your taxpayer identifica-
tion number is wrong or missing, your name
and address are wrong, or you received the
wrong type of form (for example, a Form
1099-DIV, Dividends and Distributions, instead
of a Form 1099-INT, Interest Income). One new
form you receive will be the same incorrect form
or have the same incorrect information, but all
money amounts will be zero. This form will have
an “X” in the “CORRECTED” box at the top of
the form. The second new form should have all
the correct information, prepared as though it is
the original (the “CORRECTED” box won't be
checked).
Form Received After Filing
If you file your return and you later receive a
form for income that you didn't include on your
return, you should report the income and take
credit for any income tax withheld by filing Form
1040-X, Amended U.S. Individual Income Tax
Return.
Separate Returns
If you are married but file a separate return, you
can take credit only for the tax withheld from
your own income. Don't include any amount
withheld from your spouse's income. However,
different rules may apply if you live in a com-
munity property state.
Community property states are listed in
chapter 2. For more information on these rules,
and some exceptions, see Pub. 555, Commun-
ity Property.
Estimated Tax
Take credit for all your estimated tax payments
for 2021 on Form 1040 or 1040-SR, line 26. In-
clude any overpayment from 2020 that you had
credited to your 2021 estimated tax.
Name changed. If you changed your name,
and you made estimated tax payments using
your old name, attach a brief statement to the
front of your paper tax return indicating:
• When you made the payments,
• The amount of each payment,
• Your name when you made the payments,
and
• Your social security number.
The statement should cover payments you
made jointly with your spouse as well as any
you made separately.
Be sure to report the change to the Social
Security Administration. This prevents delays in
processing your return and issuing any refunds.
Page 44 Chapter 4 Tax Withholding and Estimated Tax
Separate Returns
If you and your spouse made separate estima-
ted tax payments for 2021 and you file separate
returns, you can take credit only for your own
payments.
If you made joint estimated tax payments,
you must decide how to divide the payments
between your returns. One of you can claim all
of the estimated tax paid and the other none, or
you can divide it in any other way you agree on.
If you can’t agree, you must divide the pay-
ments in proportion to each spouse's individual
tax as shown on your separate returns for 2021.
Divorced Taxpayers
If you made joint estimated tax payments for
2021, and you were divorced during the year,
either you or your former spouse can claim all of
the joint payments, or you each can claim part
of them. If you can’t agree on how to divide the
payments, you must divide them in proportion
to each spouse's individual tax as shown on
your separate returns for 2021.
If you claim any of the joint payments on
your tax return, enter your former spouse's so-
cial security number (SSN) in the space provi-
ded on the front of Form 1040 or 1040-SR. If
you divorced and remarried in 2021, enter your
present spouse's SSN in the space provided on
the front of Form 1040 or 1040-SR. Also, on the
dotted line next to line 26, enter your former
spouse’s SSN, followed by “DIV.”
Underpayment Penalty
for 2021
If you didn't pay enough tax, either through with-
holding or by making timely estimated tax pay-
ments, you will have an underpayment of esti-
mated tax and you may have to pay a penalty.
Generally, you won't have to pay a penalty
for 2021 if any of the following apply.
• The total of your withholding and estimated
tax payments was at least as much as your
2020 tax (or 110% of your 2020 tax if your
AGI was more than $150,000, $75,000 if
your 2021 filing status is married filing sep-
arately) and you paid all required estima-
ted tax payments on time;
• The tax balance due on your 2021 return is
no more than 10% of your total 2021 tax,
and you paid all required estimated tax
payments on time;
• Your total 2021 tax minus your withholding
and refundable credits is less than $1,000;
• You didn't have a tax liability for 2020 and
your 2020 tax year was 12 months; or
• You didn't have any withholding taxes and
your current year tax less any household
employment taxes is less than $1,000.
Farmers and fishermen. Special rules apply if
you are a farmer or fisherman. See the Instruc-
tions for Form 2210-F for more information.
IRS can figure the penalty for you. If you
think you owe the penalty but you don't want to
figure it yourself when you file your tax return,
you may not have to. Generally, the IRS will fig-
ure the penalty for you and send you a bill.
However, if you think you are able to lower or
eliminate your penalty, you must complete
Form 2210 or Form 2210-F and attach it to your
paper return. See Instructions for Form 2210 for
more information.
Chapter 4 Tax Withholding and Estimated Tax Page 45
Part Two.
Income and
Adjustments to
Income
The five chapters in this part discuss many kinds of income and
adjustments to income. They explain which income is and isn’t taxed and
discuss some of the adjustments to income that you can make in figuring
your adjusted gross income.
The Form 1040 and 1040-SR schedules that are discussed in these
chapters are:
• Schedule 1, Additional Income and Adjustments to Income;
• Schedule 2 (Part II), Other Taxes; and
• Schedule 3 (Part II), Other Payments and Refundable Credits.
Table V. Other Adjustments to Income
Use this table to find information about other adjustments to income not covered in this part of the publication.
IF you are looking for more information about the
deduction for...
THEN see...
contributions to a health savings account Pub. 969, Health Savings Accounts and Other Tax-Favored
Health Plans.
moving expenses Pub. 3, Armed Forces’ Tax Guide.
part of your self-employment tax chapter 11.
self-employed health insurance Pub. 502, Medical and Dental Expenses.
payments to self-employed SEP, SIMPLE, and qualified plans Pub. 560, Retirement Plans for Small Business.
penalty on the early withdrawal of savings chapter 6.
contributions to an Archer MSA Pub. 969.
reforestation amortization or expense chapters 7 and 8 of Pub. 535, Business Expenses.
contributions to Internal Revenue Code section 501(c)(18)(D)
pension plans
Pub. 525, Taxable and Nontaxable Income.
expenses from the rental of personal property chapter 8.
certain required repayments of supplemental unemployment
benefits (sub-pay)
chapter 8.
foreign housing costs chapter 4 of Pub. 54, Tax Guide for U.S. Citizens and Resident
Aliens Abroad.
jury duty pay given to your employer chapter 8.
contributions by certain ministers or chaplains to Internal
Revenue Code section 403(b) plans
Pub. 517, Social Security and Other Information for Members of
the Clergy and Religious Workers.
attorney fees and certain costs for actions involving IRS awards
to whistleblowers
Pub. 525.
Page 46 Chapter 4 Tax Withholding and Estimated Tax
5.
Wages, Salaries,
and Other
Earnings
Reminders
Deferred compensation contribution limit.
If you participate in a 401(k) plan, 403(b) plan,
or the federal government's Thrift Savings Plan,
the total annual amount you can contribute re-
mains at $19,500 for 2021. This also applies to
most 457 plans.
Introduction
This chapter discusses compensation received
for services as an employee, such as wages,
salaries, and fringe benefits. The following top-
ics are included.
• Bonuses and awards.
• Special rules for certain employees.
• Sickness and injury benefits.
The chapter explains what income is inclu-
ded and isn’t included in the employee's gross
income and what’s not included.
Useful Items
You may want to see:
Publication
463 Travel, Gift, and Car Expenses
502 Medical and Dental Expenses
524 Credit for the Elderly or the Disabled
525 Taxable and Nontaxable Income
526 Charitable Contributions
550 Investment Income and Expenses
554 Tax Guide for Seniors
575 Pension and Annuity Income
907 Tax Highlights for Persons With
Disabilities
926 Household Employer's Tax Guide
3920 Tax Relief for Victims of Terrorist
Attacks
For these and other useful items, go to IRS.gov/
Forms.
Employee
Compensation
This section discusses various types of em-
ployee compensation, including fringe benefits,
retirement plan contributions, stock options,
and restricted property.
3920
Form W-2. If you’re an employee, you should
receive a Form W-2 from your employer show-
ing the pay you received for your services. In-
clude your pay on line 1 of Form 1040 or
1040-SR, even if you don’t receive a Form W-2.
In some instances, your employer isn’t re-
quired to give you a Form W-2. Your employer
isn’t required to give you a Form W-2 if you per-
form household work in your employer's home
for less than $2,300 in cash wages during the
calendar year and you have no federal income
taxes withheld from your wages. Household
work is work done in or around an employer's
home. Some examples of workers who do
household work are:
• Babysitters,
• Caretakers,
• House cleaning workers,
• Domestic workers,
• Drivers,
• Health aides,
• Housekeepers,
• Maids,
• Nannies,
• Private nurses, and
• Yard workers.
See Schedule H (Form 1040), Household
Employment Taxes, and its instructions, and
Pub. 926 for more information.
If you performed services, other than as an
independent contractor, and your employer
didn’t withhold social security and Medicare
taxes from your pay, you must file Form 8919,
Uncollected Social Security and Medicare Tax
on Wages, with your Form 1040 or 1040-SR.
See Form 8919 and its instructions for more in-
formation on how to figure unreported wages
and taxes and how to include them on your in-
come tax return.
Childcare providers. If you provide childcare,
either in the child's home or in your home or
other place of business, the pay you receive
must be included in your income. If you aren’t
an employee, you’re probably self-employed
and must include payments for your services on
Schedule C (Form 1040), Profit or Loss From
Business. You generally aren’t an employee un-
less you’re subject to the will and control of the
person who employs you as to what you’re to
do and how you’re to do it.
Babysitting. If you’re paid to babysit, even
for relatives or neighborhood children, whether
on a regular basis or only periodically, the rules
for childcare providers apply to you.
Employment tax. Whether you're an em-
ployee or self-employed person, your income
could be subject to self-employment tax. See
the instructions for Schedules C and SE (Form
1040) if you're self-employed. Also, see Pub.
926 for more information.
Miscellaneous
Compensation
This section discusses different types of em-
ployee compensation.
Advance commissions and other earnings.
If you receive advance commissions or other
amounts for services to be performed in the fu-
ture and you’re a cash-method taxpayer, you
must include these amounts in your income in
the year you receive them.
If you repay unearned commissions or other
amounts in the same year you receive them, re-
duce the amount included in your income by the
repayment. If you repay them in a later tax year,
you can deduct the repayment as an itemized
deduction on your Schedule A (Form 1040),
line 16, or you may be able to take a credit for
that year. See Repayments in chapter 8.
Allowances and reimbursements. If you re-
ceive travel, transportation, or other business
expense allowances or reimbursements from
your employer, see Pub. 463, Travel, Gift, and
Car Expenses. If you’re reimbursed for moving
expenses, see Pub. 521, Moving Expenses.
Back pay awards. If you receive an amount in
payment of a settlement or judgment for back
pay, you must include the amount of the pay-
ment in your income. This includes payments
made to you for damages, unpaid life insurance
premiums, and unpaid health insurance premi-
ums. They should be reported to you by your
employer on Form W-2.
Bonuses and awards. If you receive a bonus
or award (cash, goods, services) from your em-
ployer, you must include its value in your in-
come. However, if your employer merely prom-
ises to pay you a bonus or award at some future
time, it isn’t taxable until you receive it or it’s
made available to you.
Employee achievement award. If you re-
ceive tangible personal property (other than
cash, a gift certificate, or an equivalent item) as
an award for length of service or safety achieve-
ment, you can generally exclude its value from
your income. The amount you can exclude is
limited to your employer's cost and can’t be
more than $1,600 for qualified plan awards or
$400 for nonqualified plan awards for all such
awards you receive during the year. Your em-
ployer can tell you whether your award is a
qualified plan award. Your employer must make
the award as part of a meaningful presentation,
under conditions and circumstances that don’t
create a significant likelihood of it being dis-
guised pay.
However, the exclusion doesn’t apply to the
following awards.
• A length-of-service award if you received it
for less than 5 years of service or if you re-
ceived another length-of-service award
during the year or the previous 4 years.
• A safety achievement award if you’re a
manager, administrator, clerical employee,
or other professional employee or if more
than 10% of eligible employees previously
received safety achievement awards dur-
ing the year.
Example. Ben Green received three em-
ployee achievement awards during the year: a
nonqualified plan award of a watch valued at
$250, two qualified plan awards of a stereo val-
ued at $1,000, and a set of golf clubs valued at
$500. Assuming that the requirements for quali-
fied plan awards are otherwise satisfied, each
Chapter 5 Wages, Salaries, and Other Earnings Page 47
award by itself would be excluded from income.
However, because the $1,750 total value of the
awards is more than $1,600, Ben must include
$150 ($1,750 – $1,600) in his income.
Differential wage payments. This is any pay-
ment made to you by an employer for any pe-
riod during which you are, for a period of more
than 30 days, an active duty member of the uni-
formed services and represents all or a portion
of the wages you would have received from the
employer during that period. These payments
are treated as wages and are subject to income
tax withholding, but not FICA or FUTA taxes.
The payments are reported as wages on Form
W-2.
Government cost-of-living allowances.
Most payments received by U.S. Government
civilian employees for working abroad are taxa-
ble. However, certain cost-of-living allowances
are tax free. Pub. 516, U.S. Government Civil-
ian Employees Stationed Abroad, explains the
tax treatment of allowances, differentials, and
other special pay you receive for employment
abroad.
Nonqualified deferred compensation plans.
Your employer may report to you the total
amount of deferrals for the year under a non-
qualified deferred compensation plan on Form
W-2, box 12, using code Y. This amount isn’t in-
cluded in your income.
However, if at any time during the tax year,
the plan fails to meet certain requirements, or
isn’t operated under those requirements, all
amounts deferred under the plan for the tax
year and all preceding tax years to the extent
vested and not previously included in income
are included in your income for the current year.
This amount is included in your wages shown
on Form W-2, box 1. It’s also shown on Form
W-2, box 12, using code Z.
Note received for services. If your employer
gives you a secured note as payment for your
services, you must include the fair market value
(usually the discount value) of the note in your
income for the year you receive it. When you
later receive payments on the note, a propor-
tionate part of each payment is the recovery of
the fair market value that you previously inclu-
ded in your income. Don’t include that part
again in your income. Include the rest of the
payment in your income in the year of payment.
If your employer gives you a nonnegotiable
unsecured note as payment for your services,
payments on the note that are credited toward
the principal amount of the note are compensa-
tion income when you receive them.
Severance pay. If you receive a severance
payment when your employment with your em-
ployer ends or is terminated, you must include
this amount in your income.
Accrued leave payment. If you’re a federal
employee and receive a lump-sum payment for
accrued annual leave when you retire or resign,
this amount will be included as wages on your
Form W-2.
If you resign from one agency and are reem-
ployed by another agency, you may have to re-
pay part of your lump-sum annual leave pay-
ment to the second agency. You can reduce
gross wages by the amount you repaid in the
same tax year in which you received it. Attach
to your tax return a copy of the receipt or state-
ment given to you by the agency you repaid to
explain the difference between the wages on
the return and the wages on your Forms W-2.
Outplacement services. If you choose to
accept a reduced amount of severance pay so
that you can receive outplacement services
(such as training in résumé writing and inter-
view techniques), you must include the unre-
duced amount of the severance pay in income.
Sick pay. Pay you receive from your employer
while you’re sick or injured is part of your salary
or wages. In addition, you must include in your
income sick pay benefits received from any of
the following payers.
• A welfare fund.
• A state sickness or disability fund.
• An association of employers or employees.
• An insurance company, if your employer
paid for the plan.
However, if you paid the premiums on an acci-
dent or health insurance policy yourself, the
benefits you receive under the policy aren’t tax-
able. For more information, see Pub. 525, Taxa-
ble and Nontaxable Income.
Social security and Medicare taxes paid by
employer. If you and your employer have an
agreement that your employer pays your social
security and Medicare taxes without deducting
them from your gross wages, you must report
the amount of tax paid for you as taxable wages
on your tax return. The payment is also treated
as wages for figuring your social security and
Medicare taxes and your social security and
Medicare benefits. However, these payments
aren’t treated as social security and Medicare
wages if you’re a household worker or a farm
worker.
Stock appreciation rights. Don’t include a
stock appreciation right granted by your em-
ployer in income until you exercise (use) the
right. When you use the right, you’re entitled to
a cash payment equal to the fair market value of
the corporation's stock on the date of use minus
the fair market value on the date the right was
granted. You include the cash payment in your
income in the year you use the right.
Fringe Benefits
Fringe benefits received in connection with the
performance of your services are included in
your income as compensation unless you pay
fair market value for them or they’re specifically
excluded by law. Refraining from the perform-
ance of services (for example, under a cove-
nant not to compete) is treated as the perform-
ance of services for purposes of these rules.
Accounting period. You must use the same
accounting period your employer uses to report
your taxable noncash fringe benefits. Your em-
ployer has the option to report taxable noncash
fringe benefits by using either of the following
rules.
• The general rule: benefits are reported for
a full calendar year (January 1–December
31).
• The special accounting period rule: bene-
fits provided during the last 2 months of the
calendar year (or any shorter period) are
treated as paid during the following calen-
dar year. For example, each year your em-
ployer reports the value of benefits provi-
ded during the last 2 months of the prior
year and the first 10 months of the current
year.
Your employer doesn’t have to use the same
accounting period for each fringe benefit, but
must use the same period for all employees
who receive a particular benefit.
You must use the same accounting period
that you use to report the benefit to claim an
employee business deduction (for use of a car,
for example).
Form W-2. Your employer must include all tax-
able fringe benefits in box 1 of Form W-2 as wa-
ges, tips, and other compensation and, if appli-
cable, in boxes 3 and 5 as social security and
Medicare wages. Although not required, your
employer may include the total value of fringe
benefits in box 14 (or on a separate statement).
However, if your employer provided you with a
vehicle and included 100% of its annual lease
value in your income, the employer must sepa-
rately report this value to you in box 14 (or on a
separate statement).
Accident or Health Plan
In most cases, the value of accident or health
plan coverage provided to you by your em-
ployer isn’t included in your income. Benefits
you receive from the plan may be taxable, as
explained later under Sickness and Injury Bene-
fits.
For information on the items covered in this
section, other than long-term care coverage,
see Pub. 969, Health Savings Accounts and
Other Tax-Favored Health Plans.
Long-term care coverage. Contributions by
your employer to provide coverage for
long-term care services generally aren’t inclu-
ded in your income. However, contributions
made through a flexible spending or similar ar-
rangement offered by your employer must be
included in your income. This amount will be re-
ported as wages in box 1 of your Form W-2.
Contributions you make to the plan are dis-
cussed in Pub. 502, Medical and Dental Expen-
ses.
Archer MSA contributions. Contributions by
your employer to your Archer MSA generally
aren’t included in your income. Their total will
be reported in box 12 of Form W-2 with code R.
You must report this amount on Form 8853,
Archer MSAs and Long-Term Care Insurance
Contracts. File the form with your return.
Health flexible spending arrangement
(health FSA). If your employer provides a
health FSA that qualifies as an accident or
health plan, the amount of your salary reduc-
tion, and reimbursements of your medical care
expenses, in most cases, aren’t included in
your income.
Note. Health FSAs are subject to a limit on
salary reduction contributions for plan years be-
ginning after 2012. For tax years beginning in
Page 48 Chapter 5 Wages, Salaries, and Other Earnings
2021, the dollar limitation (as indexed for infla-
tion) on voluntary employee salary reductions
for contributions to health FSAs is $2,750.
Health reimbursement arrangement (HRA).
If your employer provides an HRA that qualifies
as an accident or health plan, coverage and re-
imbursements of your medical care expenses
generally aren’t included in your income.
Health savings account (HSA). If you’re an
eligible individual, you and any other person, in-
cluding your employer or a family member, can
make contributions to your HSA. Contributions,
other than employer contributions, are deducti-
ble on your return whether or not you itemize
deductions. Contributions made by your em-
ployer aren’t included in your income. Distribu-
tions from your HSA that are used to pay quali-
fied medical expenses aren’t included in your
income. Distributions not used for qualified
medical expenses are included in your income.
See Pub. 969 for the requirements of an HSA.
Contributions by a partnership to a bona fide
partner's HSA aren’t contributions by an em-
ployer. The contributions are treated as a distri-
bution of money and aren’t included in the part-
ner's gross income. Contributions by a
partnership to a partner's HSA for services ren-
dered are treated as guaranteed payments that
are includible in the partner's gross income. In
both situations, the partner can deduct the con-
tribution made to the partner's HSA.
Contributions by an S corporation to a 2%
shareholder-employee's HSA for services ren-
dered are treated as guaranteed payments and
are includible in the shareholder-employee's
gross income. The shareholder-employee can
deduct the contribution made to the share-
holder-employee's HSA.
Qualified HSA funding distribution. You
can make a one-time distribution from your indi-
vidual retirement account (IRA) to an HSA and
you generally won’t include any of the distribu-
tion in your income.
Adoption Assistance
You may be able to exclude from your income
amounts paid or expenses incurred by your em-
ployer for qualified adoption expenses in con-
nection with your adoption of an eligible child.
See the Instructions for Form 8839, Qualified
Adoption Expenses, for more information.
Adoption benefits are reported by your em-
ployer in box 12 of Form W-2 with code T. They
are also included as social security and Medi-
care wages in boxes 3 and 5. However, they
aren’t included as wages in box 1. To determine
the taxable and nontaxable amounts, you must
complete Part III of Form 8839. File the form
with your return.
De Minimis (Minimal) Benefits
If your employer provides you with a product or
service and the cost of it is so small that it would
be unreasonable for the employer to account
for it, you generally don’t include its value in
your income. In most cases, don’t include in
your income the value of discounts at company
cafeterias, cab fares home when working over-
time, and company picnics.
Holiday gifts. If your employer gives you a tur-
key, ham, or other item of nominal value at
Christmas or other holidays, don’t include the
value of the gift in your income. However, if your
employer gives you cash or a cash equivalent,
you must include it in your income.
Educational Assistance
You can exclude from your income up to $5,250
of qualified employer-provided educational as-
sistance. For more information, see Pub. 970,
Tax Benefits for Education.
Group-Term Life Insurance
In most cases, the cost of up to $50,000 of
group-term life insurance coverage provided to
you by your employer (or former employer) isn’t
included in your income. However, you must in-
clude in income the cost of employer-provided
insurance that is more than the cost of $50,000
of coverage reduced by any amount you pay to-
ward the purchase of the insurance.
For exceptions, see Entire cost excluded
and Entire cost taxed, later.
If your employer provided more than
$50,000 of coverage, the amount included in
your income is reported as part of your wages in
box 1 of your Form W-2. Also, it’s shown sepa-
rately in box 12 with code C.
Group-term life insurance. This insurance is
term life insurance protection (insurance for a
fixed period of time) that:
• Provides a general death benefit,
• Is provided to a group of employees,
• Is provided under a policy carried by the
employer, and
• Provides an amount of insurance to each
employee based on a formula that pre-
vents individual selection.
Permanent benefits. If your group-term life
insurance policy includes permanent benefits,
such as a paid-up or cash surrender value, you
must include in your income, as wages, the cost
of the permanent benefits minus the amount
you pay for them. Your employer should be able
to tell you the amount to include in your income.
Accidental death benefits. Insurance that
provides accidental or other death benefits but
doesn’t provide general death benefits (travel
insurance, for example) isn’t group-term life in-
surance.
Former employer. If your former employer
provided more than $50,000 of group-term life
insurance coverage during the year, the amount
included in your income is reported as wages in
box 1 of Form W-2. Also, it’s shown separately
in box 12 with code C. Box 12 will also show the
amount of uncollected social security and Medi-
care taxes on the excess coverage, with codes
M and N. You must pay these taxes with your
income tax return. Include them on Schedule 2
(Form 1040), line 13.
Two or more employers. Your exclusion for
employer-provided group-term life insurance
coverage can’t exceed the cost of $50,000 of
coverage, whether the insurance is provided by
a single employer or multiple employers. If two
or more employers provide insurance coverage
that totals more than $50,000, the amounts re-
ported as wages on your Forms W-2 won’t be
correct. You must figure how much to include in
your income. Reduce the amount you figure by
any amount reported with code C in box 12 of
your Forms W-2, add the result to the wages re-
ported in box 1, and report the total on your re-
turn.
Figuring the taxable cost. Use Worksheet
5-1 to figure the amount to include in your in-
come.
Worksheet 5-1. Figuring the
Cost of Group-Term Life
Insurance To Include in
Income
Keep for Your Records
1. Enter the total amount of
your insurance coverage
from your
employer(s) . . . . . . . . . . . . 1.
2. Limit on exclusion for
employer-provided
group-term life insurance
coverage . . . . . . . . . . . . . . 2. 50,000
3. Subtract line 2 from
line 1 . . . . . . . . . . . . . . . . . 3.
4. Divide line 3 by $1,000.
Figure to the nearest
tenth . . . . . . . . . . . . . . . . . 4.
5. Go to Table 5-1. Using your
age on the last day of the tax
year, find your age group in
the left column, and enter the
cost from the column on the
right for your age
group . . . . . . . . . . . . . . . . 5.
6. Multiply line 4 by
line 5 . . . . . . . . . . . . . . . . . 6.
7. Enter the number of full
months of coverage at this
cost . . . . . . . . . . . . . . . . . . 7.
8. Multiply line 6 by
line 7 . . . . . . . . . . . . . . . . . 8.
9. Enter the
premiums you paid
per month . . . . . 9.
10. Enter the number
of months you paid
the
premiums . . . . . 10.
11. Multiply line 9 by
line 10 . . . . . . . . . . . . . . . . 11.
12. Subtract line 11 from line 8.
Include this amount in
your income as
wages . . . . . . . . . . . . . . . 12.
Chapter 5 Wages, Salaries, and Other Earnings Page 49
Table 5-1. Cost of $1,000 of
Group-Term Life Insurance for 1
Month
Age Cost
Under 25 . . . . . . . . . . . . . . . . . $ 0.05
25 through 29 . . . . . . . . . . . . . . 0.06
30 through 34 . . . . . . . . . . . . . . 0.08
35 through 39 . . . . . . . . . . . . . . 0.09
40 through 44 . . . . . . . . . . . . . . 0.10
45 through 49 . . . . . . . . . . . . . . 0.15
50 through 54 . . . . . . . . . . . . . . 0.23
55 through 59 . . . . . . . . . . . . . . 0.43
60 through 64 . . . . . . . . . . . . . . 0.66
65 through 69 . . . . . . . . . . . . . . 1.27
70 and above . . . . . . . . . . . . . . 2.06
Example. You are 51 years old and work
for employers A and B. Both employers provide
group-term life insurance coverage for you for
the entire year. Your coverage is $35,000 with
employer A and $45,000 with employer B. You
pay premiums of $4.15 a month under the em-
ployer B group plan. You figure the amount to
include in your income as shown in Worksheet
5-1. Figuring the Cost of Group-Term Life Insur-
ance To Include in Income—Illustrated next.
Worksheet 5-1. Figuring the
Cost of Group-Term Life
Insurance To Include in
Income—Illustrated
Keep for Your Records
1. Enter the total amount of
your insurance coverage
from your
employer(s) . . . . . . . . . . . . 1. 80,000
2. Limit on exclusion for
employer-provided
group-term life insurance
coverage . . . . . . . . . . . . . . 2. 50,000
3. Subtract line 2 from
line 1 . . . . . . . . . . . . . . . . . 3. 30,000
4. Divide line 3 by $1,000.
Figure to the nearest
tenth . . . . . . . . . . . . . . . . . 4. 30.0
5. Go to Table 5-1. Using your
age on the last day of the tax
year, find your age group in
the left column, and enter the
cost from the column on the
right for your age
group . . . . . . . . . . . . . . . . 5. 0.23
6. Multiply line 4 by
line 5 . . . . . . . . . . . . . . . . . 6. 6.90
7. Enter the number of full
months of coverage at this
cost . . . . . . . . . . . . . . . . . . 7. 12
8. Multiply line 6 by
line 7 . . . . . . . . . . . . . . . . . 8. 82.80
9. Enter the
premiums you paid
per month . . . . . 9. 4.15
10. Enter the number
of months you paid
the
premiums . . . . . 10. 12
11. Multiply line 9 by
line 10 . . . . . . . . . . . . . . . . 11. 49.80
12. Subtract line 11 from line 8.
Include this amount in
your income as
wages . . . . . . . . . . . . . . . 12. 33.00
Entire cost excluded. You aren’t taxed on the
cost of group-term life insurance if any of the
following circumstances apply.
1. You’re permanently and totally disabled
and have ended your employment.
2. Your employer is the beneficiary of the
policy for the entire period the insurance is
in force during the tax year.
3. A charitable organization (defined in Pub.
526, Charitable Contributions) to which
contributions are deductible is the only
beneficiary of the policy for the entire pe-
riod the insurance is in force during the tax
year. (You aren’t entitled to a deduction for
a charitable contribution for naming a
charitable organization as the beneficiary
of your policy.)
4. The plan existed on January 1, 1984, and:
a. You retired before January 2, 1984,
and were covered by the plan when
you retired, or
b. You reached age 55 before January
2, 1984, and were employed by the
employer or its predecessor in 1983.
Entire cost taxed. You’re taxed on the entire
cost of group-term life insurance if either of the
following circumstances apply.
• The insurance is provided by your em-
ployer through a qualified employees' trust,
such as a pension trust or a qualified annu-
ity plan.
• You're a key employee and your employ-
er's plan discriminates in favor of key em-
ployees.
Retirement Planning Services
Generally, don’t include the value of qualified
retirement planning services provided to you
and your spouse by your employer's qualified
retirement plan. Qualified services include re-
tirement planning advice, information about
your employer's retirement plan, and informa-
tion about how the plan may fit into your overall
individual retirement income plan. You can’t ex-
clude the value of any tax preparation, account-
ing, legal, or brokerage services provided by
your employer.
Transportation
If your employer provides you with a qualified
transportation fringe benefit, it can be excluded
from your income, up to certain limits. A quali-
fied transportation fringe benefit is:
• Transportation in a commuter highway ve-
hicle (such as a van) between your home
and work place,
• A transit pass, or
• Qualified parking.
Cash reimbursement by your employer for
these expenses under a bona fide reimburse-
ment arrangement is also excludable. However,
cash reimbursement for a transit pass is exclud-
able only if a voucher or similar item that can be
exchanged only for a transit pass isn’t readily
available for direct distribution to you.
Exclusion limit. The exclusion for commuter
vehicle transportation and transit pass fringe
benefits can’t be more than $270 a month.
The exclusion for the qualified parking fringe
benefit can’t be more than $270 a month.
If the benefits have a value that is more than
these limits, the excess must be included in
your income.
Commuter highway vehicle. This is a high-
way vehicle that seats at least six adults (not in-
cluding the driver). At least 80% of the vehicle's
mileage must reasonably be expected to be:
• For transporting employees between their
homes and workplace, and
• On trips during which employees occupy at
least half of the vehicle's adult seating ca-
pacity (not including the driver).
Transit pass. This is any pass, token, fare-
card, voucher, or similar item entitling a person
to ride mass transit (whether public or private)
free or at a reduced rate or to ride in a com-
muter highway vehicle operated by a person in
the business of transporting persons for com-
pensation.
Qualified parking. This is parking provided to
an employee at or near the employer's place of
business. It also includes parking provided on
or near a location from which the employee
commutes to work by mass transit, in a com-
muter highway vehicle, or by carpool. It doesn’t
include parking at or near the employee's
home.
Retirement Plan
Contributions
Your employer's contributions to a qualified re-
tirement plan for you aren’t included in income
at the time contributed. (Your employer can tell
you whether your retirement plan is qualified.)
However, the cost of life insurance coverage in-
cluded in the plan may have to be included. See
Group-Term Life Insurance, earlier, under
Fringe Benefits.
If your employer pays into a nonqualified
plan for you, you must generally include the
contributions in your income as wages for the
tax year in which the contributions are made.
However, if your interest in the plan isn’t trans-
ferable or is subject to a substantial risk of for-
feiture (you have a good chance of losing it) at
the time of the contribution, you don’t have to in-
clude the value of your interest in your income
until it’s transferable or is no longer subject to a
substantial risk of forfeiture.
For information on distributions from
retirement plans, see Pub. 575, Pen-
sion and Annuity Income (or Pub. 721,
Tax Guide to U.S. Civil Service Retirement Ben-
efits, if you’re a federal employee or retiree).
Elective deferrals. If you’re covered by certain
kinds of retirement plans, you can choose to
have part of your compensation contributed by
your employer to a retirement fund, rather than
have it paid to you. The amount you set aside
(called an elective deferral) is treated as an em-
ployer contribution to a qualified plan. An elec-
tive deferral, other than a designated RothTIP
Page 50 Chapter 5 Wages, Salaries, and Other Earnings
contribution (discussed later), isn’t included in
wages subject to income tax at the time contrib-
uted. Rather, it’s subject to income tax when
distributed from the plan. However, it’s included
in wages subject to social security and Medi-
care taxes at the time contributed.
Elective deferrals include elective contribu-
tions to the following retirement plans.
1. Cash or deferred arrangements (section
401(k) plans).
2. The Thrift Savings Plan for federal em-
ployees.
3. Salary reduction simplified employee pen-
sion plans (SARSEP).
4. Savings incentive match plans for employ-
ees (SIMPLE plans).
5. Tax-sheltered annuity plans (section
403(b) plans).
6. Section 501(c)(18)(D) plans.
7. Section 457 plans.
Qualified automatic contribution arrange-
ments. Under a qualified automatic contribu-
tion arrangement, your employer can treat you
as having elected to have a part of your com-
pensation contributed to a section 401(k) plan.
You are to receive written notice of your rights
and obligations under the qualified automatic
contribution arrangement. The notice must ex-
plain:
• Your rights to elect not to have elective
contributions made, or to have contribu-
tions made at a different percentage; and
• How contributions made will be invested in
the absence of any investment decision by
you.
You must be given a reasonable period of
time after receipt of the notice and before the
first elective contribution is made to make an
election with respect to the contributions.
Overall limit on deferrals. For 2021, in
most cases, you shouldn’t have deferred more
than a total of $19,500 of contributions to the
plans listed in (1) through (3) and (5) above.
The limit for SIMPLE plans is $13,500. The limit
for section 501(c)(18)(D) plans is the lesser of
$7,000 or 25% of your compensation. The limit
for section 457 plans is the lesser of your in-
cludible compensation or $19,500. Amounts
deferred under specific plan limits are part of
the overall limit on deferrals.
Designated Roth contributions. Employ-
ers with section 401(k) and section 403(b)
plans can create qualified Roth contribution
programs so that you may elect to have part or
all of your elective deferrals to the plan designa-
ted as after-tax Roth contributions. Designated
Roth contributions are treated as elective defer-
rals, except that they’re included in income at
the time contributed.
Excess deferrals. Your employer or plan
administrator should apply the proper annual
limit when figuring your plan contributions. How-
ever, you’re responsible for monitoring the total
you defer to ensure that the deferrals aren’t
more than the overall limit.
If you set aside more than the limit, the ex-
cess must generally be included in your income
for that year, unless you have an excess defer-
ral of a designated Roth contribution. See Pub.
525 for a discussion of the tax treatment of ex-
cess deferrals.
Catch-up contributions. You may be al-
lowed catch-up contributions (additional elec-
tive deferral) if you’re age 50 or older by the end
of the tax year.
Stock Options
If you receive a nonstatutory option to buy or
sell stock or other property as payment for your
services, you will usually have income when
you receive the option, when you exercise the
option (use it to buy or sell the stock or other
property), or when you sell or otherwise dispose
of the option. However, if your option is a statu-
tory stock option, you won’t have any income
until you sell or exchange your stock. Your em-
ployer can tell you which kind of option you
hold. For more information, see Pub. 525.
Restricted Property
In most cases, if you receive property for your
services, you must include its fair market value
in your income in the year you receive the prop-
erty. However, if you receive stock or other
property that has certain restrictions that affect
its value, you don’t include the value of the
property in your income until it has substantially
vested. (Although you can elect to include the
value of the property in your income in the year
it’s transferred to you.) For more information,
see Restricted Property in Pub. 525.
Dividends received on restricted stock.
Dividends you receive on restricted stock are
treated as compensation and not as dividend
income. Your employer should include these
payments on your Form W-2.
Stock you elected to include in income.
Dividends you receive on restricted stock you
elected to include in your income in the year
transferred are treated the same as any other
dividends. Report them on your return as divi-
dends. For a discussion of dividends, see Pub.
550, Investment Income and Expenses.
For information on how to treat dividends re-
ported on both your Form W-2 and Form
1099-DIV, see Dividends received on restricted
stock in Pub. 525.
Special Rules for
Certain Employees
This section deals with special rules for people
in certain types of employment: members of the
clergy, members of religious orders, people
working for foreign employers, military person-
nel, and volunteers.
Clergy
Generally, if you’re a member of the clergy, you
must include in your income offerings and fees
you receive for marriages, baptisms, funerals,
masses, etc., in addition to your salary. If the of-
fering is made to the religious institution, it isn’t
taxable to you.
If you’re a member of a religious organiza-
tion and you give your outside earnings to the
religious organization, you must still include the
earnings in your income. However, you may be
entitled to a charitable contribution deduction
for the amount paid to the organization. See
Pub. 526.
Pension. A pension or retirement pay for a
member of the clergy is usually treated as any
other pension or annuity. It must be reported on
lines 5a and 5b of Form 1040 or 1040-SR.
Housing. Special rules for housing apply to
members of the clergy. Under these rules, you
don’t include in your income the rental value of
a home (including utilities) or a designated
housing allowance provided to you as part of
your pay. However, the exclusion can’t be more
than the reasonable pay for your services. If you
pay for the utilities, you can exclude any allow-
ance designated for utility cost, up to your ac-
tual cost. The home or allowance must be provi-
ded as compensation for your services as an
ordained, licensed, or commissioned minister.
However, you must include the rental value of
the home or the housing allowance as earnings
from self-employment on Schedule SE (Form
1040) if you’re subject to the self-employment
tax. For more information, see Pub. 517, Social
Security and Other Information for Members of
the Clergy and Religious Workers.
Members of Religious
Orders
If you’re a member of a religious order who has
taken a vow of poverty, how you treat earnings
that you renounce and turn over to the order de-
pends on whether your services are performed
for the order.
Services performed for the order. If you’re
performing the services as an agent of the order
in the exercise of duties required by the order,
don’t include in your income the amounts
turned over to the order.
If your order directs you to perform services
for another agency of the supervising church or
an associated institution, you’re considered to
be performing the services as an agent of the
order. Any wages you earn as an agent of an
order that you turn over to the order aren’t inclu-
ded in your income.
Example. You’re a member of a church or-
der and have taken a vow of poverty. You re-
nounce any claims to your earnings and turn
over to the order any salaries or wages you
earn. You’re a registered nurse, so your order
assigns you to work in a hospital that is an as-
sociated institution of the church. However, you
remain under the general direction and control
of the order. You’re considered to be an agent
of the order and any wages you earn at the hos-
pital that you turn over to your order aren’t inclu-
ded in your income.
Services performed outside the order. If
you’re directed to work outside the order, your
services aren’t an exercise of duties required by
the order unless they meet both of the following
requirements.
• They’re the kind of services that are ordi-
narily the duties of members of the order.
Chapter 5 Wages, Salaries, and Other Earnings Page 51
• They’re part of the duties that you must ex-
ercise for, or on behalf of, the religious or-
der as its agent.
If you’re an employee of a third party, the serv-
ices you perform for the third party won’t be
considered directed or required of you by the
order. Amounts you receive for these services
are included in your income, even if you have
taken a vow of poverty.
Example. Mark Brown is a member of a re-
ligious order and has taken a vow of poverty.
He renounces all claims to his earnings and
turns over his earnings to the order.
Mark is a schoolteacher. He was instructed
by the superiors of the order to get a job with a
private tax-exempt school. Mark became an
employee of the school, and, at his request, the
school made the salary payments directly to the
order.
Because Mark is an employee of the school,
he is performing services for the school rather
than as an agent of the order. The wages Mark
earns working for the school are included in his
income.
Foreign Employer
Special rules apply if you work for a foreign em-
ployer.
U.S. citizen. If you’re a U.S. citizen who works
in the United States for a foreign government,
an international organization, a foreign em-
bassy, or any foreign employer, you must in-
clude your salary in your income.
Social security and Medicare taxes.
You’re exempt from social security and Medi-
care employee taxes if you’re employed in the
United States by an international organization
or a foreign government. However, you must
pay self-employment tax on your earnings from
services performed in the United States, even
though you aren’t self-employed. This rule also
applies if you’re an employee of a qualifying
wholly owned instrumentality of a foreign gov-
ernment.
Employees of international organizations or
foreign governments. Your compensation for
official services to an international organization
is exempt from federal income tax if you aren’t a
citizen of the United States or you’re a citizen of
the Philippines (whether or not you’re a citizen
of the United States).
Your compensation for official services to a
foreign government is exempt from federal in-
come tax if all of the following are true.
• You aren’t a citizen of the United States or
you’re a citizen of the Philippines (whether
or not you’re a citizen of the United States).
• Your work is like the work done by employ-
ees of the United States in foreign coun-
tries.
• The foreign government gives an equal ex-
emption to employees of the United States
in its country.
Waiver of alien status. If you’re an alien
who works for a foreign government or interna-
tional organization and you file a waiver under
section 247(b) of the Immigration and National-
ity Act to keep your immigrant status, different
rules may apply. See Foreign Employer in Pub.
525.
Employment abroad. For information on the
tax treatment of income earned abroad, see
Pub. 54.
Military
Payments you receive as a member of a military
service are generally taxed as wages except for
retirement pay, which is taxed as a pension. Al-
lowances generally aren’t taxed. For more infor-
mation on the tax treatment of military allowan-
ces and benefits, see Pub. 3, Armed Forces'
Tax Guide.
Differential wage payments. Any payments
made to you by an employer during the time
you’re performing service in the uniformed serv-
ices are treated as compensation. These wages
are subject to income tax withholding and are
reported on a Form W-2. See the discussion
under Miscellaneous Compensation, earlier.
Military retirement pay. If your retirement pay
is based on age or length of service, it’s taxable
and must be included in your income as a pen-
sion on lines 5a and 5b of Form 1040 or
1040-SR. Don’t include in your income the
amount of any reduction in retirement or re-
tainer pay to provide a survivor annuity for your
spouse or children under the Retired Service-
man's Family Protection Plan or the Survivor
Benefit Plan.
For more detailed discussion of survivor an-
nuities, see Pub. 575, Pension and Annuity In-
come.
Disability. If you’re retired on disability, see
Military and Government Disability Pensions
under Sickness and Injury Benefits, later.
Veterans' benefits. Don’t include in your in-
come any veterans' benefits paid under any
law, regulation, or administrative practice ad-
ministered by the Department of Veterans Af-
fairs (VA). The following amounts paid to veter-
ans or their families aren’t taxable.
• Education, training, and subsistence allow-
ances.
• Disability compensation and pension pay-
ments for disabilities paid either to veter-
ans or their families.
• Grants for homes designed for wheelchair
living.
• Grants for motor vehicles for veterans who
lost their sight or the use of their limbs.
• Veterans' insurance proceeds and divi-
dends paid either to veterans or their bene-
ficiaries, including the proceeds of a veter-
an's endowment policy paid before death.
• Interest on insurance dividends you leave
on deposit with the VA.
• Benefits under a dependent-care assis-
tance program.
• The death gratuity paid to a survivor of a
member of the Armed Forces who died af-
ter September 10, 2001.
• Payments made under the compensated
work therapy program.
• Any bonus payment by a state or political
subdivision because of service in a combat
zone.
Volunteers
The tax treatment of amounts you receive as a
volunteer worker for the Peace Corps or similar
agency is covered in the following discussions.
Peace Corps. Living allowances you receive
as a Peace Corps volunteer or volunteer leader
for housing, utilities, household supplies, food,
and clothing are generally exempt from tax.
Taxable allowances. The following allow-
ances, however, must be included in your in-
come and reported as wages.
• Allowances paid to your spouse and minor
children while you’re a volunteer leader
training in the United States.
• Living allowances designated by the Direc-
tor of the Peace Corps as basic compen-
sation. These are allowances for personal
items such as domestic help, laundry and
clothing maintenance, entertainment and
recreation, transportation, and other mis-
cellaneous expenses.
• Leave allowances.
• Readjustment allowances or termination
payments. These are considered received
by you when credited to your account.
Example. Gary Carpenter, a Peace Corps
volunteer, gets $175 a month as a readjustment
allowance during his period of service, to be
paid to him in a lump sum at the end of his tour
of duty. Although the allowance isn’t available
to him until the end of his service, Gary must in-
clude it in his income on a monthly basis as it’s
credited to his account.
Volunteers in Service to America (VISTA). If
you’re a VISTA volunteer, you must include
meal and lodging allowances paid to you in
your income as wages.
National Senior Services Corps programs.
Don’t include in your income amounts you re-
ceive for supportive services or reimburse-
ments for out-of-pocket expenses from the fol-
lowing programs.
• Retired Senior Volunteer Program (RSVP).
• Foster Grandparent Program.
• Senior Companion Program.
Service Corps of Retired Executives
(SCORE). If you receive amounts for suppor-
tive services or reimbursements for
out-of-pocket expenses from SCORE, don’t in-
clude these amounts in gross income.
Volunteer tax counseling. Don’t include in
your income any reimbursements you receive
for transportation, meals, and other expenses
you have in training for, or actually providing,
volunteer federal income tax counseling for the
elderly (TCE).
You can deduct as a charitable contribution
your unreimbursed out-of-pocket expenses in
taking part in the volunteer income tax assis-
tance (VITA) program. See Pub. 526.
Page 52 Chapter 5 Wages, Salaries, and Other Earnings
Volunteer firefighters and emergency medi-
cal responders. If you are a volunteer fire-
fighter or emergency medical responder, don’t
include in your income the following benefits
you receive from a state or local government.
• Rebates or reductions of property or in-
come taxes you receive because of serv-
ices you performed as a volunteer fire-
fighter or emergency medical responder.
• Payments you receive because of services
you performed as a volunteer firefighter or
emergency medical responder, up to $50
for each month you provided services.
The excluded income reduces any related tax
or contribution deduction.
Sickness and Injury
Benefits
This section discusses sickness and injury ben-
efits, including disability pensions, long-term
care insurance contracts, workers' compensa-
tion, and other benefits.
In most cases, you must report as income
any amount you receive for personal injury or
sickness through an accident or health plan that
is paid for by your employer. If both you and
your employer pay for the plan, only the amount
you receive that is due to your employer's pay-
ments is reported as income. However, certain
payments may not be taxable to you. For infor-
mation on nontaxable payments, see Military
and Government Disability Pensions and Other
Sickness and Injury Benefits, later in this dis-
cussion.
Don’t report as income any amounts
paid to reimburse you for medical ex-
penses you incurred after the plan was
established.
Cost paid by you. If you pay the entire cost of
a health or accident insurance plan, don’t in-
clude any amounts you receive from the plan
for personal injury or sickness as income on
your tax return. If your plan reimbursed you for
medical expenses you deducted in an earlier
year, you may have to include some, or all, of
the reimbursement in your income. See What if
You Receive Insurance Reimbursement in a
Later Year? in Pub. 502, Medical and Dental
Expenses.
Cafeteria plans. In most cases, if you’re cov-
ered by an accident or health insurance plan
through a cafeteria plan, and the amount of the
insurance premiums wasn’t included in your in-
come, you aren’t considered to have paid the
premiums and you must include any benefits
you receive in your income. If the amount of the
premiums was included in your income, you’re
considered to have paid the premiums, and any
benefits you receive aren’t taxable.
Disability Pensions
If you retired on disability, you must include in
income any disability pension you receive under
a plan that is paid for by your employer. You
must report your taxable disability payments as
wages on line 1 of Form 1040 or 1040-SR until
you reach minimum retirement age. MinimumTIP
retirement age is generally the age at which you
can first receive a pension or annuity if you’re
not disabled.
You may be entitled to a tax credit if
you were permanently and totally disa-
bled when you retired. For information
on this credit and the definition of permanent
and total disability, see Pub. 524, Credit for the
Elderly or the Disabled.
Beginning on the day after you reach mini-
mum retirement age, payments you receive are
taxable as a pension or annuity. Report the pay-
ments on lines 5a and 5b of Form 1040 or
1040-SR. The rules for reporting pensions are
explained in Disability Pensions in Pub. 575.
For information on disability payments from
a governmental program provided as a substi-
tute for unemployment compensation, see Un-
employment Benefits in chapter 8.
Retirement and profit-sharing plans. If you
receive payments from a retirement or
profit-sharing plan that doesn’t provide for disa-
bility retirement, don’t treat the payments as a
disability pension. The payments must be re-
ported as a pension or annuity. For more infor-
mation on pensions, see Pub. 575.
Accrued leave payment. If you retire on disa-
bility, any lump-sum payment you receive for
accrued annual leave is a salary payment. The
payment is not a disability payment. Include it in
your income in the tax year you receive it.
Military and Government
Disability Pensions
Certain military and government disability pen-
sions aren’t taxable.
Service-connected disability. You may be
able to exclude from income amounts you re-
ceive as a pension, annuity, or similar allow-
ance for personal injury or sickness resulting
from active service in one of the following gov-
ernment services.
• The armed forces of any country.
• The National Oceanic and Atmospheric
Administration.
• The Public Health Service.
• The Foreign Service.
Conditions for exclusion. Don’t include
the disability payments in your income if any of
the following conditions apply.
1. You were entitled to receive a disability
payment before September 25, 1975.
2. You were a member of a listed govern-
ment service or its reserve component, or
were under a binding written commitment
to become a member, on September 24,
1975.
3. You receive the disability payments for a
combat-related injury. This is a personal
injury or sickness that:
a. Results directly from armed conflict;
b. Takes place while you’re engaged in
extra-hazardous service;TIP
c. Takes place under conditions simulat-
ing war, including training exercises
such as maneuvers; or
d. Is caused by an instrumentality of war.
4. You would be entitled to receive disability
compensation from the Department of Vet-
erans Affairs (VA) if you filed an applica-
tion for it. Your exclusion under this condi-
tion is equal to the amount you would be
entitled to receive from the VA.
Pension based on years of service. If you
receive a disability pension based on years of
service, in most cases you must include it in
your income. However, if the pension qualifies
for the exclusion for a service-connected disa-
bility (discussed earlier), don’t include in income
the part of your pension that you would have re-
ceived if the pension had been based on a per-
centage of disability. You must include the rest
of your pension in your income.
Retroactive VA determination. If you retire
from the armed services based on years of
service and are later given a retroactive serv-
ice-connected disability rating by the VA, your
retirement pay for the retroactive period is ex-
cluded from income up to the amount of VA dis-
ability benefits you would have been entitled to
receive. You can claim a refund of any tax paid
on the excludable amount (subject to the stat-
ute of limitations) by filing an amended return
on Form 1040-X for each previous year during
the retroactive period. You must include with
each Form 1040-X a copy of the official VA De-
termination letter granting the retroactive bene-
fit. The letter must show the amount withheld
and the effective date of the benefit.
If you receive a lump-sum disability sever-
ance payment and are later awarded VA disa-
bility benefits, exclude 100% of the severance
benefit from your income. However, you must
include in your income any lump-sum readjust-
ment or other nondisability severance payment
you received on release from active duty, even
if you’re later given a retroactive disability rating
by the VA.
Special period of limitation. In most ca-
ses, under the period of limitation, a claim for
credit or refund must be filed within 3 years
from the time a return was filed or 2 years from
the time the tax was paid. However, if you re-
ceive a retroactive service-connected disability
rating determination, the period of limitation is
extended by a 1-year period beginning on the
date of the determination. This 1-year extended
period applies to claims for credit or refund filed
after June 17, 2008, and doesn’t apply to any
tax year that began more than 5 years before
the date of the determination.
Terrorist attack or military action. Don’t in-
clude in your income disability payments you
receive for injuries incurred as a direct result of
a terrorist attack directed against the United
States (or its allies), whether outside or within
the United States or from military action. See
Pub. 3920 and Pub. 907 for more information.
Chapter 5 Wages, Salaries, and Other Earnings Page 53
Long-Term Care
Insurance Contracts
Long-term care insurance contracts in most ca-
ses are treated as accident and health insur-
ance contracts. Amounts you receive from them
(other than policyholder dividends or premium
refunds) in most cases are excludable from in-
come as amounts received for personal injury
or sickness. To claim an exclusion for payments
made on a per diem or other periodic basis un-
der a long-term care insurance contract, you
must file Form 8853 with your return.
A long-term care insurance contract is an in-
surance contract that only provides coverage
for qualified long-term care services. The con-
tract must:
• Be guaranteed renewable;
• Not provide for a cash surrender value or
other money that can be paid, assigned,
pledged, or borrowed;
• Provide that refunds, other than refunds on
the death of the insured or complete sur-
render or cancellation of the contract, and
dividends under the contract, may only be
used to reduce future premiums or in-
crease future benefits; and
• In most cases, not pay or reimburse ex-
penses incurred for services or items that
would be reimbursed under Medicare, ex-
cept where Medicare is a secondary payer
or the contract makes per diem or other
periodic payments without regard to ex-
penses.
Qualified long-term care services. Qualified
long-term care services are:
• Necessary diagnostic, preventive, thera-
peutic, curing, treating, mitigating, and re-
habilitative services, and maintenance and
personal care services; and
• Required by a chronically ill individual and
provided pursuant to a plan of care prescri-
bed by a licensed health care practitioner.
Chronically ill individual. A chronically ill indi-
vidual is one who has been certified by a li-
censed health care practitioner within the previ-
ous 12 months as one of the following.
• An individual who, for at least 90 days, is
unable to perform at least two activities of
daily living without substantial assistance
due to loss of functional capacity. Activities
of daily living are eating, toileting, transfer-
ring, bathing, dressing, and continence.
• An individual who requires substantial su-
pervision to be protected from threats to
health and safety due to severe cognitive
impairment.
Limit on exclusion. You can generally ex-
clude from gross income up to $400 a day for
2021. See Limit on exclusion, under Long-Term
Care Insurance Contracts, under Sickness and
Injury Benefits in Pub. 525 for more information.
Workers' Compensation
Amounts you receive as workers' compensation
for an occupational sickness or injury are fully
exempt from tax if they’re paid under a workers'
compensation act or a statute in the nature of a
workers' compensation act. The exemption also
applies to your survivors. The exemption, how-
ever, doesn’t apply to retirement plan benefits
you receive based on your age, length of serv-
ice, or prior contributions to the plan, even if you
retired because of an occupational sickness or
injury.
If part of your workers' compensation
reduces your social security or equiva-
lent railroad retirement benefits re-
ceived, that part is considered social security
(or equivalent railroad retirement) benefits and
may be taxable. For more information, see Pub.
915, Social Security and Equivalent Railroad
Retirement Benefits.
Return to work. If you return to work after
qualifying for workers' compensation, salary
payments you receive for performing light du-
ties are taxable as wages.
Other Sickness and Injury
Benefits
In addition to disability pensions and annuities,
you may receive other payments for sickness or
injury.
Railroad sick pay. Payments you receive as
sick pay under the Railroad Unemployment In-
surance Act are taxable and you must include
them in your income. However, don’t include
them in your income if they’re for an on-the-job
injury.
If you received income because of a disabil-
ity, see Disability Pensions, earlier.
Federal Employees' Compensation Act
(FECA). Payments received under this Act for
personal injury or sickness, including payments
to beneficiaries in case of death, aren’t taxable.
However, you’re taxed on amounts you receive
under this Act as continuation of pay for up to
45 days while a claim is being decided. Report
this income as wages. Also, pay for sick leave
while a claim is being processed is taxable and
must be included in your income as wages.
If part of the payments you receive un-
der FECA reduces your social security
or equivalent railroad retirement bene-
fits received, that part is considered social se-
curity (or equivalent railroad retirement) benefits
and may be taxable. See Pub. 554 for more in-
formation.
Other compensation. Many other amounts
you receive as compensation for sickness or in-
jury aren’t taxable. These include the following
amounts.
• Compensatory damages you receive for
physical injury or physical sickness,
whether paid in a lump sum or in periodic
payments.
• Benefits you receive under an accident or
health insurance policy on which either you
paid the premiums or your employer paid
the premiums but you had to include them
in your income.
• Disability benefits you receive for loss of
income or earning capacity as a result ofCAUTION
!CAUTION
!
injuries under a no-fault car insurance pol-
icy.
• Compensation you receive for permanent
loss or loss of use of a part or function of
your body, or for your permanent disfigure-
ment. This compensation must be based
only on the injury and not on the period of
your absence from work. These benefits
aren’t taxable even if your employer pays
for the accident and health plan that pro-
vides these benefits.
Reimbursement for medical care. A reim-
bursement for medical care is generally not tax-
able. However, it may reduce your medical ex-
pense deduction. For more information, see
Pub. 502.
6.
Interest Income
Reminders
Foreign-source income. If you are a U.S. citi-
zen with interest income from sources outside
the United States (foreign income), you must re-
port that income on your tax return unless it is
exempt by U.S. law. This is true whether you re-
side inside or outside the United States and
whether or not you receive a Form 1099 from
the foreign payer.
Automatic 6-month extension. If you receive
your Form 1099 reporting your interest income
late and you need more time to file your tax re-
turn, you can request a 6-month extension of
time to file. See Automatic Extension in chap-
ter 1.
Children who have unearned income. See
Form 8615 and its instructions for the rules and
rates that apply to certain children with un-
earned income.
Introduction
This chapter discusses the following topics.
• Different types of interest income.
• What interest is taxable and what interest
is nontaxable.
• When to report interest income.
• How to report interest income on your tax
return.
In general, any interest you receive or that is
credited to your account and can be withdrawn
is taxable income. Exceptions to this rule are
discussed later in this chapter.
You may be able to deduct expenses you
have in earning this income on Schedule A
(Form 1040) if you itemize your deductions. See
Money borrowed to invest in certificate of
deposit, later, and chapter 12.
Page 54 Chapter 6 Interest Income
Useful Items
You may want to see:
Publication
537 Installment Sales
550 Investment Income and Expenses
1212 Guide to Original Issue Discount
(OID) Instruments
Form (and Instructions)
Schedule A (Form 1040) Itemized
Deductions
Schedule B (Form 1040) Interest and
Ordinary Dividends
8615 Tax for Certain Children Who Have
Unearned Income
8814 Parents' Election To Report Child's
Interest and Dividends
8815 Exclusion of Interest From Series
EE and I U.S. Savings Bonds Issued
After 1989
8818 Optional Form To Record
Redemption of Series EE and I U.S.
Savings Bonds Issued After 1989
For these and other useful items, go to IRS.gov/
Forms.
General Information
A few items of general interest are covered
here.
Recordkeeping. You should keep a
list showing sources of interest income
and interest amounts received during
the year. Also, keep the forms you receive
showing your interest income (Forms 1099-INT,
for example) as an important part of your re-
cords.
Tax on unearned income of certain chil-
dren. Part of a child's 2021 unearned income
may be taxed at the parent's tax rate. If so,
Form 8615 must be completed and attached to
the child's tax return. If not, Form 8615 isn't re-
quired and the child's income is taxed at his or
her own tax rate.
Some parents can choose to include the
child's interest and dividends on the parent's re-
turn. If you can, use Form 8814 for this purpose.
For more information about the tax on un-
earned income of children and the parents'
election, go to Form 8615.
Beneficiary of an estate or trust. Interest
you receive as a beneficiary of an estate or trust
is generally taxable income. You should receive
a Schedule K-1 (Form 1041), Beneficiary's
Share of Income, Deductions, Credits, etc.,
from the fiduciary. Your copy of Schedule K-1
(Form 1041) and its instructions will tell you
where to report the income on your Form 1040
or 1040-SR.
Taxpayer identification number (TIN). You
must give your name and TIN (either a social
security number (SSN), an employer identifica-
tion number (EIN), an adoption taxpayer identi-
fication number (ATIN), or an individual tax
identification number (ITIN)) to any person re-
1212
Schedule A (Form 1040)
Schedule B (Form 1040)
8615
8814
8815
8818RECORDS
quired by federal tax law to make a return,
statement, or other document that relates to
you. This includes payers of interest. If you
don't give your TIN to the payer of interest, the
payer will generally be required to backup with-
hold on the interest payments at a rate of 24%,
and you may also be subject to a penalty.
TIN for joint account. If the funds in a joint
account belong to one person, list that person's
name first on the account and give that person's
TIN to the payer. (For information on who owns
the funds in a joint account, see Joint accounts,
later.) If the joint account contains combined
funds, give the TIN of the person whose name
is listed first on the account. This is because
only one name and TIN can be shown on Form
1099.
These rules apply to both joint ownership by
a married couple and to joint ownership by
other individuals. For example, if you open a
joint savings account with your child using
funds belonging to the child, list the child's
name first on the account and give the child's
TIN.
Custodian account for your child. If your
child is the actual owner of an account that is
recorded in your name as custodian for the
child, give the child's TIN to the payer. For ex-
ample, you must give your child's SSN to the
payer of interest on an account owned by your
child, even though the interest is paid to you as
custodian.
Penalty for failure to supply TIN. If you
don't give your TIN to the payer of interest, you
may have to pay a penalty. See Failure to sup-
ply SSN under Penalties in chapter 1. Backup
withholding may also apply.
Backup withholding. Your interest income is
generally not subject to regular withholding.
However, it may be subject to backup withhold-
ing to ensure that income tax is collected on the
income. Under backup withholding, the payer of
interest must withhold, as income tax, on the
amount you are paid, by applying the appropri-
ate withholding rate. The current rate is 24%.
Withholding is required only if there is a condi-
tion for backup withholding, such as failing to
provide your TIN to the payer or failing to certify
your TIN under penalties of perjury, if required.
Backup withholding may also be required if
the IRS has determined that you underreported
your interest or dividend income. For more in-
formation, see Backup Withholding in chap-
ter 4.
Reporting backup withholding. If backup
withholding is deducted from your interest in-
come, the amount withheld will be reported on
your Form 1099-INT. The Form 1099-INT will
show any backup withholding as “Federal in-
come tax withheld.”
Joint accounts. If two or more persons hold
property (such as a savings account or bond)
as joint tenants, tenants by the entirety, or ten-
ants in common, each person's share of any in-
terest from the property is determined by local
law.
Income from property given to a child.
Property you give as a parent to your child un-
der the Model Gifts of Securities to Minors Act,
the Uniform Gifts to Minors Act, or any similar
law becomes the child's property.
Income from the property is taxable to the
child, except that any part used to satisfy a legal
obligation to support the child is taxable to the
parent or guardian having that legal obligation.
Savings account with parent as trustee.
Interest income from a savings account opened
for a minor child, but placed in the name and
subject to the order of the parents as trustees,
is taxable to the child if, under the law of the
state in which the child resides, both of the fol-
lowing are true.
• The savings account legally belongs to the
child.
• The parents aren't legally permitted to use
any of the funds to support the child.
Form 1099-INT. Interest income is generally
reported to you on Form 1099-INT, or a similar
statement, by banks, savings and loans, and
other payers of interest. This form shows you
the interest income you received during the
year. Keep this form for your records. You don't
have to attach it to your tax return.
Report on your tax return the total interest
income you receive for the tax year. See the in-
structions for Form 1099-INT to see whether
you need to adjust any of the amounts reported
to you.
Interest not reported on Form 1099-INT.
Even if you don't receive a Form 1099-INT, you
must still report all of your interest income. For
example, you may receive distributive shares of
interest from partnerships or S corporations.
This interest is reported to you on Schedule K-1
(Form 1065), Partner's Share of Income, De-
duction, Credits, etc.; or Schedule K-1 (Form
1120-S), Shareholder's Share of Income, De-
ductions, Credits, etc.
Nominees. Generally, if someone receives
interest as a nominee for you, that person must
give you a Form 1099-INT showing the interest
received on your behalf.
If you receive a Form 1099-INT that includes
amounts belonging to another person, see the
discussion on nominee distributions under How
To Report Interest Income in chapter 1 of
IRS.gov/Pub550, or the Schedule B (Form
1040) instructions.
Incorrect amount. If you receive a Form
1099-INT that shows an incorrect amount or
other incorrect information, you should ask the
issuer for a corrected form. The new Form
1099-INT you receive will have the “CORREC-
TED” box checked.
Form 1099-OID. Reportable interest income
may also be shown on Form 1099-OID, Original
Issue Discount. For more information about
amounts shown on this form, see Original Issue
Discount (OID), later in this chapter.
The box references discussed below
are from the 2021 Form 1099-INT and
2021 Form 1099-DIV. Later revisions
may have different box references. For exam-
ple, the Form 1099-DIV (Rev. January 2022)
provides box 12 for "Exempt-interest divi-
dends."CAUTION
!
Chapter 6 Interest Income Page 55
Exempt-interest dividends. Exempt-interest
dividends you receive from a mutual fund or
other regulated investment company aren't in-
cluded in your taxable income. (However, see
Information-reporting requirement next.) Ex-
empt-interest dividends should be shown on
Form 1099-DIV, box 11. You don't reduce your
basis for distributions that are exempt-interest
dividends.
Information-reporting requirement. Al-
though exempt-interest dividends aren't taxa-
ble, you must show them on your tax return if
you have to file. This is an information-reporting
requirement and doesn't change the exempt-in-
terest dividends into taxable income.
Note. Exempt-interest dividends paid from
specified private activity bonds may be subject
to the alternative minimum tax. See Alternative
Minimum Tax (AMT) in chapter 13 for more in-
formation. Chapter 1 of IRS.gov/Pub550 con-
tains a discussion on private activity bonds un-
der State or Local Government Obligations.
Interest on VA dividends. Interest on insur-
ance dividends left on deposit with the Depart-
ment of Veterans Affairs (VA) isn't taxable. This
includes interest paid on dividends on conver-
ted United States Government Life Insurance
and on National Service Life Insurance policies.
Individual retirement arrangements (IRAs).
Interest on a Roth IRA generally isn't taxable.
Interest on a traditional IRA is tax deferred. You
generally don't include interest earned in an IRA
in your income until you make withdrawals from
the IRA. See chapter 9.
Taxable Interest
Taxable interest includes interest you receive
from bank accounts, loans you make to others,
and other sources. The following are some
sources of taxable interest.
Dividends that are actually interest. Certain
distributions commonly called dividends are ac-
tually interest. You must report as interest
so-called dividends on deposits or on share ac-
counts in:
• Cooperative banks,
• Credit unions,
• Domestic building and loan associations,
• Domestic savings and loan associations,
• Federal savings and loan associations,
and
• Mutual savings banks.
The “dividends” will be shown as interest in-
come on Form 1099-INT.
Money market funds. Money market funds
pay dividends and are offered by nonbank fi-
nancial institutions, such as mutual funds and
stock brokerage houses. Generally, amounts
you receive from money market funds should
be reported as dividends, not as interest.
Certificates of deposit and other deferred
interest accounts. If you open any of these
accounts, interest may be paid at fixed intervals
of 1 year or less during the term of the account.
You must generally include this interest in your
income when you actually receive it or are enti-
tled to receive it without paying a substantial
penalty. The same is true for accounts that ma-
ture in 1 year or less and pay interest in a single
payment at maturity. If interest is deferred for
more than 1 year, see Original Issue Discount
(OID), later.
Interest subject to penalty for early with-
drawal. If you withdraw funds from a deferred
interest account before maturity, you may have
to pay a penalty. You must report the total
amount of interest paid or credited to your ac-
count during the year, without subtracting the
penalty. See Penalty on early withdrawal of sav-
ings in chapter 1 of IRS.gov/Pub550 for more
information on how to report the interest and
deduct the penalty.
Money borrowed to invest in certificate
of deposit. The interest you pay on money
borrowed from a bank or savings institution to
meet the minimum deposit required for a certifi-
cate of deposit from the institution and the inter-
est you earn on the certificate are two separate
items. You must report the total interest income
you earn on the certificate in your income. If you
itemize deductions, you can deduct the interest
you pay as investment interest, up to the
amount of your net investment income. See In-
terest Expenses in chapter 3 of IRS.gov/
Pub550.
Example. You deposited $5,000 with a
bank and borrowed $5,000 from the bank to
make up the $10,000 minimum deposit required
to buy a 6-month certificate of deposit. The cer-
tificate earned $575 at maturity in 2021, but you
received only $265, which represented the
$575 you earned minus $310 interest charged
on your $5,000 loan. The bank gives you a
Form 1099-INT for 2021 showing the $575 in-
terest you earned. The bank also gives you a
statement showing that you paid $310 of inter-
est for 2021. You must include the $575 in your
income. If you itemize your deductions on
Schedule A (Form 1040), you can deduct $310,
subject to the net investment income limit.
Gift for opening account. If you receive non-
cash gifts or services for making deposits or for
opening an account in a savings institution, you
may have to report the value as interest.
For deposits of less than $5,000, gifts or
services valued at more than $10 must be re-
ported as interest. For deposits of $5,000 or
more, gifts or services valued at more than $20
must be reported as interest. The value is deter-
mined by the cost to the financial institution.
Example. You open a savings account at
your local bank and deposit $800. The account
earns $20 interest. You also receive a $15 cal-
culator. If no other interest is credited to your
account during the year, the Form 1099-INT
you receive will show $35 interest for the year.
You must report $35 interest income on your tax
return.
Interest on insurance dividends. Interest on
insurance dividends left on deposit with an in-
surance company that can be withdrawn annu-
ally is taxable to you in the year it is credited to
your account. However, if you can withdraw it
only on the anniversary date of the policy (or
other specified date), the interest is taxable in
the year that date occurs.
Prepaid insurance premiums. Any increase
in the value of prepaid insurance premiums, ad-
vance premiums, or premium deposit funds is
interest if it is applied to the payment of premi-
ums due on insurance policies or made availa-
ble for you to withdraw.
U.S. obligations. Interest on U.S. obligations
issued by any agency or instrumentality of the
United States, such as U.S. Treasury bills,
notes, and bonds, is taxable for federal income
tax purposes.
Interest on tax refunds. Interest you receive
on tax refunds is taxable income.
Interest on condemnation award. If the con-
demning authority pays you interest to compen-
sate you for a delay in payment of an award, the
interest is taxable.
Installment sale payments. If a contract for
the sale or exchange of property provides for
deferred payments, it also usually provides for
interest payable with the deferred payments.
Generally, that interest is taxable when you re-
ceive it. If little or no interest is provided for in a
deferred payment contract, part of each pay-
ment may be treated as interest. See Unstated
Interest and Original Issue Discount in Pub.
537, Installment Sales.
Interest on annuity contract. Accumulated
interest on an annuity contract you sell before
its maturity date is taxable.
Usurious interest. Usurious interest is interest
charged at an illegal rate. This is taxable as in-
terest unless state law automatically changes it
to a payment on the principal.
Interest income on frozen deposits. Ex-
clude from your gross income interest on frozen
deposits. A deposit is frozen if, at the end of the
year, you can't withdraw any part of the deposit
because:
• The financial institution is bankrupt or in-
solvent, or
• The state where the institution is located
has placed limits on withdrawals because
other financial institutions in the state are
bankrupt or insolvent.
The amount of interest you must exclude is
the interest that was credited on the frozen de-
posits minus the sum of:
• The net amount you withdrew from these
deposits during the year, and
• The amount you could have withdrawn as
of the end of the year (not reduced by any
penalty for premature withdrawals of a time
deposit).
If you receive a Form 1099-INT for interest in-
come on deposits that were frozen at the end of
2021, see Frozen deposits under How To Re-
port Interest Income in chapter 1 of IRS.gov/
Pub550 for information about reporting this in-
terest income exclusion on your tax return.
The interest you exclude is treated as credi-
ted to your account in the following year. You
must include it in income in the year you can
withdraw it.
Example. $100 of interest was credited on
your frozen deposit during the year. You with-
drew $80 but couldn't withdraw any more as of
Page 56 Chapter 6 Interest Income
the end of the year. You must include $80 in
your income and exclude $20 from your income
for the year. You must include the $20 in your
income for the year you can withdraw it.
Bonds traded flat. If you buy a bond at a dis-
count when interest has been defaulted or
when the interest has accrued but hasn't been
paid, the transaction is described as trading a
bond flat. The defaulted or unpaid interest isn't
income and isn't taxable as interest if paid later.
When you receive a payment of that interest, it
is a return of capital that reduces the remaining
cost basis of your bond. Interest that accrues
after the date of purchase, however, is taxable
interest income for the year it is received or ac-
crued. See Bonds Sold Between Interest Dates,
later, for more information.
Below-market loans. In general, a below-mar-
ket loan is a loan on which no interest is
charged or on which interest is charged at a
rate below the applicable federal rate. If you are
the lender of a below-market loan, you may
have additional interest income. See Be-
low-Market Loans in chapter 1 of IRS.gov/
Pub550 for more information.
U.S. Savings Bonds
This section provides tax information on U.S.
savings bonds. It explains how to report the in-
terest income on these bonds and how to treat
transfers of these bonds.
For other information on U.S. savings
bonds, write to:
For Series EE and I electronic savings
bonds:
Series EE and Series I
Treasury Retail Securities Services
P.O. Box 7015
Minneapolis, MN 55480-7015
For Series EE and I paper savings bonds:
Series EE and Series I
Treasury Retail Securities Services
P.O. Box 214
Minneapolis, MN 55480-0214
For Series HH and Series H savings
bonds:
Series HH and Series H
Treasury Retail Securities Services
P.O. Box 2186
Minneapolis, MN 55480-2186
Or, on the Internet, visit
TreasuryDirect.gov/indiv/indiv.htm.
Accrual method taxpayers. If you use an ac-
crual method of accounting, you must report in-
terest on U.S. savings bonds each year as it ac-
crues. You can't postpone reporting interest
until you receive it or until the bonds mature.
Accrual methods of accounting are explained in
chapter 1 under Accounting Methods.
Cash method taxpayers. If you use the cash
method of accounting, as most individual tax-
payers do, you generally report the interest on
U.S. savings bonds when you receive it. The
cash method of accounting is explained in
chapter 1 under Accounting Methods. But see
Reporting options for cash method taxpayers,
later.
Series H and HH bonds. These bonds were
issued at face value in exchange for other sav-
ings bonds. Series HH bonds were issued be-
tween 1980 and 2004. They mature 20 years
after issue. Series HH bonds that have not ma-
tured pay interest twice a year (usually by direct
deposit to your bank account). If you are a cash
method taxpayer, you must report this interest
as income in the year you receive it.
Most H/HH bonds have a deferred interest
component. The reporting of this as income is
addressed later in this chapter.
Series H bonds were issued before 1980. All
Series H bonds have matured and are no lon-
ger earning interest.
Series EE and Series I bonds. Interest on
these bonds is payable when you redeem the
bonds. The difference between the purchase
price and the redemption value is taxable inter-
est.
Series E and EE bonds. Series E bonds
were issued before 1980. All Series E bonds
have matured and are no longer earning inter-
est. Series EE bonds were first offered in Janu-
ary 1980 and have a maturity period of 30
years; they were offered in paper (definitive)
form until 2012. Paper Series EE and Series E
bonds were issued at a discount and increase
in value as they earn interest. Electronic
(book-entry) Series EE bonds were first offered
in 2003; they are issued at face value and in-
crease in value as they earn interest. For all
Series E and Series EE bonds, the purchase
price plus all accrued interest is payable to you
at redemption.
Series I bonds. Series I bonds were first of-
fered in 1998. These are inflation-indexed
bonds issued at face value with a maturity pe-
riod of 30 years. Series I bonds increase in
value as they earn interest. The face value plus
all accrued interest is payable to you at redemp-
tion.
Reporting options for cash method tax-
payers. If you use the cash method of report-
ing income, you can report the interest on Ser-
ies EE, Series E, and Series I bonds in either of
the following ways.
1. Method 1. Postpone reporting the interest
until the earlier of the year you cash or dis-
pose of the bonds or the year they mature.
(However, see Savings bonds traded,
later.)
2. Method 2. Choose to report the increase
in redemption value as interest each year.
You must use the same method for all Series
EE, Series E, and Series I bonds you own. If
you don't choose method 2 by reporting the in-
crease in redemption value as interest each
year, you must use method 1.
If you plan to cash your bonds in the
same year you will pay for higher edu-
cation expenses, you may want to use
method 1 because you may be able to exclude
the interest from your income. To learn how,
see Education Savings Bond Program, later.TIP
Change from method 1. If you want to
change your method of reporting the interest
from method 1 to method 2, you can do so with-
out permission from the IRS. In the year of
change, you must report all interest accrued to
date and not previously reported for all your
bonds.
Once you choose to report the interest each
year, you must continue to do so for all Series
EE, Series E, and Series I bonds you own and
for any you get later, unless you request per-
mission to change, as explained next.
Change from method 2. To change from
method 2 to method 1, you must request per-
mission from the IRS. Permission for the
change is automatically granted if you send the
IRS a statement that meets all the following re-
quirements.
1. You have typed or printed the following
number at the top: “131.”
2. It includes your name and social security
number under “131.”
3. It includes the year of change (both the
beginning and ending dates).
4. It identifies the savings bonds for which
you are requesting this change.
5. It includes your agreement to:
a. Report all interest on any bonds ac-
quired during or after the year of
change when the interest is realized
upon disposition, redemption, or final
maturity, whichever is earliest; and
b. Report all interest on the bonds ac-
quired before the year of change
when the interest is realized upon dis-
position, redemption, or final maturity,
whichever is earliest, with the excep-
tion of the interest reported in prior tax
years.
You must attach this statement to your tax
return for the year of change, which you must
file by the due date (including extensions).
You can have an automatic extension of 6
months from the due date of your return for the
year of change (excluding extensions) to file the
statement with an amended return. To get this
extension, you must have filed your original re-
turn for the year of the change by the due date
(including extensions).
Instead of filing this statement, you can re-
quest permission to change from method 2 to
method 1 by filing Form 3115, Application for
Change in Accounting Method. In that case, fol-
low the form instructions for an automatic
change. No user fee is required.
Co-owners. If a U.S. savings bond is issued in
the names of co-owners, such as you and your
child or you and your spouse, interest on the
bond is generally taxable to the co-owner who
bought the bond.
One co-owner's funds used. If you used
your funds to buy the bond, you must pay the
tax on the interest. This is true even if you let
the other co-owner redeem the bond and keep
all the proceeds. Under these circumstances,
the co-owner who redeemed the bond will re-
ceive a Form 1099-INT at the time of redemp-
tion and must provide you with another Form
Chapter 6 Interest Income Page 57
1099-INT showing the amount of interest from
the bond taxable to you. The co-owner who re-
deemed the bond is a “nominee.” See Nominee
distributions under How To Report Interest In-
come in chapter 1 of IRS.gov/Pub550 for more
information about how a person who is a nomi-
nee reports interest income belonging to an-
other person.
Both co-owners' funds used. If you and
the other co-owner each contribute part of the
bond's purchase price, the interest is generally
taxable to each of you, in proportion to the
amount each of you paid.
Community property. If you and your
spouse live in a community property state and
hold bonds as community property, one-half of
the interest is considered received by each of
you. If you file separate returns, each of you
must generally report one-half of the bond inter-
est. For more information about community
property, see Pub. 555.
Table 6-1. These rules are also shown in
Table 6-1.
Ownership transferred. If you bought Series
E, Series EE, or Series I bonds entirely with
your own funds and had them reissued in your
co-owner's name or beneficiary's name alone,
you must include in your gross income for the
year of reissue all interest that you earned on
these bonds and have not previously reported.
But, if the bonds were reissued in your name
alone, you don't have to report the interest ac-
crued at that time.
This same rule applies when bonds (other
than bonds held as community property) are
transferred between spouses or incident to di-
vorce.
Purchased jointly. If you and a co-owner
each contributed funds to buy Series E, Series
EE, or Series I bonds jointly and later have the
bonds reissued in the co-owner's name alone,
you must include in your gross income for the
year of reissue your share of all the interest
earned on the bonds that you have not previ-
ously reported. The former co-owner doesn't
have to include in gross income at the time of
reissue his or her share of the interest earned
that was not reported before the transfer. This
interest, however, as well as all interest earned
after the reissue, is income to the former
co-owner.
This income-reporting rule also applies
when a new co-owner purchases your share of
the bond and the bonds are reissued in the
name of your former co-owner and a new
co-owner. But the new co-owner will report only
his or her share of the interest earned after the
transfer.
If bonds that you and a co-owner bought
jointly are reissued to each of you separately in
the same proportion as your contribution to the
purchase price, neither you nor your co-owner
has to report at that time the interest earned be-
fore the bonds were reissued.
Example 1. You and your spouse each
spent an equal amount to buy a $1,000 Series
EE savings bond. The bond was issued to you
and your spouse as co-owners. You both post-
pone reporting interest on the bond. You later
have the bond reissued as two $500 bonds,
one in your name and one in your spouse's
name. At that time, neither you nor your spouse
has to report the interest earned to the date of
reissue.
Example 2. You bought a $1,000 Series
EE savings bond entirely with your own funds.
The bond was issued to you and your spouse
as co-owners. You both postpone reporting in-
terest on the bond. You later have the bond re-
issued as two $500 bonds, one in your name
and one in your spouse's name. You must re-
port half the interest earned to the date of reis-
sue.
Transfer to a trust. If you own Series E, Ser-
ies EE, or Series I bonds and transfer them to a
trust, giving up all rights of ownership, you must
include in your income for that year the interest
earned to the date of transfer if you have not al-
ready reported it. However, if you are consid-
ered the owner of the trust and if the increase in
value both before and after the transfer contin-
ues to be taxable to you, you can continue to
defer reporting the interest earned each year.
You must include the total interest in your in-
come in the year you cash or dispose of the
bonds or the year the bonds finally mature,
whichever is earlier.
The same rules apply to previously unrepor-
ted interest on Series EE or Series E bonds if
the transfer to a trust consisted of Series HH or
Series H bonds you acquired in a trade for the
Series EE or Series E bonds. See Savings
bonds traded, later.
Decedents. The manner of reporting interest
income on Series E, Series EE, or Series I
bonds, after the death of the owner (decedent),
depends on the accounting and income-report-
ing methods previously used by the decedent.
This is explained in chapter 1 of IRS.gov/
Pub550.
Savings bonds traded. Prior to September
2004, you could trade (exchange) Series E or
EE bonds for Series H or HH bonds. At the time
of the trade, you had the choice to postpone
(defer) reporting the interest which had been
earned on your Series E or EE bonds until the
Series H or HH bonds received in the trade
were redeemed or matured. Any cash you re-
ceived in the transaction was income up to the
amount of the interest that had accrued on the
Series E or EE bonds. The amount of income
that you chose to postpone reporting was recor-
ded on the face of the Series H or HH bonds
as“ Deferred Interest”; this amount is also equal
to the difference between the redemption value
of the Series H or HH bonds and your cost.
Your cost is the sum of the amount you paid for
the exchanged Series E or EE bonds plus any
amount you had to pay at the time of the trans-
action.
Example. You traded Series EE bonds (on
which you postponed reporting the interest) for
$2,500 in Series HH bonds and $223 in cash.
You reported the $223 as taxable income on
your tax return. At the time of the trade, the Ser-
ies EE bonds had accrued interest of $523 and
a redemption value of $2,723. You hold the Ser-
ies HH bonds until maturity, when you receive
$2,500. You must report $300 as interest in-
come in the year of maturity. This is the differ-
ence between their redemption value, $2,500,
and your cost, $2,200 (the amount you paid for
the Series EE bonds). It is also the difference
between the accrued interest of $523 on the
Series EE bonds and the $223 cash received
on the trade.
Note. The $300 amount that is reportable
upon redemption or maturity may be found re-
corded on the face of the Series HH bond as
“Deferred Interest.” If more than one Series HH
bond is received in the exchange, the total
amount of interest postponed/deferred in the
transaction is divided proportionately among
the Series HH bonds.
Choice to report interest in year of trade.
You can choose to treat all of the previously un-
reported accrued interest on the Series E or EE
bonds traded for Series H or HH bonds as in-
come in the year of the trade. If you choose to
report the interest, then the “Deferred Interest”
notation on the face of the Series H or HH
bonds received in the trade will be $0 or blank.
Form 1099-INT for U.S. savings bonds inter-
est. When you cash a bond, the bank or other
payer that redeems it must give you a Form
1099-INT if the interest part of the payment you
receive is $10 or more. Box 3 of your Form
1099-INT should show the interest as the differ-
ence between the amount you received and the
amount paid for the bond. However, your Form
1099-INT may show more interest than you
have to include on your income tax return. For
example, this may happen if any of the following
are true.
• You chose to report the increase in the re-
demption value of the bond each year. The
interest shown on your Form 1099-INT
won't be reduced by amounts previously
included in income.
• You received the bond from a decedent.
The interest shown on your Form 1099-INT
won't be reduced by any interest reported
by the decedent before death, or on the
decedent's final return, or by the estate on
the estate's income tax return.
• Ownership of the bond was transferred.
The interest shown on your Form 1099-INT
won't be reduced by interest that accrued
before the transfer.
Table 6-1. Who Pays the Tax on U.S. Savings Bond Interest
IF... THEN the interest must be reported by...
you buy a bond in your name and the name of another
person as co-owners, using only your own funds you.
you buy a bond in the name of another person, who is the
sole owner of the bond the person for whom you bought the bond.
you and another person buy a bond as co-owners, each
contributing part of the purchase price both you and the other co-owner, in proportion to the
amount each paid for the bond.
you and your spouse, who live in a community property
state, buy a bond that is community property you and your spouse. If you file separate returns, both you
and your spouse generally report one-half of the interest.
Page 58 Chapter 6 Interest Income
Note. This is true for paper bonds, but
the Treasury reporting process for elec-
tronic bonds is more refined—if Treasury is
aware that the transfer of an electronic
savings bond is a reportable event, then
the transferor will receive a Form 1099-INT
for the year of the transfer for the interest
accrued up to the time of the transfer;
when the transferee later disposes of the
bond (redemption, maturity, or further
transfer), the transferee will receive a Form
1099-INT reduced by the amount reported
to the transferor at the time of the original
transfer.
• You were named as a co-owner, and the
other co-owner contributed funds to buy
the bond. The interest shown on your Form
1099-INT won't be reduced by the amount
you received as nominee for the other
co-owner. (See Co-owners, earlier in this
chapter, for more information about the re-
porting requirements.)
• You received the bond in a taxable distri-
bution from a retirement or profit-sharing
plan. The interest shown on your Form
1099-INT won't be reduced by the interest
portion of the amount taxable as a distribu-
tion from the plan and not taxable as inter-
est. (This amount is generally shown on
Form 1099-R, Distributions From Pen-
sions, Annuities, Retirement or Profit-Shar-
ing Plans, IRAs, Insurance Contracts, etc.,
for the year of distribution.)
For more information on including the cor-
rect amount of interest on your return, see How
To Report Interest Income, later. Pub. 550 in-
cludes examples showing how to report these
amounts.
Interest on U.S. savings bonds is ex-
empt from state and local taxes. The
Form 1099-INT you receive will indi-
cate the amount that is for U.S. savings bond in-
terest in box 3.
Education Savings Bond
Program
You may be able to exclude from income all or
part of the interest you receive on the redemp-
tion of qualified U.S. savings bonds during the
year if you pay qualified higher educational ex-
penses during the same year. This exclusion is
known as the Education Savings Bond Pro-
gram.
You don't qualify for this exclusion if your fil-
ing status is married filing separately.
Form 8815. Use Form 8815 to figure your
exclusion. Attach the form to your Form 1040 or
1040-SR.
Qualified U.S. savings bonds. A qualified
U.S. savings bond is a Series EE bond issued
after 1989 or a Series I bond. The bond must be
issued either in your name (sole owner) or in
your and your spouse's names (co-owners).
You must be at least 24 years old before the
bond's issue date. For example, a bond bought
by a parent and issued in the name of his or her
child under age 24 doesn't qualify for the exclu-
sion by the parent or child.TIP
The issue date of a bond may be ear-
lier than the date the bond is pur-
chased because the issue date as-
signed to a bond is the first day of the month in
which it is purchased.
Beneficiary. You can designate any individual
(including a child) as a beneficiary of the bond.
Verification by IRS. If you claim the exclu-
sion, the IRS will check it by using bond re-
demption information from the Department of
the Treasury.
Qualified expenses. Qualified higher edu-
cation expenses are tuition and fees required
for you, your spouse, or your dependent (for
whom you claim an exemption) to attend an eli-
gible educational institution.
Qualified expenses include any contribution
you make to a qualified tuition program or to a
Coverdell education savings account (ESA).
Qualified expenses don't include expenses
for room and board or for courses involving
sports, games, or hobbies that aren't part of a
degree- or certificate-granting program.
Eligible educational institutions. These
institutions include most public, private, and
nonprofit universities, colleges, and vocational
schools that are accredited and eligible to par-
ticipate in student aid programs run by the U.S.
Department of Education.
Reduction for certain benefits. You must
reduce your qualified higher education expen-
ses by all of the following tax-free benefits.
1. Tax-free part of scholarships and fellow-
ships (see Scholarships and fellowships in
chapter 8).
2. Expenses used to figure the tax-free por-
tion of distributions from a Coverdell ESA.
3. Expenses used to figure the tax-free por-
tion of distributions from a qualified tuition
program.
4. Any tax-free payments (other than gifts or
inheritances) received for educational ex-
penses, such as:
a. Veterans' educational assistance ben-
efits,
b. Qualified tuition reductions, or
c. Employer-provided educational assis-
tance.
5. Any expense used in figuring the Ameri-
can opportunity and lifetime learning cred-
its.
Amount excludable. If the total proceeds
(interest and principal) from the qualified U.S.
savings bonds you redeem during the year
aren't more than your adjusted qualified higher
education expenses for the year, you may be
able to exclude all of the interest. If the pro-
ceeds are more than the expenses, you may be
able to exclude only part of the interest.
To determine the excludable amount, multi-
ply the interest part of the proceeds by a frac-
tion. The numerator of the fraction is the quali-
fied higher education expenses you paid during
the year. The denominator of the fraction is the
total proceeds you received during the year.CAUTION
!
Example. In February 2021, Mark and
Joan, a married couple, cashed qualified Series
EE U.S. savings bonds with a total denomina-
tion of $10,000 that they bought in April 2005
for $5,000. They received proceeds of $6,972,
representing principal of $5,000 and interest of
$1,972. In 2021, they paid $4,000 of their
daughter's college tuition. They aren't claiming
an education credit for that amount, and their
daughter doesn't have any tax-free educational
assistance. They can exclude $1,131 ($1,972 ×
($4,000 ÷ $6,972)) of interest in 2021. They
must include the remaining $841 ($1,972 −
$1,131) interest in gross income.
Modified adjusted gross income limit.
The interest exclusion is limited if your modified
adjusted gross income (modified AGI) is:
• $83,200 to $98,200 for taxpayers filing sin-
gle or head of household, and
• $124,800 to $154,800 for married taxpay-
ers filing jointly or for a qualifying widow(er)
with dependent child.
You don't qualify for the interest exclusion if
your modified AGI is equal to or more than the
upper limit for your filing status.
Modified AGI, for purposes of this exclusion,
is adjusted gross income (Form 1040 or
1040-SR, line 11) figured before the interest ex-
clusion, and modified by adding back any:
1. Foreign earned income exclusion,
2. Foreign housing exclusion and deduction,
3. Exclusion of income for bona fide resi-
dents of American Samoa,
4. Exclusion for income from Puerto Rico,
5. Exclusion for adoption benefits received
under an employer's adoption assistance
program, and
6. Deduction for student loan interest.
Use the Line 9 Worksheet in the Form 8815
instructions to figure your modified AGI.
If you have investment interest expense in-
curred to earn royalties and other investment in-
come, see Education Savings Bond Program in
chapter 1 of IRS.gov/Pub550.
Recordkeeping. If you claim the inter-
est exclusion, you must keep a written
record of the qualified U.S. savings
bonds you redeem. Your record must include
the serial number, issue date, face value, and
total redemption proceeds (principal and inter-
est) of each bond. You can use Form 8818 to
record this information. You should also keep
bills, receipts, canceled checks, or other docu-
mentation that shows you paid qualified higher
education expenses during the year.
U.S. Treasury Bills,
Notes, and Bonds
Treasury bills, notes, and bonds are direct
debts (obligations) of the U.S. Government.
Taxation of interest. Interest income from
Treasury bills, notes, and bonds is subject to
federal income tax but is exempt from all state
and local income taxes. You should receive a
Form 1099-INT showing the interest paid to you
for the year in box 3.RECORDS
Chapter 6 Interest Income Page 59
Treasury bills. These bills generally have a
4-week, 8-week, 13-week, 26-week, or 52-week
maturity period. They are generally issued at a
discount in the amount of $100 and multiples of
$100. The difference between the discounted
price you pay for the bills and the face value
you receive at maturity is interest income. Gen-
erally, you report this interest income when the
bill is paid at maturity. If you paid a premium for
a bill (more than the face value), you generally
report the premium as a section 171 deduction
when the bill is paid at maturity.
Treasury notes and bonds. Generally, ma-
turity periods are up to 10 years for Treasury
notes and up to 30 years for Treasury bonds.
Both are generally issued in denominations of
$100 to $1,000,000 and generally pay interest
every 6 months. Generally, you report this inter-
est for the year paid. For more information, see
U.S. Treasury Bills, Notes, and Bonds in chap-
ter 1 of IRS.gov/Pub550.
For other information on Treasury
notes or bonds, write to:
Treasury Retail Securities Services
P.O. Box 7015
Minneapolis, MN 55480-7015
Or, click on the link to the Treasury
website at: TreasuryDirect.gov/indiv/
indiv.htm.
For information on Series EE, Series I, and
Series HH savings bonds, see U.S. Savings
Bonds, earlier.
Treasury inflation-protected securities
(TIPS). These securities pay interest twice a
year at a fixed rate, based on a principal
amount adjusted to take into account inflation
and deflation. For the tax treatment of these se-
curities, see Inflation-Indexed Debt Instruments
under Original Issue Discount (OID) in IRS.gov/
Pub550.
Bonds Sold Between
Interest Dates
If you sell a bond between interest payment
dates, part of the sales price represents interest
accrued to the date of sale. You must report
that part of the sales price as interest income for
the year of sale.
If you buy a bond between interest payment
dates, part of the purchase price represents in-
terest accrued before the date of purchase.
When that interest is paid to you, treat it as a
nontaxable return of your capital investment,
rather than as interest income. See Accrued in-
terest on bonds under How To Report Interest
Income in chapter 1 of IRS.gov/Pub550 for in-
formation on reporting the payment.
Insurance
Life insurance proceeds paid to you as benefi-
ciary of the insured person are usually not taxa-
ble. But if you receive the proceeds in install-
ments, you must usually report a part of each
installment payment as interest income.
For more information about insurance pro-
ceeds received in installments, see Pub. 525,
Taxable and Nontaxable Income.
Annuity. If you buy an annuity with life insur-
ance proceeds, the annuity payments you re-
ceive are taxed as pension and annuity income
from a nonqualified plan, not as interest in-
come. See chapter 5 for information on pension
and annuity income from nonqualified plans.
State or Local
Government Obligations
Interest on a bond used to finance government
operations generally isn't taxable if the bond is
issued by a state, the District of Columbia, a
possession of the United States, or any of their
political subdivisions.
Bonds issued after 1982 (including tribal
economic development bonds issued after Feb-
ruary 17, 2009) by an Indian tribal government
are treated as issued by a state. Interest on
these bonds is generally tax exempt if the
bonds are part of an issue of which substantially
all proceeds are to be used in the exercise of
any essential government function. However,
the essential government function requirement
does not apply to tribal economic development
bonds issued after February 17, 2009. See sec-
tion 7871(f).
For information on federally guaranteed
bonds, mortgage revenue bonds, arbitrage
bonds, private activity bonds, qualified tax
credit bonds, and Build America bonds, see
State or Local Government Obligations in chap-
ter 1 of IRS.gov/Pub550.
Information-reporting requirement. If you
file a tax return, you are required to show any
tax-exempt interest you received on your return.
This is an information-reporting requirement
only. It doesn't change tax-exempt interest to
taxable interest.
Original Issue Discount
(OID)
Original issue discount (OID) is a form of inter-
est. You generally include OID in your income
as it accrues over the term of the debt instru-
ment, whether or not you receive any payments
from the issuer.
A debt instrument generally has OID when
the instrument is issued for a price that is less
than its stated redemption price at maturity. OID
is the difference between the stated redemption
price at maturity and the issue price.
All debt instruments that pay no interest be-
fore maturity are presumed to be issued at a
discount. Zero coupon bonds are one example
of these instruments.
The OID accrual rules generally don't apply
to short-term obligations (those with a fixed ma-
turity date of 1 year or less from date of issue).
See Discount on Short-Term Obligations in
chapter 1 of IRS.gov/Pub550.
De minimis OID. You can treat the discount as
zero if it is less than one-fourth of 1% (0.0025)
of the stated redemption price at maturity multi-
plied by the number of full years from the date
of original issue to maturity. This small discount
is known as de minimis OID.
Example 1. You bought a 10-year bond
with a stated redemption price at maturity of
$1,000, issued at $980 with OID of $20.
One-fourth of 1% of $1,000 (stated redemption
price) times 10 (the number of full years from
the date of original issue to maturity) equals
$25. Because the $20 discount is less than $25,
the OID is treated as zero. (If you hold the bond
at maturity, you will recognize $20 ($1,000 −
$980) of capital gain.)
Example 2. The facts are the same as in
Example 1, except that the bond was issued at
$950. The OID is $50. Because the $50 dis-
count is more than the $25 figured in Exam-
ple 1, you must include the OID in income as it
accrues over the term of the bond.
Debt instrument bought after original is-
sue. If you buy a debt instrument with de mini-
mis OID at a premium, the de minimis OID isn't
includible in income. If you buy a debt instru-
ment with de minimis OID at a discount, the dis-
count is reported under the market discount
rules. See Market Discount Bonds in chapter 1
of IRS.gov/Pub550.
Exceptions to reporting OID as current in-
come. The OID rules discussed in this chapter
don't apply to the following debt instruments.
1. Tax-exempt obligations. (However, see
Stripped tax-exempt obligations under
Stripped Bonds and Coupons in chapter 1
of IRS.gov/Pub550.)
2. U.S. savings bonds.
3. Short-term debt instruments (those with a
fixed maturity date of not more than 1 year
from the date of issue).
4. Loans between individuals if all the follow-
ing are true.
a. The loan is not made in the course of
a trade or business of the lender.
b. The amount of the loan, plus the
amount of any outstanding prior loans
between the same individuals, is
$10,000 or less.
c. Avoiding any federal tax isn't one of
the principal purposes of the loan.
5. A debt instrument purchased at a pre-
mium.
Form 1099-OID. The issuer of the debt instru-
ment (or your broker if you held the instrument
through a broker) should give you Form
1099-OID, or a similar statement, if the total
OID for the calendar year is $10 or more. Form
1099-OID will show, in box 1, the amount of
OID for the part of the year that you held the
bond. It will also show, in box 2, the stated inter-
est you must include in your income. Box 8
shows OID on a U.S. Treasury obligation for the
part of the year you owned it and isn't included
in box 1. A copy of Form 1099-OID will be sent
to the IRS. Don't file your copy with your return.
Keep it for your records.
In most cases, you must report the entire
amount in boxes 1, 2, and 8 of Form 1099-OID
as interest income. But see Refiguring OID
Page 60 Chapter 6 Interest Income
shown on Form 1099-OID, later in this discus-
sion, for more information.
Form 1099-OID not received. If you had OID
for the year but didn't receive a Form 1099-OID,
you may have to figure the correct amount of
OID to report on your return. See Pub. 1212 for
details on how to figure the correct OID.
Nominee. If someone else is the holder of
record (the registered owner) of an OID instru-
ment belonging to you and receives a Form
1099-OID on your behalf, that person must give
you a Form 1099-OID.
Refiguring OID shown on Form 1099-OID.
You may need to refigure the OID shown in
box 1 or box 8 of Form 1099-OID if either of the
following applies.
• You bought the debt instrument after its
original issue and paid a premium or an ac-
quisition premium.
• The debt instrument is a stripped bond or a
stripped coupon (including certain zero
coupon instruments).
If you acquired your debt instrument before
2014, your payer is only required to report a
gross amount of OID in box 1 or box 8 of Form
1099-OID.
For information about figuring the correct
amount of OID to include in your income, see
Figuring OID on Long-Term Debt Instruments in
Pub. 1212 and the instructions for Form
1099-OID.
If you acquired your debt instrument after
2013, unless you have informed your payer that
you do not want to amortize bond premium,
your payer must generally report either (1) a net
amount of OID that reflects the offset of OID by
the amount of bond premium or acquisition pre-
mium amortization for the year, or (2) a gross
amount for both the OID and the bond premium
or acquisition premium amortization for the
year.
Refiguring periodic interest shown on Form
1099-OID. If you disposed of a debt instrument
or acquired it from another holder during the
year, see Bonds Sold Between Interest Dates,
earlier, for information about the treatment of
periodic interest that may be shown in box 2 of
Form 1099-OID for that instrument.
Certificates of deposit (CDs). If you buy a
CD with a maturity of more than 1 year, you
must include in income each year a part of the
total interest due and report it in the same man-
ner as other OID.
This also applies to similar deposit arrange-
ments with banks, building and loan associa-
tions, etc., including:
• Time deposits,
• Bonus plans,
• Savings certificates,
• Deferred income certificates,
• Bonus savings certificates, and
• Growth savings certificates.
Bearer CDs. CDs issued after 1982 must
generally be in registered form. Bearer CDs are
CDs not in registered form. They aren't issued
in the depositor's name and are transferable
from one individual to another.
Banks must provide the IRS and the person
redeeming a bearer CD with a Form 1099-INT.
More information. See chapter 1 of IRS.gov/
Pub550 for more information about OID and re-
lated topics, such as market discount bonds.
When To Report
Interest Income
When to report your interest income depends
on whether you use the cash method or an ac-
crual method to report income.
Cash method. Most individual taxpayers use
the cash method. If you use this method, you
generally report your interest income in the year
in which you actually or constructively receive it.
However, there are special rules for reporting
the discount on certain debt instruments. See
U.S. Savings Bonds and Original Issue Dis-
count (OID), earlier.
Example. On September 1, 2019, you
loaned another individual $2,000 at 4% interest,
compounded annually. You aren't in the busi-
ness of lending money. The note stated that
principal and interest would be due on August
31, 2021. In 2021, you received $2,163.20
($2,000 principal and $163.20 interest). If you
use the cash method, you must include in in-
come on your 2021 return the $163.20 interest
you received in that year.
Constructive receipt. You constructively
receive income when it is credited to your ac-
count or made available to you. You don't need
to have physical possession of it. For example,
you are considered to receive interest, divi-
dends, or other earnings on any deposit or ac-
count in a bank, savings and loan, or similar fi-
nancial institution, or interest on life insurance
policy dividends left to accumulate, when they
are credited to your account and subject to your
withdrawal. This is true even if they aren't yet
entered in your passbook.
You constructively receive income on the
deposit or account even if you must:
• Make withdrawals in multiples of even
amounts;
• Give a notice to withdraw before making
the withdrawal;
• Withdraw all or part of the account to with-
draw the earnings; or
• Pay a penalty on early withdrawals, unless
the interest you are to receive on an early
withdrawal or redemption is substantially
less than the interest payable at maturity.
Accrual method. If you use an accrual
method, you report your interest income when
you earn it, whether or not you have received it.
Interest is earned over the term of the debt in-
strument.
Example. If, in the previous example, you
use an accrual method, you must include the in-
terest in your income as you earn it. You would
report the interest as follows: 2019, $26.67;
2020, $81.06; and 2021, $55.47.
Coupon bonds. Interest on bearer bonds with
detachable coupons is generally taxable in the
year the coupon becomes due and payable. It
doesn't matter when you mail the coupon for
payment.
How To Report
Interest Income
Generally, you report all your taxable interest in-
come on Form 1040 or 1040-SR, line 2b.
Schedule B (Form 1040). You must also
complete Schedule B (Form 1040), Part I, if you
file Form 1040 or 1040-SR and any of the fol-
lowing apply.
1. Your taxable interest income is more than
$1,500.
2. You are claiming the interest exclusion un-
der the Education Savings Bond Program
(discussed earlier).
3. You received interest from a seller-fi-
nanced mortgage, and the buyer used the
property as a home.
4. You received a Form 1099-INT for U.S.
savings bond interest that includes
amounts you reported in a previous tax
year.
5. You received, as a nominee, interest that
actually belongs to someone else.
6. You received a Form 1099-INT for interest
on frozen deposits.
7. You received a Form 1099-INT for interest
on a bond you bought between interest
payment dates.
8. You are reporting OID in an amount less
than the amount shown on Form
1099-OID.
9. You reduce interest income from bonds by
amortizable bond premium.
In Part I, line 1, list each payer's name and the
amount received from each. If you received a
Form 1099-INT or Form 1099-OID from a bro-
kerage firm, list the brokerage firm as the payer.
The box references discussed below
are from the 2021 Form 1099-INT and
2021 Form 1099-DIV. Later revisions
may have different box references. For exam-
ple, the Form 1099-DIV (Rev. January 2022)
provides box 12 for "Exempt-interest dividends"
and box 13 for "Specified private activity bond
interest dividends" (exempt-interest dividends
subject to the alternative minimum tax).
Reporting tax-exempt interest. Total your
tax-exempt interest (such as interest or accrued
OID on certain state and municipal bonds, in-
cluding zero coupon municipal bonds) reported
on Form 1099-INT, box 8, and exempt-interest
dividends from a mutual fund or other regulated
investment company reported on Form
1099-DIV, box 11. Add these amounts to any
other tax-exempt interest you received. Report
the total on line 2a of Form 1040 or 1040-SR.
Form 1099-INT, box 9, and Form 1099-DIV,
box 12, show the tax-exempt interest subject to
the alternative minimum tax on Form 6251.
These amounts are already included in the
amounts on Form 1099-INT, box 8, and Form
1099-DIV, box 11. Don't add the amounts in
Form 1099-INT, box 9, and Form 1099-DIV,CAUTION
!
Chapter 6 Interest Income Page 61
box 12, to, or subtract them from, the amounts
on Form 1099-INT, box 8, and Form 1099-DIV,
box 11.
Don't report interest from an IRA as
tax-exempt interest.
Form 1099-INT. Your taxable interest income,
except for interest from U.S. savings bonds and
Treasury obligations, is shown in box 1 of Form
1099-INT. Add this amount to any other taxable
interest income you received. See the instruc-
tions for Form 1099-INT if you have interest
from a security acquired at a premium. You
must report all of your taxable interest income
even if you don't receive a Form 1099-INT.
Contact your financial institution if you don't re-
ceive a Form 1099-INT by February 15. Your
identifying number may be truncated on any
Form 1099-INT you receive.
If you forfeited interest income because of
the early withdrawal of a time deposit, the de-
ductible amount will be shown on Form
1099-INT in box 2. See Penalty on early with-
drawal of savings in chapter 1 of IRS.gov/
Pub550.
Box 3 of Form 1099-INT shows the interest
income you received from U.S. savings bonds,
Treasury bills, Treasury notes, and Treasury
bonds. Generally, add the amount shown in
box 3 to any other taxable interest income you
received. If part of the amount shown in box 3
was previously included in your interest income,
see U.S. savings bond interest previously re-
ported, later. If you acquired the security at a
premium, see the instructions for Form
1099-INT.
Box 4 of Form 1099-INT will contain an
amount if you were subject to backup withhold-
ing. Include the amount from box 4 on Form
1040 or 1040-SR, line 25b (federal income tax
withheld).
Box 5 of Form 1099-INT shows investment
expenses. See chapter 12 for more information
about investment expenses.
Box 6 of Form 1099-INT shows foreign tax
paid. You may be able to claim this tax as a de-
duction or a credit on your Form 1040 or
1040-SR. See your tax return instructions.
Box 7 of Form 1099-INT shows the country
or U.S. possession to which the foreign tax was
paid.
U.S. savings bond interest previously re-
ported. If you received a Form 1099-INT for
U.S. savings bond interest, the form may show
interest you don't have to report. See Form
1099-INT for U.S. savings bonds interest, ear-
lier.
On Schedule B (Form 1040), Part I, line 1,
report all the interest shown on your Form
1099-INT. Then follow these steps.
1. Several rows above line 2, enter a subtotal
of all interest listed on line 1.
2. Below the subtotal, enter “U.S. Savings
Bond Interest Previously Reported” and
enter amounts previously reported or inter-
est accrued before you received the bond.
3. Subtract these amounts from the subtotal
and enter the result on line 2.
More information. For more information about
how to report interest income, see chapter 1 ofCAUTION
!
IRS.gov/Pub550 or the instructions for the form
you must file.
7.
Social Security
and Equivalent
Railroad
Retirement
Benefits
Introduction
This chapter explains the federal income tax
rules for social security benefits and equivalent
tier 1 railroad retirement benefits. It explains the
following topics.
• How to figure whether your benefits are
taxable.
• How to report your taxable benefits.
• How to use the social security benefits
worksheet (with examples).
• Deductions related to your benefits and
how to treat repayments that are more than
the benefits you received during the year.
Social security benefits include monthly re-
tirement, survivor, and disability benefits. They
don’t include Supplemental Security Income
(SSI) payments, which aren’t taxable.
Equivalent tier 1 railroad retirement benefits
are the part of tier 1 benefits that a railroad em-
ployee or beneficiary would have been entitled
to receive under the social security system.
They are commonly called the social security
equivalent benefit (SSEB) portion of tier 1 bene-
fits.
If you received these benefits during 2021,
you should have received a Form SSA-1099,
Social Security Benefit Statement; or Form
RRB-1099, Payments by the Railroad Retire-
ment Board. These forms show the amounts re-
ceived and repaid, and taxes withheld for the
year. You may receive more than one of these
forms for the same year. You should add the
amounts shown on all the Forms SSA-1099 and
Forms RRB-1099 you receive for the year to
determine the total amounts received and re-
paid, and taxes withheld for that year. See the
Appendix at the end of Pub. 915, Social Secur-
ity and Equivalent Railroad Retirement Benefits,
for more information.
Note. When the term “benefits” is used in
this chapter, it applies to both social security
benefits and the SSEB portion of tier 1 railroad
retirement benefits.
my Social Security account. Social security
beneficiaries may quickly and easily obtain in-
formation from the SSA's website with a my So-
cial Security account to:
• Keep track of your earnings and verify
them every year,
• Get an estimate of your future benefits if
you are still working,
• Get a letter with proof of your benefits if
you currently receive them,
• Change your address,
• Start or change your direct deposit,
• Get a replacement Medicare card, and
• Get a replacement Form SSA-1099 for the
tax season.
For more information and to set up an account,
go to SSA.gov/myaccount.
What isn’t covered in this chapter. This
chapter doesn’t cover the tax rules for the fol-
lowing railroad retirement benefits.
• Non-social security equivalent benefit
(NSSEB) portion of tier 1 benefits.
• Tier 2 benefits.
• Vested dual benefits.
• Supplemental annuity benefits.
For information on these benefits, see Pub.
575, Pension and Annuity Income.
This chapter doesn’t cover the tax rules for
social security benefits reported on Form
SSA-1042S, Social Security Benefit Statement;
or Form RRB-1042S, Statement for Nonresi-
dent Alien Recipients of Payments by the Rail-
road Retirement Board. For information about
these benefits, see Pub. 519, U.S. Tax Guide
for Aliens; and Pub. 915, Social Security and
Equivalent Railroad Retirement Benefits.
This chapter also doesn’t cover the tax rules
for foreign social security benefits. These bene-
fits are taxable as annuities, unless they are ex-
empt from U.S. tax or treated as a U.S. social
security benefit under a tax treaty.
Useful Items
You may want to see:
Publication
501 Dependents, Standard Deduction,
and Filing Information
505 Tax Withholding and Estimated Tax
519 U.S. Tax Guide for Aliens
575 Pension and Annuity Income
590-A Contributions to Individual
Retirement Arrangements (IRAs)
915 Social Security and Equivalent
Railroad Retirement Benefits
Forms (and Instructions)
1040-ES Estimated Tax for Individuals
SSA-1099 Social Security Benefit
Statement
RRB-1099 Payments by the Railroad
Retirement Board
590-A
1040-ES
SSA-1099
RRB-1099
Page 62 Chapter 7 Social Security and Equivalent Railroad Retirement Benefits
W-4V Voluntary Withholding Request
For these and other useful items, go to IRS.gov/
Forms.
Are Any of Your
Benefits Taxable?
To find out whether any of your benefits may be
taxable, compare the base amount (explained
later) for your filing status with the total of:
1. One-half of your benefits; plus
2. All your other income, including tax-ex-
empt interest.
Exclusions. When making this comparison,
don’t reduce your other income by any exclu-
sions for:
• Interest from qualified U.S. savings bonds,
• Employer-provided adoption benefits,
• Interest on education loans,
• Foreign earned income or foreign housing,
or
• Income earned by bona fide residents of
American Samoa or Puerto Rico.
Children's benefits. The rules in this chapter
apply to benefits received by children. See Who
is taxed, later.
Figuring total income. To figure the total of
one-half of your benefits plus your other in-
come, use Worksheet 7-1, discussed later. If
the total is more than your base amount, part of
your benefits may be taxable.
If you are married and file a joint return for
2021, you and your spouse must combine your
incomes and your benefits to figure whether any
of your combined benefits are taxable. Even if
your spouse didn’t receive any benefits, you
must add your spouse's income to yours to fig-
ure whether any of your benefits are taxable.
If the only income you received during
2021 was your social security or the
SSEB portion of tier 1 railroad retire-
ment benefits, your benefits generally aren’t
taxable and you probably don’t have to file a re-
turn. If you have income in addition to your ben-
efits, you may have to file a return even if none
of your benefits are taxable. See Do I Have To
File a Return? in chapter 1, earlier; Pub. 501,
Dependents, Standard Deduction, and Filing In-
formation; or your tax return instructions to find
out if you have to file a return.
Base amount. Your base amount is:
• $25,000 if you are single, head of house-
hold, or qualifying widow(er);
• $25,000 if you are married filing separately
and lived apart from your spouse for all of
2021;
• $32,000 if you are married filing jointly; or
• $0 if you are married filing separately and
lived with your spouse at any time during
2021.
Worksheet 7-1. You can use Worksheet 7-1 to
figure the amount of income to compare with
your base amount. This is a quick way to check
whether some of your benefits may be taxable.
W-4VTIP
Worksheet 7-1. A Quick Way To Check if
Your Benefits May Be Taxable
Note. If you plan to file a joint income tax return,
include your spouse's amounts, if any, on lines
A, C, and D.
A. Enter the total amount from
box 5 of all your Forms
SSA-1099 and RRB-1099.
Include the full amount of
any lump-sum benefit
payments received in 2021,
for 2021 and earlier years.
(If you received more than
one form, combine the
amounts from box 5 and
enter the total.) . . . . . . . A.
Note. If the amount on line A is zero or less,
stop here; none of your benefits are taxable this
year.
B. Multiply line A by 50%
(0.50) . . . . . . . . . . . . . B.
C. Enter your total income that
is taxable (excluding line A),
such as pensions, wages,
interest, ordinary dividends,
and capital gain
distributions. Don’t reduce
your income by any
deductions, exclusions
(listed earlier), or
exemptions . . . . . . . . . . C.
D. Enter any tax-exempt
interest income, such as
interest on municipal
bonds . . . . . . . . . . . . . D.
E. Add lines B, C, and D . . . E.
Note. Compare the amount on line E to your
base amount for your filing status. If the
amount on line E equals or is less than the base
amount for your filing status, none of your
benefits are taxable this year. If the amount on
line E is more than your base amount, some of
your benefits may be taxable and you will need
to complete Worksheet 1 in Pub. 915 (or the
Social Security Benefits Worksheet in your tax
form instructions). If none of your benefits are
taxable, but you otherwise must file a tax return,
see Benefits not taxable, later, under How To
Report Your Benefits.
Example. You and your spouse (both over
65) are filing a joint return for 2021 and you both
received social security benefits during the
year. In January 2022, you received a Form
SSA-1099 showing net benefits of $5,100 in
box 5. Your spouse received a Form SSA-1099
showing net benefits of $2,500 in box 5. You
also received a taxable pension of $27,200 and
interest income of $700. You didn’t have any
tax-exempt interest income. Your benefits aren’t
taxable for 2021 because your income, as fig-
ured in Worksheet 7-1, isn’t more than your
base amount ($32,000) for married filing jointly.
Even though none of your benefits are taxa-
ble, you must file a return for 2021 because
your taxable gross income ($27,900) exceeds
the minimum filing requirement amount for your
filing status.
Filled-in Worksheet 7-1. A Quick Way To
Check if Your Benefits May Be Taxable
Note. If you plan to file a joint income tax return,
include your spouse's amounts, if any, on lines
A, C, and D.
A. Enter the total amount from
box 5 of all your Forms
SSA-1099 and RRB-1099.
Include the full amount of
any lump-sum benefit
payments received in 2021,
for 2021 and earlier years.
(If you received more than
one form, combine the
amounts from box 5 and
enter the total.) . . . . . . . A. $7,600
Note. If the amount on line A is zero or less,
stop here; none of your benefits are taxable this
year.
B. Multiply line A by 50%
(0.50) . . . . . . . . . . . . . B. 3,800
C. Enter your total income that
is taxable (excluding line
A), such as pensions,
wages, interest, ordinary
dividends, and capital gain
distributions. Don’t reduce
your income by any
deductions, exclusions
(listed earlier), or
exemptions . . . . . . . . . . C. 27,900
D. Enter any tax-exempt
interest income, such as
interest on municipal
bonds . . . . . . . . . . . . D. -0-
E. Add lines B, C, and D . . . E. $31,700
Note. Compare the amount on line E to your
base amount for your filing status. If the
amount on line E equals or is less than the base
amount for your filing status, none of your
benefits are taxable this year. If the amount on
line E is more than your base amount, some of
your benefits may be taxable and you will need
to complete Worksheet 1 in Pub. 915 (or the
Social Security Benefits Worksheet in your tax
form instructions). If none of your benefits are
taxable, but you otherwise must file a tax return,
see Benefits not taxable, later, under How To
Report Your Benefits.
Who is taxed. Benefits are included in the tax-
able income (to the extent they are taxable) of
the person who has the legal right to receive the
benefits. For example, if you and your child re-
ceive benefits, but the check for your child is
made out in your name, you must use only your
part of the benefits to see whether any benefits
are taxable to you. One-half of the part that be-
longs to your child must be added to your
child's other income to see whether any of
those benefits are taxable to your child.
Repayment of benefits. Any repayment of
benefits you made during 2021 must be sub-
tracted from the gross benefits you received in
2021. It doesn’t matter whether the repayment
was for a benefit you received in 2021 or in an
earlier year. If you repaid more than the gross
benefits you received in 2021, see Repayments
More Than Gross Benefits, later.
Chapter 7 Social Security and Equivalent Railroad Retirement Benefits Page 63
Your gross benefits are shown in box 3 of
Form SSA-1099 or RRB-1099. Your repay-
ments are shown in box 4. The amount in box 5
shows your net benefits for 2021 (box 3 minus
box 4). Use the amount in box 5 to figure
whether any of your benefits are taxable.
Tax withholding and estimated tax. You can
choose to have federal income tax withheld
from your social security benefits and/or the
SSEB portion of your tier 1 railroad retirement
benefits. If you choose to do this, you must
complete a Form W-4V, Voluntary Withholding
Request.
If you don’t choose to have income tax with-
held, you may have to request additional with-
holding from other income or pay estimated tax
during the year. For details, see chapter 4, ear-
lier; Pub. 505, Tax Withholding and Estimated
Tax; or the Instructions for Form 1040-ES, Esti-
mated Tax for Individuals.
How To Report
Your Benefits
If part of your benefits are taxable, you must use
Form 1040 or 1040-SR.
Reporting on Form 1040 or 1040-SR. Report
your net benefits (the total amount from box 5 of
all your Forms SSA-1099 and Forms
RRB-1099) on line 6a and the taxable part on
line 6b. If you are married filing separately and
you lived apart from your spouse for all of 2021,
also enter “D” to the right of the word “benefits”
on line 6a.
Benefits not taxable. Report your net benefits
(the total amount from box 5 of all your Forms
SSA-1099 and Forms RRB-1099) on Form
1040 or 1040-SR, line 6a. Enter -0- on Form
1040 or 1040-SR, line 6b. If you are married fil-
ing separately and you lived apart from your
spouse for all of 2021, also enter “D” to the right
of the word “benefits” on Form 1040 or
1040-SR, line 6a.
How Much Is Taxable?
If part of your benefits are taxable, how much is
taxable depends on the total amount of your
benefits and other income. Generally, the
higher that total amount, the greater the taxable
part of your benefits.
Maximum taxable part. Generally, up to 50%
of your benefits will be taxable. However, up to
85% of your benefits can be taxable if either of
the following situations applies to you.
• The total of one-half of your benefits and
all your other income is more than $34,000
($44,000 if you are married filing jointly).
• You are married filing separately and lived
with your spouse at any time during 2021.
Which worksheet to use. A worksheet you
can use to figure your taxable benefits is in the
Instructions for Form 1040. You can use either
that worksheet or Worksheet 1 in Pub. 915, un-
less any of the following situations applies to
you.
1. You contributed to a traditional individual
retirement arrangement (IRA) and you or
your spouse is covered by a retirement
plan at work. In this situation, you must
use the special worksheets in Appendix B
of Pub. 590-A to figure both your IRA de-
duction and your taxable benefits.
2. Situation 1 doesn’t apply and you take an
exclusion for interest from qualified U.S.
savings bonds (Form 8815), for adoption
benefits (Form 8839), for foreign earned
income or housing (Form 2555), or for in-
come earned in American Samoa (Form
4563) or Puerto Rico by bona fide resi-
dents. In this situation, you must use
Worksheet 1 in Pub. 915 to figure your tax-
able benefits.
3. You received a lump-sum payment for an
earlier year. In this situation, also complete
Worksheet 2 or 3 and Worksheet 4 in Pub.
915. See Lump-sum election next.
Lump-sum election. You must include the
taxable part of a lump-sum (retroactive) pay-
ment of benefits received in 2021 in your 2021
income, even if the payment includes benefits
for an earlier year.
This type of lump-sum benefit payment
shouldn’t be confused with the
lump-sum death benefit that both the
SSA and RRB pay to many of their beneficia-
ries. No part of the lump-sum death benefit is
subject to tax.
Generally, you use your 2021 income to fig-
ure the taxable part of the total benefits re-
ceived in 2021. However, you may be able to
figure the taxable part of a lump-sum payment
for an earlier year separately, using your in-
come for the earlier year. You can elect this
method if it lowers your taxable benefits.
Making the election. If you received a
lump-sum benefit payment in 2021 that includes
benefits for one or more earlier years, follow the
instructions in Pub. 915 under Lump-Sum Elec-
tion to see whether making the election will
lower your taxable benefits. That discussion
also explains how to make the election.
Because the earlier year's taxable ben-
efits are included in your 2021 income,
no adjustment is made to the earlier
year's return. Don’t file an amended return for
the earlier year.
Examples
The following are a few examples you can use
as a guide to figure the taxable part of your ben-
efits.
Example 1. George White is single and
files Form 1040 for 2021. He received the fol-
lowing income in 2021.
Fully taxable pension . . . . . . . . $18,600
Wages from part-time job . . . . . 9,400
Taxable interest income . . . . . . 990
Total . . . . . . . . . . . . . . . . . $28,990
George also received social security bene-
fits during 2021. The Form SSA-1099 he re-
ceived in January 2022 shows $5,980 in box 5.TIPCAUTION
!
To figure his taxable benefits, George com-
pletes the worksheet shown here.
Be sure to consider the adjustment to
income for charitable contributions on
Form 1040 or 1040-SR, line 12b, when
deciding whether to itemize. You can only claim
that adjustment to income if you take the stand-
ard deduction. See the Instructions for Form
1040 for more information.
Filled-in Worksheet 1.
Figuring Your Taxable Benefits
1. Enter the total amount from
box 5 of all your Forms
SSA-1099 and RRB-1099. Also
enter this amount on Form 1040
or 1040-SR, line 6a . . . . . . . $5,980
2. Multiply line 1 by 50% (0.50) . . . . . . . 2,990
3. Combine the amounts from Form 1040
or 1040-SR, lines 1, 2b, 3b, 4b, 5b, 7,
and 8 . . . . . . . . . . . . . . . . . . . 28,990
4. Enter the amount, if any, from Form
1040 or 1040-SR, line 2a . . . . . . . . -0-
5. Enter the total of any exclusions/
adjustments for:
• Adoption benefits (Form 8839,
line 28),
• Foreign earned income or housing
(Form 2555, lines 45 and 50), and
• Certain income of bona fide
residents of American Samoa
(Form 4563, line 15) or Puerto
Rico . . . . . . . . . . . . . . . . -0-
6. Combine lines 2, 3, 4, and 5 . . . . . . . 31,980
7. Enter the total of the amounts from
Schedule 1 (Form 1040), lines 11
through 20, and 23 and 25 . . . . . . . . -0-
8. Is the amount on line 7 less than the
amount on line 6?
No.STOP None of your social security
benefits are taxable. Enter -0- on Form
1040 or 1040-SR, line 6b.
Yes. Subtract line 7 from line 6 . . . . 31,980
9. If you are:
• Married filing jointly, enter $32,000
• Single, head of household,
qualifying widow(er), or married
filing separately and you lived
apart from your spouse for all of
2021, enter $25,000 . . . . . . . . 25,000TIP
Page 64 Chapter 7 Social Security and Equivalent Railroad Retirement Benefits
Note. If you are married filing separately
and you lived with your spouse at any
time in 2021, skip lines 9 through 16,
multiply line 8 by 85% (0.85), and enter
the result on line 17. Then, go to line 18.
10. Is the amount on line 9 less than the
amount on line 8?
No.STOP None of your benefits are
taxable. Enter -0- on Form 1040 or
1040-SR, line 6b. If you are married
filing separately and you lived apart
from your spouse for all of 2021, be sure
you entered “D” to the right of the word
“benefits” on Form 1040 or 1040-SR,
line 6a.
Yes. Subtract line 9 from line 8 . . . . 6,980
11. Enter $12,000 if married filing jointly; or
$9,000 if single, head of household,
qualifying widow(er), or married filing
separately and you lived apart from
your spouse for all of 2021 . . . . . . . . 9,000
12. Subtract line 11 from line 10. If zero or
less, enter -0- . . . . . . . . . . . . . . . -0-
13. Enter the smaller of line 10
or line 11 . . . . . . . . . . . . . . . . . 6,980
14. Multiply line 13 by 50% (0.50) . . . . . . 3,490
15. Enter the smaller of line 2 or line 14 . . 2,990
16. Multiply line 12 by 85% (0.85). If line 12
is zero, enter -0- . . . . . . . . . . . . . -0-
17. Add lines 15 and 16 . . . . . . . . . . . 2,990
18. Multiply line 1 by 85% (0.85) . . . . . . . 5,083
19. Taxable benefits. Enter the smaller of
line 17 or line 18. Also enter this amount
on Form 1040 or 1040-SR, line 6b . . . $2,990
The amount on line 19 of George's work-
sheet shows that $2,990 of his social security
benefits is taxable. On line 6a of his Form 1040,
George enters his net benefits of $5,980. On
line 6b, he enters his taxable benefits of $2,990.
Example 2. Ray and Alice Hopkins file a
joint return on Form 1040 for 2021. Ray is re-
tired and received a fully taxable pension of
$15,500. He also received social security bene-
fits, and his Form SSA-1099 for 2021 shows net
benefits of $5,600 in box 5. Alice worked during
the year and had wages of $14,000. She made
a deductible payment to her IRA account of
$1,000 and isn’t covered by a retirement plan at
work. Ray and Alice have two savings accounts
with a total of $250 in taxable interest income.
They complete Worksheet 1, shown below, en-
tering $29,750 ($15,500 + $14,000 + $250) on
line 3. They find none of Ray's social security
benefits are taxable. On Form 1040, they enter
$5,600 on line 6a and -0- on line 6b.
Filled-in Worksheet 1.
Figuring Your Taxable Benefits
1. Enter the total amount from
box 5 of all your Forms
SSA-1099 and RRB-1099. Also
enter this amount on Form 1040
or 1040-SR, line 6a . . . . . . . $5,600
2. Multiply line 1 by 50% (0.50) . . . 2,800
3. Combine the amounts from Form
1040 or 1040-SR, lines 1, 2b, 3b,
4b, 5b, 7, and 8 . . . . . . . . . . 29,750
4. Enter the amount, if any, from
Form 1040 or 1040-SR,
line 2a . . . . . . . . . . . . . . . -0-
5. Enter the total of any exclusions/
adjustments for:
• Adoption benefits (Form 8839,
line 28),
• Foreign earned income or housing
(Form 2555, lines 45 and 50), and
• Certain income of bona fide
residents of American Samoa
(Form 4563, line 15) or Puerto
Rico . . . . . . . . . . . . . . . . -0-
6. Combine lines 2, 3, 4, and 5 . . . 32,550
7. Enter the total of the amounts
from Schedule 1 (Form 1040),
lines 11 through 20, and 23 and
25 . . . . . . . . . . . . . . . . . 1,000
8. Is the amount on line 7 less than the
amount on line 6?
No.STOP None of your social security
benefits are taxable. Enter -0- on Form
1040 or 1040-SR, line 6b.
Yes. Subtract line 7 from
line 6 . . . . . . . . . . . . . . . 31,550
9. If you are:
• Married filing jointly, enter $32,000
• Single, head of household,
qualifying widow(er), or married
filing separately and you lived
apart from your spouse for all of
2021, enter $25,000 . . . . . . . . 32,000
Note. If you are married filing separately
and you lived with your spouse at any
time in 2021, skip lines 9 through 16,
multiply line 8 by 85% (0.85), and enter
the result on line 17. Then, go to line 18.
10. Is the amount on line 9 less than the
amount on line 8?
No.STOP None of your benefits are
taxable. Enter -0- on Form 1040 or
1040-SR, line 6b. If you are married
filing separately and you lived apart
from your spouse for all of 2021, be sure
you entered “D” to the right of the word
“benefits” on Form 1040 or 1040-SR,
line 6a.
Yes. Subtract line 9 from line 8 . . . .
11. Enter $12,000 if married filing jointly; or
$9,000 if single, head of household,
qualifying widow(er), or married filing
separately and you lived apart from
your spouse for all of 2021 . . . . . . . .
12. Subtract line 11 from line 10. If zero or
less, enter -0- . . . . . . . . . . . . . . .
13. Enter the smaller of line 10
or line 11 . . . . . . . . . . . . . . . . .
14. Multiply line 13 by 50% (0.50) . . . . . .
15. Enter the smaller of line 2 or line 14 . .
16. Multiply line 12 by 85% (0.85). If line 12
is zero, enter -0- . . . . . . . . . . . . .
17. Add lines 15 and 16 . . . . . . . . . . .
18. Multiply line 1 by 85% (0.85) . . . . . . .
19. Taxable benefits. Enter the smaller of
line 17 or line 18. Also enter this amount
on Form 1040 or 1040-SR, line 6b . . .
Example 3. Joe and Betty Johnson file a
joint return on Form 1040 for 2021. Joe is a re-
tired railroad worker and in 2021 received the
SSEB portion of tier 1 railroad retirement bene-
fits. Joe's Form RRB-1099 shows $10,000 in
box 5. Betty is a retired government worker and
received a fully taxable pension of $38,000.
They had $2,300 in taxable interest income plus
interest of $200 on a qualified U.S. savings
bond. The savings bond interest qualified for
the exclusion. They figure their taxable benefits
by completing Worksheet 1, shown below. Be-
cause they have qualified U.S. savings bond in-
terest, they follow the note at the beginning of
the worksheet and use the amount from line 2
of their Schedule B (Form 1040) on line 3 of the
worksheet instead of the amount from line 2b of
their Form 1040. On line 3 of the worksheet,
they enter $40,500 ($38,000 + $2,500).
Chapter 7 Social Security and Equivalent Railroad Retirement Benefits Page 65
Filled-in Worksheet 1.
Figuring Your Taxable Benefits
Before you begin:
• If you are married filing separately and you lived
apart from your spouse for all of 2021, enter “D”
to the right of the word “benefits” on Form 1040
or 1040-SR, line 6a.
• Don’t use this worksheet if you repaid benefits
in 2021 and your total repayments (box 4 of
Forms SSA-1099 and RRB-1099) were more
than your gross benefits for 2021 (box 3 of
Forms SSA-1099 and RRB-1099). None of your
benefits are taxable for 2021. For more
information, see Repayments More Than Gross
Benefits, later.
• If you are filing Form 8815, Exclusion of Interest
From Series EE and I U.S. Savings Bonds
Issued After 1989, don’t include the amount
from line 2b of Form 1040 or 1040-SR on line 3
of this worksheet. Instead, include the amount
from Schedule B (Form 1040), line 2.
1. Enter the total amount from
box 5 of all your Forms
SSA-1099 and RRB-1099. Also
enter this amount on Form 1040
or 1040-SR, line 6a . . . . . . .$10,000
2. Multiply line 1 by 50% (0.50) . . . . . . . 5,000
3. Combine the amounts from Form 1040
or 1040-SR, lines 1, 2b, 3b, 4b, 5b, 7,
and 8 . . . . . . . . . . . . . . . . . . . 40,500
4. Enter the amount, if any, from Form
1040 or 1040-SR, line 2a . . . . . . . . -0-
5. Enter the total of any exclusions/
adjustments for:
• Adoption benefits (Form 8839,
line 28),
• Foreign earned income or housing
(Form 2555, lines 45 and 50), and
• Certain income of bona fide
residents of American Samoa
(Form 4563, line 15) or Puerto
Rico . . . . . . . . . . . . . . . . -0-
6. Combine lines 2, 3, 4, and 5 . . . . . . . 45,500
7. Enter the total of the amounts from
Schedule 1 (Form 1040), lines 11
through 20, and 23 and 25 . . . . . . . . -0-
8. Is the amount on line 7 less than the
amount on line 6?
No.STOP None of your social security
benefits are taxable. Enter -0- on Form
1040 or 1040-SR, line 6b.
Yes. Subtract line 7 from line 6 . . . . 45,500
9. If you are:
• Married filing jointly, enter $32,000
• Single, head of household,
qualifying widow(er), or married
filing separately and you lived
apart from your spouse for all of
2021, enter $25,000 . . . . . . . . 32,000
Note. If you are married filing separately
and you lived with your spouse at any
time in 2021, skip lines 9 through 16,
multiply line 8 by 85% (0.85), and enter
the result on line 17. Then, go to line 18.
10. Is the amount on line 9 less than the
amount on line 8?
No.STOP None of your benefits are
taxable. Enter -0- on Form 1040 or
1040-SR, line 6b. If you are married
filing separately and you lived apart
from your spouse for all of 2021, be sure
you entered “D” to the right of the word
“benefits” on Form 1040 or 1040-SR,
line 6a.
Yes. Subtract line 9 from line 8 . . . . 13,500
11. Enter $12,000 if married filing jointly; or
$9,000 if single, head of household,
qualifying widow(er), or married filing
separately and you lived apart from
your spouse for all of 2021 . . . . . . . . 12,000
12. Subtract line 11 from line 10. If zero or
less, enter -0- . . . . . . . . . . . . . . . 1,500
13. Enter the smaller of line 10
or line 11 . . . . . . . . . . . . . . . . . 12,000
14. Multiply line 13 by 50% (0.50) . . . . . . 6,000
15. Enter the smaller of line 2 or line 14 . . 5,000
16. Multiply line 12 by 85% (0.85). If line 12
is zero, enter -0- . . . . . . . . . . . . . 1,275
17. Add lines 15 and 16 . . . . . . . . . . . 6,275
18. Multiply line 1 by 85% (0.85) . . . . . . . 8,500
19. Taxable benefits. Enter the smaller of
line 17 or line 18. Also enter this amount
on Form 1040 or 1040-SR, line 6b . . . $6,275
More than 50% of Joe's net benefits are tax-
able because the income on line 8 of the work-
sheet ($45,500) is more than $44,000. (See
Maximum taxable part under How Much Is Tax-
able, earlier.) Joe and Betty enter $10,000 on
Form 1040, line 6a; and $6,275 on Form 1040,
line 6b.
Deductions Related to
Your Benefits
You may be entitled to deduct certain amounts
related to the benefits you receive.
Disability payments. You may have received
disability payments from your employer or an in-
surance company that you included as income
on your tax return in an earlier year. If you re-
ceived a lump-sum payment from the SSA or
RRB, and you had to repay the employer or in-
surance company for the disability payments,
you can take an itemized deduction for the part
of the payments you included in gross income
in the earlier year. If the amount you repay is
more than $3,000, you may be able to claim a
tax credit instead. Claim the deduction or credit
in the same way explained under Repayment of
benefits received in an earlier year in the sec-
tion Repayments More Than Gross Benefits
next.
Repayments More Than
Gross Benefits
In some situations, your Form SSA-1099 or
Form RRB-1099 will show that the total benefits
you repaid (box 4) are more than the gross ben-
efits (box 3) you received. If this occurred, your
net benefits in box 5 will be a negative figure (a
figure in parentheses) and none of your benefits
will be taxable. Don’t use a worksheet in this
case. If you receive more than one form, a neg-
ative figure in box 5 of one form is used to offset
a positive figure in box 5 of another form for that
same year.
If you have any questions about this nega-
tive figure, contact your local SSA office or your
local RRB field office.
Joint return. If you and your spouse file a joint
return, and your Form SSA-1099 or RRB-1099
has a negative figure in box 5, but your spou-
se's doesn’t, subtract the amount in box 5 of
your form from the amount in box 5 of your
spouse's form. You do this to get your net bene-
fits when figuring if your combined benefits are
taxable.
Example. John and Mary file a joint return
for 2021. John received Form SSA-1099 show-
ing $3,000 in box 5. Mary also received Form
SSA-1099 and the amount in box 5 was ($500).
John and Mary will use $2,500 ($3,000 minus
$500) as the amount of their net benefits when
figuring if any of their combined benefits are
taxable.
Repayment of benefits received in an ear-
lier year. If the total amount shown in box 5 of
all of your Forms SSA-1099 and RRB-1099 is a
negative figure, you may be able to deduct part
of this negative figure that represents benefits
you included in gross income in an earlier year
if the figure is more than $3,000. If the figure is
$3,000 or less, it is a miscellaneous itemized
deduction and can no longer be deducted.
Deduction more than $3,000. If this de-
duction is more than $3,000, you should figure
your tax two ways.
1. Figure your tax for 2021 with the itemized
deduction included on Schedule A (Form
1040), line 16.
2. Figure your tax for 2021 in the following
steps.
a. Figure the tax without the itemized de-
duction included on Schedule A
(Form 1040), line 16.
b. For each year after 1983 for which
part of the negative figure represents
a repayment of benefits, refigure your
taxable benefits as if your total bene-
fits for the year were reduced by that
part of the negative figure. Then refig-
ure the tax for that year.
c. Subtract the total of the refigured tax
amounts in (b) from the total of your
actual tax amounts.
d. Subtract the result in (c) from the re-
sult in (a).
Compare the tax figured in methods 1 and 2.
Your tax for 2021 is the smaller of the two
amounts. If method 1 results in less tax, take
the itemized deduction on Schedule A (Form
1040), line 16. If method 2 results in less tax,
claim a credit for the amount from step 2c
Page 66 Chapter 7 Social Security and Equivalent Railroad Retirement Benefits
above on Schedule 3 (Form 1040), line 13z. En-
ter “I.R.C. 1341” on the entry line. If both meth-
ods produce the same tax, deduct the repay-
ment on Schedule A (Form 1040), line 16.
8.
Other Income
What’s New
Business meals. Section 210 of the Taxpayer
Certainty and Disaster Tax Relief Act of 2020
provides for the temporary allowance of a 100%
business meal deduction for food or beverages
provided by a restaurant and paid or incurred
after December 31, 2020, and before January
1, 2023.
Reminders
Unemployment compensation. If you re-
ceived unemployment compensation but did
not receive Form 1099-G, Certain Government
Payments, through the mail, you may need to
access your information through your state’s
website to get your electronic Form 1099-G.
Introduction
You must include on your return all items of in-
come you receive in the form of money, prop-
erty, and services unless the tax law states that
you don’t include them. Some items, however,
are only partly excluded from income. This
chapter discusses many kinds of income and
explains whether they’re taxable or nontaxable.
• Income that’s taxable must be reported on
your tax return and is subject to tax.
• Income that’s nontaxable may have to be
shown on your tax return but isn’t taxable.
This chapter begins with discussions of the
following income items.
• Bartering.
• Canceled debts.
• Sales parties at which you’re the host or
hostess.
• Life insurance proceeds.
• Partnership income.
• S corporation income.
• Recoveries (including state income tax re-
funds).
• Rents from personal property.
• Repayments.
• Royalties.
• Unemployment benefits.
• Welfare and other public assistance bene-
fits.
These discussions are followed by brief discus-
sions of other income items.
Useful Items
You may want to see:
Publication
502 Medical and Dental Expenses
504 Divorced or Separated Individuals
523 Selling Your Home
525 Taxable and Nontaxable Income
544 Sales and Other Dispositions of
Assets
547 Casualties, Disasters, and Thefts
550 Investment Income and Expenses
4681 Canceled Debts, Foreclosures,
Repossessions, and Abandonments
For these and other useful items, go to IRS.gov/
Forms.
Bartering
Bartering is an exchange of property or serv-
ices. You must include in your income, at the
time received, the fair market value of property
or services you receive in bartering. If you ex-
change services with another person and you
both have agreed ahead of time on the value of
the services, that value will be accepted as fair
market value unless the value can be shown to
be otherwise.
Generally, you report this income on Sched-
ule C (Form 1040), Profit or Loss From Busi-
ness. However, if the barter involves an ex-
change of something other than services, such
as in Example 3 below, you may have to use
another form or schedule instead.
Example 1. You’re a self-employed attor-
ney who performs legal services for a client, a
small corporation. The corporation gives you
shares of its stock as payment for your serv-
ices. You must include the fair market value of
the shares in your income on Schedule C (Form
1040) in the year you receive them.
Example 2. You’re self-employed and a
member of a barter club. The club uses “credit
units” as a means of exchange. It adds credit
units to your account for goods or services you
provide to members, which you can use to pur-
chase goods or services offered by other mem-
bers of the barter club. The club subtracts credit
units from your account when you receive
goods or services from other members. You
must include in your income the value of the
credit units that are added to your account,
even though you may not actually receive
goods or services from other members until a
later tax year.
Example 3. You own a small apartment
building. In return for 6 months rent-free use of
an apartment, an artist gives you a work of art
she created. You must report as rental income
on Schedule E (Form 1040), Supplemental In-
come and Loss, the fair market value of the art-
work, and the artist must report as income on
4681
Schedule C (Form 1040) the fair rental value of
the apartment.
Form 1099-B from barter exchange. If you
exchanged property or services through a bar-
ter exchange, Form 1099-B, Proceeds From
Broker and Barter Exchange Transactions, or a
similar statement from the barter exchange
should be sent to you by February 15, 2022. It
should show the value of cash, property, serv-
ices, credits, or scrip you received from ex-
changes during 2021. The IRS will also receive
a copy of Form 1099-B.
Canceled Debts
In most cases, if a debt you owe is canceled or
forgiven, other than as a gift or bequest, you
must include the canceled amount in your in-
come. You have no income from the canceled
debt if it’s intended as a gift to you. A debt in-
cludes any indebtedness for which you’re liable
or which attaches to property you hold.
If the debt is a nonbusiness debt, report the
canceled amount on Schedule 1 (Form 1040),
line 8c. If it’s a business debt, report the amount
on Schedule C (Form 1040) (or on Schedule F
(Form 1040), Profit or Loss From Farming, if the
debt is farm debt and you’re a farmer).
Form 1099-C. If a federal government agency,
financial institution, or credit union cancels or
forgives a debt you owe of $600 or more, you
will receive a Form 1099-C, Cancellation of
Debt. The amount of the canceled debt is
shown in box 2.
Interest included in canceled debt. If any
interest is forgiven and included in the amount
of canceled debt in box 2, the amount of inter-
est will also be shown in box 3. Whether or not
you must include the interest portion of the can-
celed debt in your income depends on whether
the interest would be deductible when you paid
it. See Deductible debt under Exceptions, later.
If the interest wouldn’t be deductible (such
as interest on a personal loan), include in your
income the amount from box 2 of Form 1099-C.
If the interest would be deductible (such as on a
business loan), include in your income the net
amount of the canceled debt (the amount
shown in box 2 less the interest amount shown
in box 3).
Discounted mortgage loan. If your financial
institution offers a discount for the early pay-
ment of your mortgage loan, the amount of the
discount is canceled debt. You must include the
canceled amount in your income.
Mortgage relief upon sale or other disposi-
tion. If you’re personally liable for a mortgage
(recourse debt), and you’re relieved of the mort-
gage when you dispose of the property, you
may realize gain or loss up to the fair market
value of the property. Also, to the extent the
mortgage discharge exceeds the fair market
value of the property, it’s income from dis-
charge of indebtedness unless it qualifies for
exclusion under Excluded debt, later. Report
any income from discharge of indebtedness on
nonbusiness debt that doesn’t qualify for exclu-
sion as other income on Schedule 1 (Form
1040), line 8c.
Chapter 8 Other Income Page 67
If you aren’t personally liable for a mortgage
(nonrecourse debt), and you’re relieved of the
mortgage when you dispose of the property
(such as through foreclosure), that relief is in-
cluded in the amount you realize. You may have
a taxable gain if the amount you realize ex-
ceeds your adjusted basis in the property. Re-
port any gain on nonbusiness property as a
capital gain.
See Pub. 4681 for more information.
Stockholder debt. If you’re a stockholder in a
corporation and the corporation cancels or for-
gives your debt to it, the canceled debt is a con-
structive distribution that’s generally dividend
income to you. For more information, see Pub.
542, Corporations.
If you’re a stockholder in a corporation and
you cancel a debt owed to you by the corpora-
tion, you generally don’t realize income. This is
because the canceled debt is considered as a
contribution to the capital of the corporation
equal to the amount of debt principal that you
canceled.
Repayment of canceled debt. If you included
a canceled amount in your income and later pay
the debt, you may be able to file a claim for re-
fund for the year the amount was included in in-
come. You can file a claim on Form 1040-X,
Amended U.S. Individual Income Tax Return, if
the statute of limitations for filing a claim is still
open. The statute of limitations generally
doesn’t end until 3 years after the due date of
your original return.
Exceptions
There are several exceptions to the inclusion of
canceled debt in income. These are explained
next.
Student loans. Certain student loans contain
a provision that all or part of the debt incurred to
attend the qualified educational institution will
be canceled if you work for a certain period of
time in certain professions for any of a broad
class of employers.
You don’t have income if your student loan
is canceled after you agreed to this provision
and then performed the services required. To
qualify, the loan must have been made by:
1. The federal government, a state or local
government, or an instrumentality, agency,
or subdivision thereof;
2. A tax-exempt public benefit corporation
that has assumed control of a state,
county, or municipal hospital, and whose
employees are considered public employ-
ees under state law; or
3. An educational institution:
a. Under an agreement with an entity de-
scribed in (1) or (2) that provided the
funds to the institution to make the
loan, or
b. As part of a program of the institution
designed to encourage its students to
serve in occupations with unmet
needs or in areas with unmet needs
and under which the services provi-
ded by the students (or former stu-
dents) are for or under the direction of
a governmental unit or a tax-exempt
organization described in section
501(c)(3).
A loan to refinance a qualified student loan
will also qualify if it was made by an educational
institution or a qualified tax-exempt organization
under its program designed as described in
item 3b above.
Education loan repayment assistance.
Education loan repayments made to you by the
National Health Service Corps Loan Repay-
ment Program (NHSC Loan Repayment Pro-
gram), a state education loan repayment pro-
gram eligible for funds under the Public Health
Service Act, or any other state loan repayment
or loan forgiveness program that’s intended to
provide for the increased availability of health
services in underserved or health professional
shortage areas aren’t taxable.
Deductible debt. You don’t have income from
the cancellation of a debt if your payment of the
debt would be deductible. This exception ap-
plies only if you use the cash method of ac-
counting. For more information, see chapter 5
of Pub. 334, Tax Guide for Small Business.
Price reduced after purchase. In most ca-
ses, if the seller reduces the amount of debt you
owe for property you purchased, you don’t have
income from the reduction. The reduction of the
debt is treated as a purchase price adjustment
and reduces your basis in the property.
Excluded debt. Don’t include a canceled debt
in your gross income in the following situations.
• The debt is canceled in a bankruptcy case
under title 11 of the U.S. Code. See Pub.
908, Bankruptcy Tax Guide.
• The debt is canceled when you’re insol-
vent. However, you can’t exclude any
amount of canceled debt that’s more than
the amount by which you’re insolvent. See
Pub. 908.
• The debt is qualified farm debt and is can-
celed by a qualified person. See chapter 3
of Pub. 225, Farmer's Tax Guide.
• The debt is qualified real property business
debt. See chapter 5 of Pub. 334.
• The cancellation is intended as a gift.
• The debt is qualified principal residence in-
debtedness.
Host or Hostess
If you host a party or event at which sales are
made, any gift or gratuity you receive for giving
the event is a payment for helping a direct seller
make sales. You must report this item as in-
come at its fair market value.
Your out-of-pocket party expenses are sub-
ject to the 50% limit for meal expenses. For tax
years 2018 and after, no deduction is allowed
for any expenses related to activities generally
considered entertainment, amusement, or rec-
reation. Taxpayers may continue to deduct 50%
of the cost of business meals if the taxpayer (or
an employee of the taxpayer) is present and the
food or beverages are not considered lavish or
extravagant. The meals may be provided to a
current or potential business customer, client,
consultant, or similar business contact. Food
and beverages that are provided during enter-
tainment events will not be considered enter-
tainment if purchased separately from the
event.
Section 210 of the Taxpayer Certainty and
Disaster Tax Relief Act of 2020 provides for the
temporary allowance of a 100% business meal
deduction for food or beverages provided by a
restaurant and paid or incurred after December
31, 2020, and before January 1, 2023.
For more information about the limit for meal
expenses, see Pub. 463, Travel, Gift, and Car
Expenses.
Life Insurance
Proceeds
Life insurance proceeds paid to you because of
the death of the insured person aren’t taxable
unless the policy was turned over to you for a
price. This is true even if the proceeds were
paid under an accident or health insurance pol-
icy or an endowment contract. However, inter-
est income received as a result of life insurance
proceeds may be taxable.
Proceeds not received in installments. If
death benefits are paid to you in a lump sum or
other than at regular intervals, include in your
income only the benefits that are more than the
amount payable to you at the time of the in-
sured person's death. If the benefit payable at
death isn’t specified, you include in your income
the benefit payments that are more than the
present value of the payments at the time of
death.
Proceeds received in installments. If you re-
ceive life insurance proceeds in installments,
you can exclude part of each installment from
your income.
To determine the excluded part, divide the
amount held by the insurance company (gener-
ally, the total lump sum payable at the death of
the insured person) by the number of install-
ments to be paid. Include anything over this ex-
cluded part in your income as interest.
Surviving spouse. If your spouse died be-
fore October 23, 1986, and insurance proceeds
paid to you because of the death of your
spouse are received in installments, you can
exclude up to $1,000 a year of the interest in-
cluded in the installments. If you remarry, you
can continue to take the exclusion.
Surrender of policy for cash. If you surren-
der a life insurance policy for cash, you must in-
clude in income any proceeds that are more
than the cost of the life insurance policy. In most
cases, your cost (or investment in the contract)
is the total of premiums that you paid for the life
insurance policy, less any refunded premiums,
rebates, dividends, or unrepaid loans that
weren’t included in your income.
You should receive a Form 1099-R showing
the total proceeds and the taxable part. Report
these amounts on lines 5a and 5b of Form 1040
or 1040-SR.
More information. For more information, see
Life Insurance Proceeds in Pub. 525.
Page 68 Chapter 8 Other Income
Endowment Contract
Proceeds
An endowment contract is a policy under which
you’re paid a specified amount of money on a
certain date unless you die before that date, in
which case the money is paid to your designa-
ted beneficiary. Endowment proceeds paid in a
lump sum to you at maturity are taxable only if
the proceeds are more than the cost of the pol-
icy. To determine your cost, subtract any
amount that you previously received under the
contract and excluded from your income from
the total premiums (or other consideration) paid
for the contract. Include in your income the part
of the lump-sum payment that’s more than your
cost.
Accelerated Death
Benefits
Certain amounts paid as accelerated death
benefits under a life insurance contract or viati-
cal settlement before the insured's death are
excluded from income if the insured is termi-
nally or chronically ill.
Viatical settlement. This is the sale or assign-
ment of any part of the death benefit under a life
insurance contract to a viatical settlement pro-
vider. A viatical settlement provider is a person
who regularly engages in the business of buy-
ing or taking assignment of life insurance con-
tracts on the lives of insured individuals who are
terminally or chronically ill and who meets the
requirements of section 101(g)(2)(B) of the In-
ternal Revenue Code.
Exclusion for terminal illness. Accelerated
death benefits are fully excludable if the insured
is a terminally ill individual. This is a person who
has been certified by a physician as having an
illness or physical condition that can reasonably
be expected to result in death within 24 months
from the date of the certification.
Exclusion for chronic illness. If the insured
is a chronically ill individual who’s not terminally
ill, accelerated death benefits paid on the basis
of costs incurred for qualified long-term care
services are fully excludable. Accelerated death
benefits paid on a per diem or other periodic
basis are excludable up to a limit. For 2021, this
limit is $400. It applies to the total of the accel-
erated death benefits and any periodic pay-
ments received from long-term care insurance
contracts. For information on the limit and the
definitions of chronically ill individual, qualified
long-term care services, and long-term care in-
surance contracts, see Long-Term Care Insur-
ance Contracts under Sickness and Injury Ben-
efits in Pub. 525.
Exception. The exclusion doesn’t apply to any
amount paid to a person (other than the in-
sured) who has an insurable interest in the life
of the insured because the insured:
• Is a director, officer, or employee of the
person; or
• Has a financial interest in the person's
business.
Form 8853. To claim an exclusion for acceler-
ated death benefits made on a per diem or
other periodic basis, you must file Form 8853,
Archer MSAs and Long-Term Care Insurance
Contracts, with your return. You don’t have to
file Form 8853 to exclude accelerated death
benefits paid on the basis of actual expenses
incurred.
Public Safety Officer Killed
or Injured in the Line of
Duty
A spouse, former spouse, and child of a public
safety officer killed in the line of duty can ex-
clude from gross income survivor benefits re-
ceived from a governmental section 401(a) plan
attributable to the officer’s service. See section
101(h).
A public safety officer who’s permanently
and totally disabled or killed in the line of duty
and a surviving spouse or child can exclude
from income death or disability benefits re-
ceived from the federal Bureau of Justice Assis-
tance or death benefits paid by a state program.
See section 104(a)(6).
For this purpose, the term “public safety offi-
cer” includes law enforcement officers, firefight-
ers, chaplains, and rescue squad and ambu-
lance crew members. For more information, see
Pub. 559, Survivors, Executors, and Adminis-
trators.
Partnership Income
A partnership generally isn’t a taxable entity.
The income, gains, losses, deductions, and
credits of a partnership are passed through to
the partners based on each partner's distribu-
tive share of these items.
Schedule K-1 (Form 1065). Although a part-
nership generally pays no tax, it must file an in-
formation return on Form 1065, U.S. Return of
Partnership Income, and send Schedule K-1
(Form 1065) to each partner. In addition, the
partnership will send each partner a copy of the
Partner's Instructions for Schedule K-1 (Form
1065) to help each partner report his or her
share of the partnership's income, deductions,
credits, and tax preference items.
Keep Schedule K-1 (Form 1065) for
your records. Don’t attach it to your
Form 1040 or 1040-SR, unless you’re
specifically required to do so.
For more information on partnerships, see
Pub. 541, Partnerships.
Qualified joint venture. If you and your
spouse each materially participate as the only
members of a jointly owned and operated busi-
ness, and you file a joint return for the tax year,
you can make a joint election to be treated as a
qualified joint venture instead of a partnership.
To make this election, you must divide all items
of income, gain, loss, deduction, and credit at-
tributable to the business between you and your
spouse in accordance with your respective in-
terests in the venture. For further information on
how to make the election and which sched-
ule(s) to file, see the instructions for your indi-
vidual tax return.RECORDS
S Corporation Income
In most cases, an S corporation doesn’t pay tax
on its income. Instead, the income, losses, de-
ductions, and credits of the corporation are
passed through to the shareholders based on
each shareholder's pro rata share.
Schedule K-1 (Form 1120-S). An S corpora-
tion must file a return on Form 1120-S, U.S. In-
come Tax Return for an S Corporation, and
send Schedule K-1 (Form 1120-S) to each
shareholder. In addition, the S corporation will
send each shareholder a copy of the Share-
holder's Instructions for Schedule K-1 (Form
1120-S) to help each shareholder report his or
her share of the S corporation's income, losses,
credits, and deductions.
Keep Schedule K-1 (Form 1120-S) for
your records. Don’t attach it to your
Form 1040 or 1040-SR, unless you’re
specifically required to do so.
For more information on S corporations and
their shareholders, see the Instructions for Form
1120-S.
Recoveries
A recovery is a return of an amount you deduc-
ted or took a credit for in an earlier year. The
most common recoveries are refunds, reim-
bursements, and rebates of deductions item-
ized on Schedule A (Form 1040). You may also
have recoveries of nonitemized deductions
(such as payments on previously deducted bad
debts) and recoveries of items for which you
previously claimed a tax credit.
Tax benefit rule. You must include a recovery
in your income in the year you receive it up to
the amount by which the deduction or credit you
took for the recovered amount reduced your tax
in the earlier year. For this purpose, any in-
crease to an amount carried over to the current
year that resulted from the deduction or credit is
considered to have reduced your tax in the ear-
lier year. For more information, see Pub. 525.
Federal income tax refund. Refunds of fed-
eral income taxes aren’t included in your in-
come because they’re never allowed as a de-
duction from income.
State tax refund. If you received a state or lo-
cal income tax refund (or credit or offset) in
2021, you must generally include it in income if
you deducted the tax in an earlier year. The
payer should send Form 1099-G to you by Jan-
uary 31, 2022. The IRS will also receive a copy
of the Form 1099-G. If you file Form 1040 or
1040-SR, use the State and Local Income Tax
Refund Worksheet in the 2021 instructions for
Schedule 1 (Form 1040) to figure the amount (if
any) to include in your income. See Pub. 525 for
when you must use another worksheet.
If you could choose to deduct for a tax year
either:
• State and local income taxes, or
• State and local general sales taxes, then
the maximum refund that you may have to in-
clude in income is limited to the excess of the
tax you chose to deduct for that year over theRECORDS
Chapter 8 Other Income Page 69
tax you didn’t choose to deduct for that year.
For examples, see Pub. 525.
Mortgage interest refund. If you received a
refund or credit in 2021 of mortgage interest
paid in an earlier year, the amount should be
shown in box 4 of your Form 1098, Mortgage In-
terest Statement. Don’t subtract the refund
amount from the interest you paid in 2021. You
may have to include it in your income under the
rules explained in the following discussions.
Interest on recovery. Interest on any of the
amounts you recover must be reported as inter-
est income in the year received. For example,
report any interest you received on state or lo-
cal income tax refunds on Form 1040 or
1040-SR, line 2b.
Recovery and expense in same year. If the
refund or other recovery and the expense occur
in the same year, the recovery reduces the de-
duction or credit and isn’t reported as income.
Recovery for 2 or more years. If you receive
a refund or other recovery that’s for amounts
you paid in 2 or more separate years, you must
allocate, on a pro rata basis, the recovered
amount between the years in which you paid it.
This allocation is necessary to determine the
amount of recovery from any earlier years and
to determine the amount, if any, of your allowa-
ble deduction for this item for the current year.
For information on how to figure the allocation,
see Recoveries in Pub. 525.
Itemized Deduction
Recoveries
If you recover any amount that you deducted in
an earlier year on Schedule A (Form 1040), you
must generally include the full amount of the re-
covery in your income in the year you receive it.
Where to report. Enter your state or local in-
come tax refund on Schedule 1 (Form 1040),
line 1, and the total of all other recoveries as
other income on Schedule 1 (Form 1040),
line 8z.
Standard deduction limit. You are generally
allowed to claim the standard deduction if you
don’t itemize your deductions. Only your item-
ized deductions that are more than your stand-
ard deduction are subject to the recovery rule
(unless you’re required to itemize your deduc-
tions). If your total deductions on the earlier
year return weren’t more than your income for
that year, include in your income this year the
lesser of:
• Your recoveries, or
• The amount by which your itemized deduc-
tions exceeded the standard deduction.
Example. For 2020, you filed a joint return.
Your taxable income was $60,000 and you
weren’t entitled to any tax credits. Your stand-
ard deduction was $24,800, and you had item-
ized deductions of $26,600. In 2021, you re-
ceived the following recoveries for amounts
deducted on your 2020 return.
Medical expenses . . . . . . . . . . . . . . . $200
State and local income tax refund . . . . . . . 400
Refund of mortgage interest . . . . . . . . . . 325
Total recoveries . . . . . . . . . . . . . . . . $925
None of the recoveries were more than the de-
ductions taken for 2020. The difference be-
tween the state and local income tax you de-
ducted and your local general sales tax was
more than $400.
Your total recoveries are less than the
amount by which your itemized deductions ex-
ceeded the standard deduction ($26,600 −
$24,800 = $1,800), so you must include your to-
tal recoveries in your income for 2021. Report
the state and local income tax refund of $400
on Schedule 1 (Form 1040), line 1, and the bal-
ance of your recoveries, $525, on Schedule 1
(Form 1040), line 8z.
Standard deduction for earlier years. To de-
termine if amounts recovered in the current year
must be included in your income, you must
know the standard deduction for your filing sta-
tus for the year the deduction was claimed.
Look in the instructions for your tax return from
prior years to locate the standard deduction for
the filing status for that prior year.
Example. You filed a joint return on Form
1040 for 2020 with taxable income of $45,000.
Your itemized deductions were $24,950. The
standard deduction that you could have claimed
was $24,800. In 2021, you recovered $2,100 of
your 2020 itemized deductions. None of the re-
coveries were more than the actual deductions
for 2020. Include $150 of the recoveries in your
2021 income. This is the smaller of your recov-
eries ($2,100) or the amount by which your
itemized deductions were more than the stand-
ard deduction ($24,950 − $24,800 = $150).
Recovery limited to deduction. You don’t in-
clude in your income any amount of your recov-
ery that’s more than the amount you deducted
in the earlier year. The amount you include in
your income is limited to the smaller of:
• The amount deducted on Schedule A
(Form 1040), or
• The amount recovered.
Example. During 2020, you paid $1,700 for
medical expenses. Of this amount, you deduc-
ted $200 on your 2020 Schedule A (Form
1040). In 2021, you received a $500 reimburse-
ment from your medical insurance for your 2020
expenses. The only amount of the $500 reim-
bursement that must be included in your in-
come for 2021 is $200—the amount actually
deducted.
Other recoveries. See Recoveries in Pub.
525 if:
• You have recoveries of items other than
itemized deductions, or
• You received a recovery for an item for
which you claimed a tax credit (other than
investment credit or foreign tax credit) in a
prior year.
Rents From Personal
Property
If you rent out personal property, such as equip-
ment or vehicles, how you report your income
and expenses is in most cases determined by:
• Whether or not the rental activity is a busi-
ness, and
• Whether or not the rental activity is con-
ducted for profit.
In most cases, if your primary purpose is in-
come or profit and you’re involved in the rental
activity with continuity and regularity, your rental
activity is a business. See Pub. 535, Business
Expenses, for details on deducting expenses
for both business and not-for-profit activities.
Reporting business income and expenses.
If you’re in the business of renting personal
property, report your income and expenses on
Schedule C (Form 1040). The form instructions
have information on how to complete them.
Reporting nonbusiness income. If you aren’t
in the business of renting personal property, re-
port your rental income on Schedule 1 (Form
1040), line 8k.
Reporting nonbusiness expenses. If you
rent personal property for profit, include your
rental expenses in the total amount you enter
on Schedule 1 (Form 1040), line 24b, and see
the instructions there.
If you don’t rent personal property for profit,
your deductions are limited and you can’t report
a loss to offset other income. See Activity not
for profit under Other Income, later.
Repayments
If you had to repay an amount that you included
in your income in an earlier year, you may be
able to deduct the amount repaid from your in-
come for the year in which you repaid it. Or, if
the amount you repaid is more than $3,000, you
may be able to take a credit against your tax for
the year in which you repaid it. Generally, you
can claim a deduction or credit only if the repay-
ment qualifies as an expense or loss incurred in
your trade or business or in a for-profit transac-
tion.
Type of deduction. The type of deduction
you’re allowed in the year of repayment de-
pends on the type of income you included in the
earlier year. You generally deduct the repay-
ment on the same form or schedule on which
you previously reported it as income. For exam-
ple, if you reported it as self-employment in-
come, deduct it as a business expense on
Schedule C (Form 1040) or Schedule F (Form
1040). If you reported it as a capital gain, de-
duct it as a capital loss as explained in the In-
structions for Schedule D (Form 1040). If you
reported it as wages, unemployment compen-
sation, or other nonbusiness income, you may
be able to deduct it as an other itemized deduc-
tion if the amount repaid is over $3,000.
Page 70 Chapter 8 Other Income
Beginning in 2018, you can no longer
claim any miscellaneous itemized de-
ductions, so if the amount repaid was
$3,000 or less, you are not able to deduct it
from your income in the year you repaid it.
Repaid social security benefits. If you repaid
social security benefits or equivalent railroad re-
tirement benefits, see Repayment of benefits in
chapter 7.
Repayment of $3,000 or less. If the amount
you repaid was $3,000 or less, deduct it from
your income in the year you repaid it.
Repayment over $3,000. If the amount you
repaid was more than $3,000, you can deduct
the repayment as an other itemized deduction
on Schedule A (Form 1040), line 16, if you in-
cluded the income under a claim of right. This
means that at the time you included the income,
it appeared that you had an unrestricted right to
it. However, you can choose to take a credit for
the year of repayment. Figure your tax under
both methods and compare the results. Use the
method (deduction or credit) that results in less
tax.
When determining whether the amount
you repaid was more or less than
$3,000, consider the total amount be-
ing repaid on the return. Each instance of re-
payment isn’t considered separately.
Method 1. Figure your tax for 2021 claiming
a deduction for the repaid amount. If you deduct
it as an other itemized deduction, enter it on
Schedule A (Form 1040), line 16.
Method 2. Figure your tax for 2021 claiming
a credit for the repaid amount. Follow these
steps.
1. Figure your tax for 2021 without deducting
the repaid amount.
2. Refigure your tax from the earlier year
without including in income the amount
you repaid in 2021.
3. Subtract the tax in (2) from the tax shown
on your return for the earlier year. This is
the credit.
4. Subtract the answer in (3) from the tax for
2021 figured without the deduction (step
1).
If method 1 results in less tax, deduct the
amount repaid. If method 2 results in less tax,
claim the credit figured in (3) above on Sched-
ule 3 (Form 1040), line 13d, by adding the
amount of the credit to any other credits on this
line, and see the instructions there.
An example of this computation can be
found in Pub. 525.
Repaid wages subject to social security
and Medicare taxes. If you had to repay an
amount that you included in your wages or com-
pensation in an earlier year on which social se-
curity, Medicare, or tier 1 RRTA taxes were
paid, ask your employer to refund the excess
amount to you. If the employer refuses to refund
the taxes, ask for a statement indicating the
amount of the overcollection to support your
claim. File a claim for refund using Form 843,
Claim for Refund and Request for Abatement.CAUTION
!CAUTION
!
Repaid wages subject to Additional Medi-
care Tax. Employers can’t make an adjust-
ment or file a claim for refund for Additional
Medicare Tax withholding when there is a re-
payment of wages received by an employee in
a prior year because the employee determines
liability for Additional Medicare Tax on the em-
ployee's income tax return for the prior year. If
you had to repay an amount that you included in
your wages or compensation in an earlier year,
and on which Additional Medicare Tax was
paid, you may be able to recover the Additional
Medicare Tax paid on the amount. To recover
Additional Medicare Tax on the repaid wages or
compensation, you must file Form 1040-X for
the prior year in which the wages or compensa-
tion was originally received. See the Instruc-
tions for Form 1040-X.
Royalties
Royalties from copyrights, patents, and oil, gas,
and mineral properties are taxable as ordinary
income.
In most cases, you report royalties in Part I
of Schedule E (Form 1040). However, if you
hold an operating oil, gas, or mineral interest or
are in business as a self-employed writer, in-
ventor, artist, etc., report your income and ex-
penses on Schedule C (Form 1040).
Copyrights and patents. Royalties from
copyrights on literary, musical, or artistic works,
and similar property, or from patents on inven-
tions, are amounts paid to you for the right to
use your work over a specified period of time.
Royalties are generally based on the number of
units sold, such as the number of books, tickets
to a performance, or machines sold.
Oil, gas, and minerals. Royalty income from
oil, gas, and mineral properties is the amount
you receive when natural resources are extrac-
ted from your property. The royalties are based
on units, such as barrels, tons, etc., and are
paid to you by a person or company that leases
the property from you.
Depletion. If you’re the owner of an eco-
nomic interest in mineral deposits or oil and gas
wells, you can recover your investment through
the depletion allowance. For information on this
subject, see chapter 9 of Pub. 535.
Coal and iron ore. Under certain circum-
stances, you can treat amounts you receive
from the disposal of coal and iron ore as pay-
ments from the sale of a capital asset, rather
than as royalty income. For information about
gain or loss from the sale of coal and iron ore,
see chapter 2 of Pub. 544.
Sale of property interest. If you sell your
complete interest in oil, gas, or mineral rights,
the amount you receive is considered payment
for the sale of property used in a trade or busi-
ness under section 1231, not royalty income.
Under certain circumstances, the sale is subject
to capital gain or loss treatment as explained in
the Instructions for Schedule D (Form 1040).
For more information on selling section 1231
property, see chapter 3 of Pub. 544.
If you retain a royalty, an overriding royalty,
or a net profit interest in a mineral property for
the life of the property, you have made a lease
or a sublease, and any cash you receive for the
assignment of other interests in the property is
ordinary income subject to a depletion allow-
ance.
Part of future production sold. If you own
mineral property but sell part of the future pro-
duction, in most cases you treat the money you
receive from the buyer at the time of the sale as
a loan from the buyer. Don’t include it in your in-
come or take depletion based on it.
When production begins, you include all the
proceeds in your income, deduct all the produc-
tion expenses, and deduct depletion from that
amount to arrive at your taxable income from
the property.
Unemployment
Benefits
The tax treatment of unemployment benefits
you receive depends on the type of program
paying the benefits.
Unemployment compensation. You must in-
clude in income all unemployment compensa-
tion you receive. You should receive a Form
1099-G showing in box 1 the total unemploy-
ment compensation paid to you. In most cases,
you enter unemployment compensation on
Schedule 1 (Form 1040), line 7.
If you received unemployment com-
pensation but did not receive Form
1099-G through the mail, you may
need to access your information through your
state’s website to get your electronic Form
1099-G.
Types of unemployment compensation.
Unemployment compensation generally in-
cludes any amount received under an unem-
ployment compensation law of the United
States or of a state. It includes the following
benefits.
• Benefits paid by a state or the District of
Columbia from the Federal Unemployment
Trust Fund.
• State unemployment insurance benefits.
• Railroad unemployment compensation
benefits.
• Disability payments from a government
program paid as a substitute for unemploy-
ment compensation. (Amounts received as
workers' compensation for injuries or ill-
ness aren’t unemployment compensation.
See chapter 5 for more information.)
• Trade readjustment allowances under the
Trade Act of 1974.
• Unemployment assistance under the Dis-
aster Relief and Emergency Assistance
Act.
• Unemployment assistance under the Air-
line Deregulation Act of 1978 Program.
Governmental program. If you contribute
to a governmental unemployment compensa-
tion program and your contributions aren’t de-
ductible, amounts you receive under the pro-
gram aren’t included as unemploymentCAUTION
!
Chapter 8 Other Income Page 71
compensation until you recover your contribu-
tions. If you deducted all of your contributions to
the program, the entire amount you receive un-
der the program is included in your income.
Repayment of unemployment compensa-
tion. If you repaid in 2021 unemployment com-
pensation you received in 2021, subtract the
amount you repaid from the total amount you
received and enter the difference on Schedule
1 (Form 1040), line 7. On the dotted line next to
your entry, enter “Repaid” and the amount you
repaid. If you repaid unemployment compensa-
tion in 2021 that you included in income in an
earlier year, you can deduct the amount repaid
on Schedule A (Form 1040), line 16, if you item-
ize deductions and the amount is more than
$3,000. See Repayments, earlier.
Tax withholding. You can choose to have
federal income tax withheld from your unem-
ployment compensation. To make this choice,
complete Form W-4V, Voluntary Withholding
Request, and give it to the paying office. Tax
will be withheld at 10% of your payment.
If you don’t choose to have tax withheld
from your unemployment compensa-
tion, you may be liable for estimated
tax. If you don’t pay enough tax, either through
withholding or estimated tax, or a combination
of both, you may have to pay a penalty. For
more information on estimated tax, see chap-
ter 4.
Supplemental unemployment benefits.
Benefits received from an employer-financed
fund (to which the employees didn’t contribute)
aren’t unemployment compensation. They are
taxable as wages. For more information, see
Supplemental Unemployment Benefits in sec-
tion 5 of Pub. 15-A, Employer's Supplemental
Tax Guide. Report these payments on line 1 of
Form 1040 or 1040-SR.
Repayment of benefits. You may have to
repay some of your supplemental unemploy-
ment benefits to qualify for trade readjustment
allowances under the Trade Act of 1974. If you
repay supplemental unemployment benefits in
the same year you receive them, reduce the to-
tal benefits by the amount you repay. If you re-
pay the benefits in a later year, you must in-
clude the full amount of the benefits received in
your income for the year you received them.
Deduct the repayment in the later year as an
adjustment to gross income on Form 1040 or
1040-SR. Include the repayment on Schedule 1
(Form 1040), line 24e, and see the instructions
there. If the amount you repay in a later year is
more than $3,000, you may be able to take a
credit against your tax for the later year instead
of deducting the amount repaid. For more infor-
mation on this, see Repayments, earlier.
Private unemployment fund. Unemployment
benefit payments from a private (nonunion)
fund to which you voluntarily contribute are tax-
able only if the amounts you receive are more
than your total payments into the fund. Report
the taxable amount on Schedule 1 (Form 1040),
line 8z.
Payments by a union. Benefits paid to you as
an unemployed member of a union from regular
union dues are included in your income on
Schedule 1 (Form 1040), line 8z. However, ifCAUTION
!
you contribute to a special union fund and your
payments to the fund aren’t deductible, the un-
employment benefits you receive from the fund
are includible in your income only to the extent
they’re more than your contributions.
Guaranteed annual wage. Payments you re-
ceive from your employer during periods of un-
employment, under a union agreement that
guarantees you full pay during the year, are tax-
able as wages. Include them on line 1 of Form
1040 or 1040-SR.
State employees. Payments similar to a
state's unemployment compensation may be
made by the state to its employees who aren’t
covered by the state's unemployment compen-
sation law. Although the payments are fully tax-
able, don’t report them as unemployment com-
pensation. Report these payments on Schedule
1 (Form 1040), line 8z.
Welfare and Other
Public Assistance
Benefits
Don’t include in your income governmental ben-
efit payments from a public welfare fund based
upon need, such as payments to blind individu-
als under a state public assistance law. Pay-
ments from a state fund for the victims of crime
shouldn’t be included in the victims' incomes if
they’re in the nature of welfare payments. Don’t
deduct medical expenses that are reimbursed
by such a fund. You must include in your in-
come any welfare payments that are compen-
sation for services or that are obtained fraudu-
lently.
Reemployment Trade Adjustment Assis-
tance (RTAA) payments. RTAA payments
received from a state must be included in your
income. The state must send you Form 1099-G
to advise you of the amount you should include
in income. The amount should be reported on
Schedule 1 (Form 1040), line 8z.
Persons with disabilities. If you have a disa-
bility, you must include in income compensation
you receive for services you perform unless the
compensation is otherwise excluded. However,
you don’t include in income the value of goods,
services, and cash that you receive, not in re-
turn for your services, but for your training and
rehabilitation because you have a disability. Ex-
cludable amounts include payments for trans-
portation and attendant care, such as inter-
preter services for the deaf, reader services for
the blind, and services to help individuals with
an intellectual disability do their work.
Disaster relief grants. Don’t include post-dis-
aster grants received under the Robert T. Staf-
ford Disaster Relief and Emergency Assistance
Act in your income if the grant payments are
made to help you meet necessary expenses or
serious needs for medical, dental, housing, per-
sonal property, transportation, childcare, or fu-
neral expenses. Don’t deduct casualty losses or
medical expenses that are specifically reim-
bursed by these disaster relief grants. If you
have deducted a casualty loss for the loss of
your personal residence and you later receive a
disaster relief grant for the loss of the same res-
idence, you may have to include part or all of
the grant in your taxable income. See Recover-
ies, earlier. Unemployment assistance pay-
ments under the Act are taxable unemployment
compensation. See Unemployment compensa-
tion under Unemployment Benefits, earlier.
Disaster relief payments. You can exclude
from income any amount you receive that’s a
qualified disaster relief payment. A qualified dis-
aster relief payment is an amount paid to you:
1. To reimburse or pay reasonable and nec-
essary personal, family, living, or funeral
expenses that result from a qualified dis-
aster;
2. To reimburse or pay reasonable and nec-
essary expenses incurred for the repair or
rehabilitation of your home or repair or re-
placement of its contents to the extent it’s
due to a qualified disaster;
3. By a person engaged in the furnishing or
sale of transportation as a common carrier
because of the death or personal physical
injuries incurred as a result of a qualified
disaster; or
4. By a federal, state, or local government,
agency, or instrumentality in connection
with a qualified disaster in order to pro-
mote the general welfare.
You can exclude this amount only to the extent
any expense it pays for isn’t paid for by insur-
ance or otherwise. The exclusion doesn’t apply
if you were a participant or conspirator in a ter-
rorist action or a representative of one.
A qualified disaster is:
• A disaster which results from a terrorist or
military action;
• A federally declared disaster; or
• A disaster which results from an accident
involving a common carrier, or from any
other event, which is determined to be
catastrophic by the Secretary of the Treas-
ury or his or her delegate.
For amounts paid under item (4) above, a
disaster is qualified if it’s determined by an ap-
plicable federal, state, or local authority to war-
rant assistance from the federal, state, or local
government, agency, or instrumentality.
Disaster mitigation payments. You can ex-
clude from income any amount you receive
that’s a qualified disaster mitigation payment.
Qualified disaster mitigation payments are most
commonly paid to you in the period immediately
following damage to property as a result of a
natural disaster. However, disaster mitigation
payments are used to mitigate (reduce the se-
verity of) potential damage from future natural
disasters. They’re paid to you through state and
local governments based on the provisions of
the Robert T. Stafford Disaster Relief and
Emergency Assistance Act or the National
Flood Insurance Act.
You can’t increase the basis or adjusted ba-
sis of your property for improvements made
with nontaxable disaster mitigation payments.
Home Affordable Modification Program
(HAMP). If you benefit from Pay-for-Perform-
ance Success Payments under HAMP, the pay-
ments aren’t taxable.
Page 72 Chapter 8 Other Income
Mortgage assistance payments under sec-
tion 235 of the National Housing Act. Pay-
ments made under section 235 of the National
Housing Act for mortgage assistance aren’t in-
cluded in the homeowner's income. Interest
paid for the homeowner under the mortgage as-
sistance program can’t be deducted.
Medicare. Medicare benefits received under ti-
tle XVIII of the Social Security Act aren’t includi-
ble in the gross income of the individuals for
whom they’re paid. This includes basic (Part A
(Hospital Insurance Benefits for the Aged)) and
supplementary (Part B (Supplementary Medical
Insurance Benefits for the Aged)).
Social security benefits (including
lump-sum payments attributable to prior
years), Supplemental Security Income (SSI)
benefits, and lump-sum death benefits. The
Social Security Administration (SSA) provides
benefits such as old-age benefits, benefits to
disabled workers, and benefits to spouses and
dependents. These benefits may be subject to
federal income tax depending on your filing sta-
tus and other income. See chapter 7 in this pub-
lication and Pub. 915, Social Security and
Equivalent Railroad Retirement Benefits, for
more information. An individual originally de-
nied benefits, but later approved, may receive a
lump-sum payment for the period when benefits
were denied (which may be prior years). See
Pub. 915 for information on how to make a
lump-sum election, which may reduce your tax
liability. There are also other types of benefits
paid by the SSA. However, SSI benefits and
lump-sum death benefits (one-time payment to
spouse and children of deceased) aren’t sub-
ject to federal income tax. For more information
on these benefits, go to SSA.gov.
Nutrition Program for the Elderly. Food ben-
efits you receive under the Nutrition Program for
the Elderly aren’t taxable. If you prepare and
serve free meals for the program, include in
your income as wages the cash pay you re-
ceive, even if you’re also eligible for food bene-
fits.
Payments to reduce cost of winter energy.
Payments made by a state to qualified people
to reduce their cost of winter energy use aren’t
taxable.
Other Income
The following brief discussions are arranged in
alphabetical order. Other income items briefly
discussed below are referenced to publications
which provide more topical information.
Activity not for profit. You must include on
your return income from an activity from which
you don’t expect to make a profit. An example
of this type of activity is a hobby or a farm you
operate mostly for recreation and pleasure. En-
ter this income on Schedule 1 (Form 1040),
line 8z. Deductions for expenses related to the
activity are limited. They can’t total more than
the income you report and can be taken only if
you itemize deductions on Schedule A (Form
1040). See Not-for-Profit Activities in chapter 1
of Pub. 535 for information on whether an activ-
ity is considered carried on for a profit.
Alaska Permanent Fund dividend. If you re-
ceived a payment from Alaska's mineral income
fund (Alaska Permanent Fund dividend), report
it as income on Schedule 1 (Form 1040), line 8f.
The state of Alaska sends each recipient a
document that shows the amount of the pay-
ment with the check. The amount is also repor-
ted to the IRS.
Alimony. Include in your income on Schedule
1 (Form 1040), line 2a, any taxable alimony
payments you receive. Amounts you receive for
child support aren’t income to you. Alimony and
child support payments are discussed in Pub.
504.
Don’t include alimony payments you
receive under a divorce or separation
agreement (1) executed after 2018, or
(2) executed before 2019 but later modified if
the modification expressly states the repeal of
the deduction for alimony payments applies to
the modification.
Bribes. If you receive a bribe, include it in your
income.
Campaign contributions. These contribu-
tions aren’t income to a candidate unless
they’re diverted to his or her personal use. To
be nontaxable, the contributions must be spent
for campaign purposes or kept in a fund for use
in future campaigns. However, interest earned
on bank deposits, dividends received on con-
tributed securities, and net gains realized on
sales of contributed securities are taxable and
must be reported on Form 1120-POL, U.S. In-
come Tax Return for Certain Political Organiza-
tions. Excess campaign funds transferred to an
office account must be included in the office-
holder's income on Schedule 1 (Form 1040),
line 8z, in the year transferred.
Carpools. Don’t include in your income
amounts you receive from the passengers for
driving a car in a carpool to and from work.
These amounts are considered reimbursement
for your expenses. However, this rule doesn’t
apply if you have developed carpool arrange-
ments into a profit-making business of trans-
porting workers for hire.
Cash rebates. A cash rebate you receive from
a dealer or manufacturer of an item you buy
isn’t income, but you must reduce your basis by
the amount of the rebate.
Example. You buy a new car for $24,000
cash and receive a $2,000 rebate check from
the manufacturer. The $2,000 isn’t income to
you. Your basis in the car is $22,000. This is the
basis on which you figure gain or loss if you sell
the car and depreciation if you use it for busi-
ness.
Casualty insurance and other reimburse-
ments. You generally shouldn’t report these
reimbursements on your return unless you’re
figuring gain or loss from the casualty or theft.
See Pub. 547 for more information.
Child support payments. You shouldn’t re-
port these payments on your return. See Pub.
504 for more information.
Court awards and damages. To determine if
settlement amounts you receive by compromise
or judgment must be included in your income,CAUTION
!
you must consider the item that the settlement
replaces. The character of the income as ordi-
nary income or capital gain depends on the na-
ture of the underlying claim. Include the follow-
ing as ordinary income.
1. Interest on any award.
2. Compensation for lost wages or lost profits
in most cases.
3. Punitive damages, in most cases. It
doesn’t matter if they relate to a physical
injury or physical sickness.
4. Amounts received in settlement of pension
rights (if you didn’t contribute to the plan).
5. Damages for:
a. Patent or copyright infringement,
b. Breach of contract, or
c. Interference with business operations.
6. Back pay and damages for emotional dis-
tress received to satisfy a claim under title
VII of the Civil Rights Act of 1964.
7. Attorney fees and costs (including contin-
gent fees) where the underlying recovery
is included in gross income.
8. Attorney fees and costs relating to whistle-
blower awards where the underlying re-
covery is included in gross income.
Don’t include in your income compensatory
damages for personal physical injury or physi-
cal sickness (whether received in a lump sum or
installments).
Emotional distress. Emotional distress it-
self isn’t a physical injury or physical sickness,
but damages you receive for emotional distress
due to a physical injury or sickness are treated
as received for the physical injury or sickness.
Don’t include them in your income.
If the emotional distress is due to a personal
injury that isn’t due to a physical injury or sick-
ness (for example, employment discrimination
or injury to reputation), you must include the
damages in your income, except for any dam-
ages that aren’t more than amounts paid for
medical care due to that emotional distress.
Emotional distress includes physical symptoms
that result from emotional distress, such as
headaches, insomnia, and stomach disorders.
Credit card insurance. In most cases, if you
receive benefits under a credit card disability or
unemployment insurance plan, the benefits are
taxable to you. These plans make the minimum
monthly payment on your credit card account if
you can’t make the payment due to injury, ill-
ness, disability, or unemployment. Report on
Schedule 1 (Form 1040), line 8z, the amount of
benefits you received during the year that’s
more than the amount of the premiums you paid
during the year.
Down payment assistance. If you purchase a
home and receive assistance from a nonprofit
corporation to make the down payment, that as-
sistance isn’t included in your income. If the cor-
poration qualifies as a tax-exempt charitable or-
ganization, the assistance is treated as a gift
and is included in your basis of the house. If the
corporation doesn’t qualify, the assistance is
treated as a rebate or reduction of the purchase
price and isn’t included in your basis.
Chapter 8 Other Income Page 73
Employment agency fees. If you get a job
through an employment agency, and the fee is
paid by your employer, the fee isn’t includible in
your income if you aren’t liable for it. However, if
you pay it and your employer reimburses you
for it, it’s includible in your income.
Energy conservation subsidies. You can ex-
clude from gross income any subsidy provided,
either directly or indirectly, by public utilities for
the purchase or installation of an energy con-
servation measure for a dwelling unit.
Energy conservation measure. This in-
cludes installations or modifications that are pri-
marily designed to reduce consumption of elec-
tricity or natural gas, or improve the
management of energy demand.
Dwelling unit. This includes a house, apart-
ment, condominium, mobile home, boat, or sim-
ilar property. If a building or structure contains
both dwelling and other units, any subsidy must
be properly allocated.
Estate and trust income. An estate or trust,
unlike a partnership, may have to pay federal in-
come tax. If you’re a beneficiary of an estate or
trust, you may be taxed on your share of its in-
come distributed or required to be distributed to
you. However, there is never a double tax. Es-
tates and trusts file their returns on Form 1041,
U.S. Income Tax Return for Estates and Trusts,
and your share of the income is reported to you
on Schedule K-1 (Form 1041).
Current income required to be distrib-
uted. If you’re the beneficiary of an estate or
trust that must distribute all of its current in-
come, you must report your share of the distrib-
utable net income, whether or not you actually
received it.
Current income not required to be dis-
tributed. If you’re the beneficiary of an estate
or trust and the fiduciary has the choice of
whether to distribute all or part of the current in-
come, you must report:
• All income that’s required to be distributed
to you, whether or not it’s actually distrib-
uted, plus
• All other amounts actually paid or credited
to you,
up to the amount of your share of distributable
net income.
How to report. Treat each item of income
the same way that the estate or trust would treat
it. For example, if a trust's dividend income is
distributed to you, you report the distribution as
dividend income on your return. The same rule
applies to distributions of tax-exempt interest
and capital gains.
The fiduciary of the estate or trust must tell
you the type of items making up your share of
the estate or trust income and any credits
you’re allowed on your individual income tax re-
turn.
Losses. Losses of estates and trusts gener-
ally aren’t deductible by the beneficiaries.
Grantor trust. Income earned by a grantor
trust is taxable to the grantor, not the benefi-
ciary, if the grantor keeps certain control over
the trust. (The grantor is the one who transfer-
red property to the trust.) This rule applies if the
property (or income from the property) put into
the trust will or may revert (be returned) to the
grantor or the grantor's spouse.
Generally, a trust is a grantor trust if the
grantor has a reversionary interest valued (at
the date of transfer) at more than 5% of the
value of the transferred property.
Expenses paid by another. If your personal
expenses are paid for by another person, such
as a corporation, the payment may be taxable
to you depending upon your relationship with
that person and the nature of the payment. But
if the payment makes up for a loss caused by
that person, and only restores you to the posi-
tion you were in before the loss, the payment
isn’t includible in your income.
Fees for services. Include all fees for your
services in your income. Examples of these
fees are amounts you receive for services you
perform as:
• A corporate director;
• An executor, administrator, or personal
representative of an estate;
• A manager of a trade or business you op-
erated before declaring chapter 11 bank-
ruptcy;
• A notary public; or
• An election precinct official.
Nonemployee compensation. If you aren’t
an employee and the fees for your services
from a single payer in the course of the payer's
trade or business total $600 or more for the
year, the payer should send you a Form
1099-NEC. You may need to report your fees
as self-employment income. See Self-Em-
ployed Persons in chapter 1 for a discussion of
when you’re considered self-employed.
Corporate director. Corporate director fees
are self-employment income. Report these pay-
ments on Schedule C (Form 1040).
Personal representatives. All personal
representatives must include in their gross in-
come fees paid to them from an estate. If you
aren’t in the trade or business of being an exec-
utor (for instance, you’re the executor of a
friend's or relative's estate), report these fees
on Schedule 1 (Form 1040), line 8z. If you’re in
the trade or business of being an executor, re-
port these fees as self-employment income on
Schedule C (Form 1040). The fee isn’t includi-
ble in income if it’s waived.
Manager of trade or business for bank-
ruptcy estate. Include in your income all pay-
ments received from your bankruptcy estate for
managing or operating a trade or business that
you operated before you filed for bankruptcy.
Report this income on Schedule 1 (Form 1040),
line 8z.
Notary public. Report payments for these
services on Schedule C (Form 1040). These
payments aren’t subject to self-employment tax.
See the separate Instructions for Schedule SE
(Form 1040) for details.
Election precinct official. You should re-
ceive a Form W-2 showing payments for serv-
ices performed as an election official or election
worker. Report these payments on line 1 of
Form 1040 or 1040-SR.
Foster care providers. Generally, payment
you receive from a state, political subdivision, or
a qualified foster care placement agency for
caring for a qualified foster individual in your
home is excluded from your income. However,
you must include in your income payment to the
extent it’s received for the care of more than five
qualified foster individuals age 19 years or
older.
A qualified foster individual is a person who:
1. Is living in a foster family home; and
2. Was placed there by:
a. An agency of a state or one of its polit-
ical subdivisions, or
b. A qualified foster care placement
agency.
Difficulty-of-care payments. These are
payments that are designated by the payer as
compensation for providing the additional care
that’s required for physically, mentally, or emo-
tionally handicapped qualified foster individuals.
A state must determine that this compensation
is needed, and the care for which the payments
are made must be provided in the foster care
provider's home in which the qualified foster in-
dividual was placed.
Certain Medicaid waiver payments are trea-
ted as difficulty-of-care payments when re-
ceived by an individual care provider for caring
for an eligible individual living in the provider's
home. See Notice 2014-7, available at
IRS.gov/irb/2014-04_IRB#NOT-2014-7, and re-
lated questions and answers, available at
IRS.gov/Individuals/Certain-Medicaid-Waiver-
Payments-May-Be-Excludable-From-Income,
for more information.
You must include in your income diffi-
culty-of-care payments to the extent they’re re-
ceived for more than:
• 10 qualified foster individuals under age
19, or
• Five qualified foster individuals age 19 or
older.
Maintaining space in home. If you’re paid
to maintain space in your home for emergency
foster care, you must include the payment in
your income.
Reporting taxable payments. If you re-
ceive payments that you must include in your
income and you’re in business as a foster care
provider, report the payments on Schedule C
(Form 1040). See Pub. 587, Business Use of
Your Home, to help you determine the amount
you can deduct for the use of your home.
Found property. If you find and keep property
that doesn’t belong to you that has been lost or
abandoned (treasure trove), it’s taxable to you
at its fair market value in the first year it’s your
undisputed possession.
Free tour. If you received a free tour from a
travel agency for organizing a group of tourists,
you must include its value in your income. Re-
port the fair market value of the tour on Sched-
ule 1 (Form 1040), line 8z, if you aren’t in the
trade or business of organizing tours. You can’t
deduct your expenses in serving as the volun-
tary leader of the group at the group's request. If
you organize tours as a trade or business,
Page 74 Chapter 8 Other Income
report the tour's value on Schedule C (Form
1040).
Gambling winnings. You must include your
gambling winnings in income on Schedule 1
(Form 1040), line 8b. Winnings from fantasy
sports leagues are gambling winnings. If you
itemize your deductions on Schedule A (Form
1040), you can deduct gambling losses you had
during the year, but only up to the amount of
your winnings. If you’re in the trade or business
of gambling, use Schedule C (Form 1040).
Lotteries and raffles. Winnings from lotter-
ies and raffles are gambling winnings. In addi-
tion to cash winnings, you must include in your
income the fair market value of bonds, cars,
houses, and other noncash prizes.
If you win a state lottery prize payable
in installments, see Pub. 525 for more
information.
Form W-2G. You may have received a Form
W-2G, Certain Gambling Winnings, showing
the amount of your gambling winnings and any
tax taken out of them. Include the amount from
box 1 on Schedule 1 (Form 1040), line 8b. In-
clude the amount shown in box 4 on Form 1040
or 1040-SR, line 25c, as federal income tax
withheld.
Reporting winnings and recordkeeping.
For more information on reporting gambling
winnings and recordkeeping, see Gambling
Losses up to the Amount of Gambling Winnings
in chapter 12.
Gifts and inheritances. In most cases, prop-
erty you receive as a gift, bequest, or inheri-
tance isn’t included in your income. However, if
property you receive this way later produces in-
come such as interest, dividends, or rents, that
income is taxable to you. If property is given to
a trust and the income from it is paid, credited,
or distributed to you, that income is also taxable
to you. If the gift, bequest, or inheritance is the
income from the property, that income is taxa-
ble to you.
Inherited pension or individual retire-
ment arrangement (IRA). If you inherited a
pension or an IRA, you may have to include part
of the inherited amount in your income. See
Survivors and Beneficiaries in Pub. 575 if you
inherited a pension. See What if You Inherit an
IRA? in Pubs. 590-A and 590-B if you inherited
an IRA.
Hobby losses. Losses from a hobby aren’t de-
ductible from other income. A hobby is an activ-
ity from which you don’t expect to make a profit.
See Activity not for profit, earlier.
If you collect stamps, coins, or other
items as a hobby for recreation and
pleasure, and you sell any of the items,
your gain is taxable as a capital gain. (See Pub.
550.) However, if you sell items from your col-
lection at a loss, you can’t deduct the loss.
Illegal activities. Income from illegal activities,
such as money from dealing illegal drugs, must
be included in your income on Schedule 1
(Form 1040), line 8z, or on Schedule C (Form
1040) if from your self-employment activity.TIPCAUTION
!
Indian fishing rights. If you’re a member of a
qualified Indian tribe that has fishing rights se-
cured by treaty, executive order, or an Act of
Congress as of March 17, 1988, don’t include in
your income amounts you receive from activi-
ties related to those fishing rights. The income
isn’t subject to income tax, self-employment
tax, or employment taxes.
Interest on frozen deposits. In general, you
exclude from your income the amount of inter-
est earned on a frozen deposit. See Interest in-
come on frozen deposits in chapter 6.
Interest on qualified savings bonds. You
may be able to exclude from income the interest
from qualified U.S. savings bonds you redeem if
you pay qualified higher education expenses in
the same year. For more information on this ex-
clusion, see Education Savings Bond Program
under U.S. Savings Bonds in chapter 6.
Job interview expenses. If a prospective em-
ployer asks you to appear for an interview and
either pays you an allowance or reimburses you
for your transportation and other travel expen-
ses, the amount you receive is generally not
taxable. You include in income only the amount
you receive that’s more than your actual expen-
ses.
Jury duty. Jury duty pay you receive must be
included in your income on Schedule 1 (Form
1040), line 8g. If you gave any of your jury duty
pay to your employer because your employer
continued to pay you while you served jury duty,
include the amount you gave your employer as
an income adjustment on Schedule 1 (Form
1040), line 24a, and see the instructions there.
Kickbacks. You must include kickbacks, side
commissions, push money, or similar payments
you receive in your income on Schedule 1
(Form 1040), line 8z, or on Schedule C (Form
1040) if from your self-employment activity.
Example. You sell cars and help arrange
car insurance for buyers. Insurance brokers pay
back part of their commissions to you for refer-
ring customers to them. You must include the
kickbacks in your income.
Medical savings accounts (Archer MSAs
and Medicare Advantage MSAs). In most ca-
ses, you don’t include in income amounts you
withdraw from your Archer MSA or Medicare
Advantage MSA if you use the money to pay for
qualified medical expenses. Generally, qualified
medical expenses are those you can deduct on
Schedule A (Form 1040). For more information
about qualified medical expenses, see Pub.
502. For more information about Archer MSAs
or Medicare Advantage MSAs, see Pub. 969,
Health Savings Accounts and Other Tax-Fa-
vored Health Plans.
Prizes and awards. If you win a prize in a
lucky number drawing, television or radio quiz
program, beauty contest, or other event, you
must include it in your income. For example, if
you win a $50 prize in a photography contest,
you must report this income on Schedule 1
(Form 1040), line 8h. If you refuse to accept a
prize, don’t include its value in your income.
Prizes and awards in goods or services
must be included in your income at their fair
market value.
Employee awards or bonuses. Cash
awards or bonuses given to you by your em-
ployer for good work or suggestions must gen-
erally be included in your income as wages.
However, certain noncash employee achieve-
ment awards can be excluded from income.
See Bonuses and awards in chapter 5.
Pulitzer, Nobel, and similar prizes. If you
were awarded a prize in recognition of accom-
plishments in religious, charitable, scientific, ar-
tistic, educational, literary, or civic fields, you
must generally include the value of the prize in
your income. However, you don’t include this
prize in your income if you meet all of the follow-
ing requirements.
• You were selected without any action on
your part to enter the contest or proceed-
ing.
• You aren’t required to perform substantial
future services as a condition to receiving
the prize or award.
• The prize or award is transferred by the
payer directly to a governmental unit or
tax-exempt charitable organization as des-
ignated by you.
See Pub. 525 for more information about the
conditions that apply to the transfer.
Qualified Opportunity Fund (QOF). Effective
December 22, 2017, Code section 1400Z-2
provides a temporary deferral on inclusion in
gross income for capital gains invested in
QOFs, and permanent exclusion of capital
gains from the sale or exchange of an invest-
ment in the QOF if the investment is held for at
least 10 years. See the Instructions for Form
8949 on how to report your election to defer eli-
gible gains invested in a QOF. See the instruc-
tions for Form 8997, Initial and Annual State-
ment of Qualified Opportunity Fund (QOF)
Investments, for reporting information. For addi-
tional information, see Opportunity Zones Fre-
quently Asked Questions at IRS.gov/
Newsroom/Opportunity-Zones-Frequently-
Asked-Questions.
Qualified tuition programs (QTPs). A QTP
(also known as a 529 program) is a program set
up to allow you to either prepay or contribute to
an account established for paying a student's
qualified higher education expenses at an eligi-
ble educational institution. A program can be
established and maintained by a state, an
agency or instrumentality of a state, or an eligi-
ble educational institution.
The part of a distribution representing the
amount paid or contributed to a QTP isn’t inclu-
ded in income. This is a return of the investment
in the program.
In most cases, the beneficiary doesn’t in-
clude in income any earnings distributed from a
QTP if the total distribution is less than or equal
to adjusted qualified higher education expen-
ses. See Pub. 970 for more information.
Railroad retirement annuities. The following
types of payments are treated as pension or an-
nuity income and are taxable under the rules
explained in Pub. 575, Pension and Annuity In-
come.
• Tier 1 railroad retirement benefits that are
more than the social security equivalent
benefit.
Chapter 8 Other Income Page 75
• Tier 2 benefits.
• Vested dual benefits.
Rewards. If you receive a reward for providing
information, include it in your income.
Sale of home. You may be able to exclude
from income all or part of any gain from the sale
or exchange of your main home. See Pub. 523.
Sale of personal items. If you sold an item
you owned for personal use, such as a car, re-
frigerator, furniture, stereo, jewelry, or silver-
ware, your gain is taxable as a capital gain. Re-
port it as explained in the Instructions for
Schedule D (Form 1040). You can’t deduct a
loss.
However, if you sold an item you held for in-
vestment, such as gold or silver bullion, coins,
or gems, any gain is taxable as a capital gain
and any loss is deductible as a capital loss.
Example. You sold a painting on an online
auction website for $100. You bought the paint-
ing for $20 at a garage sale years ago. Report
your gain as a capital gain as explained in the
Instructions for Schedule D (Form 1040).
Scholarships and fellowships. A candidate
for a degree can exclude amounts received as
a qualified scholarship or fellowship. A qualified
scholarship or fellowship is any amount you re-
ceive that’s for:
• Tuition and fees to enroll at or attend an
educational institution; or
• Fees, books, supplies, and equipment re-
quired for courses at the educational insti-
tution.
Amounts used for room and board don’t qualify
for the exclusion. See Pub. 970 for more infor-
mation on qualified scholarships and fellowship
grants.
Payment for services. In most cases, you
must include in income the part of any scholar-
ship or fellowship that represents payment for
past, present, or future teaching, research, or
other services. This applies even if all candi-
dates for a degree must perform the services to
receive the degree.
For information about the rules that apply to
a tax-free qualified tuition reduction provided to
employees and their families by an educational
institution, see Pub. 970.
Department of Veterans Affairs (VA) pay-
ments. Allowances paid by the VA aren’t inclu-
ded in your income. These allowances aren’t
considered scholarship or fellowship grants.
Prizes. Scholarship prizes won in a contest
aren’t scholarships or fellowships if you don’t
have to use the prizes for educational purpo-
ses. You must include these amounts in your in-
come on Schedule 1 (Form 1040), line 8h,
whether or not you use the amounts for educa-
tional purposes.
Sharing/gig economy. Generally, if you work
in the gig economy or did gig work, you must in-
clude all income received from all jobs whether
you received a Form 1099-K, Payment Card
and Third-Party Network Transactions, or not.
See the Instructions for Schedule C (Form
1040) and the Instructions for Schedule SE
(Form 1040).
Stolen property. If you steal property, you
must report its fair market value in your income
in the year you steal it unless you return it to its
rightful owner in the same year.
Transporting school children. Don’t include
in your income a school board mileage allow-
ance for taking children to and from school if
you aren’t in the business of taking children to
school. You can’t deduct expenses for provid-
ing this transportation.
Union benefits and dues. Amounts deducted
from your pay for union dues, assessments,
contributions, or other payments to a union
can’t be excluded from your income.
Strike and lockout benefits. Benefits paid
to you by a union as strike or lockout benefits,
including both cash and the fair market value of
other property, are usually included in your in-
come as compensation. You can exclude these
benefits from your income only when the facts
clearly show that the union intended them as
gifts to you.
Utility rebates. If you’re a customer of an elec-
tric utility company and you participate in the
utility's energy conservation program, you may
receive on your monthly electric bill either:
• A reduction in the purchase price of elec-
tricity furnished to you (rate reduction), or
• A nonrefundable credit against the pur-
chase price of the electricity.
The amount of the rate reduction or nonrefund-
able credit isn’t included in your income.
9.
Individual
Retirement
Arrangements
(IRAs)
What’s New
Modified AGI limit for traditional IRA contri-
butions. For 2021, if you are covered by a re-
tirement plan at work, your deduction for contri-
butions to a traditional IRA is reduced (phased
out) if your modified AGI is:
• More than $105,000 but less than
$125,000 for a married couple filing a joint
return or a qualifying widow(er),
• More than $66,000 but less than $76,000
for a single individual or head of house-
hold, or
• Less than $10,000 for a married individual
filing a separate return.
If you either live with your spouse or file a joint
return, and your spouse is covered by a retire-
ment plan at work but you aren’t, your deduc-
tion is phased out if your modified AGI is more
than $198,000 but less than $208,000. If your
modified AGI is $208,000 or more, you can’t
take a deduction for contributions to a tradi-
tional IRA. See How Much Can You Deduct,
later.
Modified AGI limit for Roth IRA contribu-
tions. For 2021, your Roth IRA contribution
limit is reduced (phased out) in the following sit-
uations.
• Your filing status is married filing jointly or
qualifying widow(er) and your modified AGI
is at least $198,000. You can’t make a
Roth IRA contribution if your modified AGI
is $208,000 or more.
• Your filing status is single, head of house-
hold, or married filing separately and you
didn’t live with your spouse at any time in
2021 and your modified AGI is at least
$125,000. You can’t make a Roth IRA con-
tribution if your modified AGI is $140,000
or more.
• Your filing status is married filing sepa-
rately, you lived with your spouse at any
time during the year, and your modified
AGI is more than zero. You can’t make a
Roth IRA contribution if your modified AGI
is $10,000 or more.
See Can You Contribute to a Roth IRA, later.
2022 modified AGI limits. You can find infor-
mation about the 2022 contribution and AGI lim-
its in Pub. 590-A.
Reminders
Qualified disaster tax relief. Special rules
provide for tax-favored withdrawals and repay-
ments from certain retirement plans for taxpay-
ers who suffered an economic loss as a result
of a qualified disaster. A qualified disaster in-
cludes a major disaster that was declared by
Presidential Declaration that is dated between
January 1, 2020, and February 25, 2021 (inclu-
sive). However, in order to qualify under the lat-
est legislation, the major disaster must have an
incident period beginning between December
28, 2019, and December 27, 2020 (inclusive).
Also, a qualified disaster loss does not include
any disaster that has been declared only by
reason of COVID-19. See Form 8915-F, Quali-
fied Disaster Plan Distributions and Repay-
ments, for more information.
See Pub. 590-B, Distributions from Individ-
ual Retirement Arrangements (IRAs), for more
information.
Maximum age for making traditional IRA
contributions repealed. For tax years begin-
ning after 2019, there is no age limit on making
contributions to your traditional IRA. For more
information, see Pub. 590-A.
Required minimum distributions (RMDs).
For distributions required to be made after tax
year 2019, the age for the required beginning
date for mandatory distributions is changed to
age 72 for taxpayers reaching age 701/2 after
2019.
Page 76 Chapter 9 Individual Retirement Arrangements (IRAs)
Contributions to both traditional and Roth
IRAs. For information on your combined contri-
bution limit if you contribute to both traditional
and Roth IRAs, see Roth IRAs and traditional
IRAs, later.
Extended rollover period for qualified plan
loan offsets in 2018 or later. For distribu-
tions made in tax years after tax year 2017, you
have until the due date (including extensions)
for your tax return for the tax year in which the
offset occurs to rollover a qualified plan loan off-
set amount. For more information, see Pub.
590-A.
No recharacterizations of conversions
made in 2018 or later. A conversion of a tra-
ditional IRA to a Roth IRA, and a rollover from
any other eligible retirement plan to a Roth IRA,
made after tax year 2017, can’t be recharacter-
ized as having been made to a traditional IRA.
For more information, see Pub. 590-A.
Statement of required minimum distribu-
tion. If a minimum distribution from your IRA is
required, the trustee, custodian, or issuer that
held the IRA at the end of the preceding year
must either report the amount of the required
minimum distribution to you, or offer to figure it
for you. The report or offer must include the
date by which the amount must be distributed.
The report is due January 31 of the year in
which the minimum distribution is required. It
can be provided with the year-end fair market
value statement that you normally get each
year. No report is required for IRAs of owners
who have died.
IRA interest. Although interest earned from
your IRA is generally not taxed in the year
earned, it isn't tax-exempt interest. Tax on your
traditional IRA is generally deferred until you
take a distribution. Don't report this interest on
your tax return as tax-exempt interest.
Net investment income tax. For purposes of
the Net Investment Income Tax (NIIT), net in-
vestment income doesn't include distributions
from a qualified retirement plan including IRAs
(for example, 401(a), 403(a), 403(b), 408,
408A, or 457(b) plans). However, these distri-
butions are taken into account when determin-
ing the modified AGI threshold. Distributions
from a nonqualified retirement plan are included
in net investment income. See Form 8960, Net
Investment Income Tax—Individuals, Estates,
and Trusts, and its instructions for more infor-
mation.
Form 8606. To designate contributions as
nondeductible, you must file Form 8606.
The term “50 or older” is used several
times in this chapter. It refers to an IRA
owner who is age 50 or older by the
end of the tax year.
Introduction
An IRA is a personal savings plan that gives you
tax advantages for setting aside money for your
retirement.
This chapter discusses the following topics.
• The rules for a traditional IRA (any IRA that
isn't a Roth or SIMPLE IRA).
• The Roth IRA, which features nondeducti-
ble contributions and tax-free distributions.TIP
Simplified Employee Pensions (SEPs) and
Savings Incentive Match Plans for Employees
(SIMPLE) plans aren't discussed in this chapter.
For more information on these plans and em-
ployees' SEP IRAs and SIMPLE IRAs that are
part of these plans, see Pub. 560, Retirement
Plans for Small Business.
For information about contributions, deduc-
tions, withdrawals, transfers, rollovers, and
other transactions, see Pub. 590-A and Pub.
590-B.
Useful Items
You may want to see:
Publication
560 Retirement Plans for Small Business
575 Pension and Annuity Income
590-A Contributions to Individual
Retirement Arrangements (IRAs)
590-B Distributions from Individual
Retirement Arrangements (IRAs)
Form (and Instructions)
5329 Additional Taxes on Qualified Plans
(Including IRAs) and Other
Tax-Favored Accounts
8606 Nondeductible IRAs
8915-F Qualified Disaster Retirement
Plan Distributions and Repayments
For these and other useful items, go to IRS.gov/
Forms.
Traditional IRAs
In this chapter, the original IRA (sometimes
called an ordinary or regular IRA) is referred to
as a “traditional IRA.” A traditional IRA is any
IRA that isn't a Roth IRA or a SIMPLE IRA.Two
advantages of a traditional IRA are:
• You may be able to deduct some or all of
your contributions to it, depending on your
circumstances; and
• Generally, amounts in your IRA, including
earnings and gains, aren't taxed until they
are distributed.
Who Can Open a
Traditional IRA?
You can open and make contributions to a tradi-
tional IRA if you (or, if you file a joint return, your
spouse) received taxable compensation during
the year.
For tax years beginning after 2019,
there is no age limit on making contri-
butions to your traditional IRA. For
more information, see Pub. 590-A.
What is compensation? Generally, compen-
sation is what you earn from working. Compen-
sation includes wages, salaries, tips, professio-
nal fees, bonuses, and other amounts you
receive for providing personal services. The
IRS treats as compensation any amount prop-
erly shown in box 1 (Wages, tips, other com-
pensation) of Form W-2, Wage and Tax State-
590-A
590-B
5329
8606
8915-FTIP
ment, provided that this amount is reduced by
any amount properly shown in box 11 (Nonqua-
lified plans).
Scholarship and fellowship payments are
compensation for this purpose only if shown in
box 1 of Form W-2.
Compensation also includes commissions
and taxable alimony and separate maintenance
payments.
Self-employment income. If you are
self-employed (a sole proprietor or a partner),
compensation is the net earnings from your
trade or business (provided your personal serv-
ices are a material income-producing factor) re-
duced by the total of:
• The deduction for contributions made on
your behalf to retirement plans, and
• The deductible part of your self-employ-
ment tax.
Compensation includes earnings from
self-employment even if they aren't subject to
self-employment tax because of your religious
beliefs.
Nontaxable combat pay. For IRA purpo-
ses, if you were a member of the U.S. Armed
Forces, your compensation includes any non-
taxable combat pay you receive.
What isn't compensation? Compensation
doesn't include any of the following items.
• Earnings and profits from property, such as
rental income, interest income, and divi-
dend income.
• Pension or annuity income.
• Deferred compensation received (compen-
sation payments postponed from a past
year).
• Income from a partnership for which you
don't provide services that are a material
income-producing factor.
• Conservation Reserve Program (CRP)
payments reported on Schedule SE (Form
1040), line 1b.
• Any amounts (other than combat pay) you
exclude from income, such as foreign
earned income and housing costs.
When and How Can a
Traditional IRA Be
Opened?
You can open a traditional IRA at any time.
However, the time for making contributions for
any year is limited. See When Can Contribu-
tions Be Made, later.
You can open different kinds of IRAs with a
variety of organizations. You can open an IRA
at a bank or other financial institution or with a
mutual fund or life insurance company. You can
also open an IRA through your stockbroker. Any
IRA must meet Internal Revenue Code require-
ments.
Kinds of traditional IRAs. Your traditional IRA
can be an individual retirement account or an-
nuity. It can be part of either a SEP or an em-
ployer or employee association trust account.
Chapter 9 Individual Retirement Arrangements (IRAs) Page 77
How Much Can Be
Contributed?
There are limits and other rules that affect the
amount that can be contributed to a traditional
IRA. These limits and other rules are explained
below.
Community property laws. Except as dis-
cussed later under Kay Bailey Hutchison
Spousal IRA limit, each spouse figures his or
her limit separately, using his or her own com-
pensation. This is the rule even in states with
community property laws.
Brokers' commissions. Brokers' commis-
sions paid in connection with your traditional
IRA are subject to the contribution limit.
Trustees' fees. Trustees' administrative fees
aren't subject to the contribution limit.
Qualified reservist repayments. If you are
(or were) a member of a reserve component
and you were ordered or called to active duty
after September 11, 2001, you may be able to
contribute (repay) to an IRA amounts equal to
any qualified reservist distributions you re-
ceived. You can make these repayment contri-
butions even if they would cause your total con-
tributions to the IRA to be more than the general
limit on contributions. To be eligible to make
these repayment contributions, you must have
received a qualified reservist distribution from
an IRA or from a section 401(k) or 403(b) plan
or similar arrangement.
For more information, see Qualified reservist
repayments under How Much Can Be Contrib-
uted? in chapter 1 of Pub. 590-A.
Contributions on your behalf to a tradi-
tional IRA reduce your limit for contri-
butions to a Roth IRA. (See Roth IRAs,
later.)
General limit. For 2021, the most that can be
contributed to your traditional IRA is generally
the smaller of the following amounts.
• $6,000 ($7,000 if you are 50 or older).
• Your taxable compensation (defined ear-
lier) for the year.
This is the most that can be contributed regard-
less of whether the contributions are to one or
more traditional IRAs or whether all or part of
the contributions are nondeductible. (See Non-
deductible Contributions, later.) Qualified re-
servist repayments don't affect this limit.
Example 1. Betty, who is 34 years old and
single, earned $24,000 in 2021. Her IRA contri-
butions for 2021 are limited to $6,000.
Example 2. John, an unmarried college
student working part time, earned $3,500 in
2021. His IRA contributions for 2021 are limited
to $3,500, the amount of his compensation.
Kay Bailey Hutchison Spousal IRA limit.
For 2021, if you file a joint return and your taxa-
ble compensation is less than that of your
spouse, the most that can be contributed for the
year to your IRA is the smaller of the following
amounts.
1. $6,000 ($7,000 if you are 50 or older).CAUTION
!
2. The total compensation includible in the
gross income of both you and your spouse
for the year, reduced by the following two
amounts.
a. Your spouse's IRA contribution for the
year to a traditional IRA.
b. Any contribution for the year to a Roth
IRA on behalf of your spouse.
This means that the total combined contribu-
tions that can be made for the year to your IRA
and your spouse's IRA can be as much as
$12,000 ($13,000 if only one of you is 50 or
older, or $14,000 if both of you are 50 or older).
When Can Contributions
Be Made?
As soon as you open your traditional IRA, con-
tributions can be made to it through your
chosen sponsor (trustee or other administrator).
Contributions must be in the form of money
(cash, check, or money order). Property can't
be contributed.
Contributions must be made by due date.
Contributions can be made to your traditional
IRA for a year at any time during the year or by
the due date for filing your return for that year,
not including extensions.
Designating year for which contribution is
made. If an amount is contributed to your tradi-
tional IRA between January 1 and April 15, you
should tell the sponsor which year (the current
year or the previous year) the contribution is for.
If you don't tell the sponsor which year it is for,
the sponsor can assume, and report to the IRS,
that the contribution is for the current year (the
year the sponsor received it).
Filing before a contribution is made. You
can file your return claiming a traditional IRA
contribution before the contribution is actually
made. Generally, the contribution must be
made by the due date of your return, not includ-
ing extensions.
Contributions not required. You don't have
to contribute to your traditional IRA for every tax
year, even if you can.
How Much Can You
Deduct?
Generally, you can deduct the lesser of:
• The contributions to your traditional IRA for
the year, or
• The general limit (or the Kay Bailey Hutchi-
son Spousal IRA limit, if it applies).
However, if you or your spouse was covered by
an employer retirement plan, you may not be
able to deduct this amount. See Limit if Covered
by Employer Plan, later.
You may be able to claim a credit for
contributions to your traditional IRA.
For more information, see chapter 3 of
Pub. 590-A.
Trustees' fees. Trustees' administrative fees
that are billed separately and paid in connection
with your traditional IRA aren't deductible asTIP
IRA contributions. You are also not able to de-
duct these fees as an itemized deduction.
Brokers' commissions. Brokers' commis-
sions are part of your IRA contribution and, as
such, are deductible subject to the limits.
Full deduction. If neither you nor your spouse
was covered for any part of the year by an em-
ployer retirement plan, you can take a deduc-
tion for total contributions to one or more tradi-
tional IRAs of up to the lesser of:
• $6,000 ($7,000 if you are 50 or older in
2021), or
• 100% of your compensation.
This limit is reduced by any contributions made
to a 501(c)(18) plan on your behalf.
Kay Bailey Hutchison Spousal IRA. In the
case of a married couple with unequal compen-
sation who file a joint return, the deduction for
contributions to the traditional IRA of the spouse
with less compensation is limited to the lesser
of the following amounts.
1. $6,000 ($7,000 if the spouse with the
lower compensation is 50 or older in
2021).
2. The total compensation includible in the
gross income of both spouses for the year
reduced by the following three amounts.
a. The IRA deduction for the year of the
spouse with the greater compensa-
tion.
b. Any designated nondeductible contri-
bution for the year made on behalf of
the spouse with the greater compen-
sation.
c. Any contributions for the year to a
Roth IRA on behalf of the spouse with
the greater compensation.
This limit is reduced by any contributions to a
501(c)(18) plan on behalf of the spouse with the
lesser compensation.
Note. If you were divorced or legally sepa-
rated (and didn't remarry) before the end of the
year, you can't deduct any contributions to your
spouse's IRA. After a divorce or legal separa-
tion, you can deduct only contributions to your
own IRA. Your deductions are subject to the
rules for single individuals.
Covered by an employer retirement plan. If
you or your spouse was covered by an em-
ployer retirement plan at any time during the
year for which contributions were made, your
deduction may be further limited. This is dis-
cussed later under Limit if Covered by Em-
ployer Plan. Limits on the amount you can de-
duct don't affect the amount that can be
contributed. See Nondeductible Contributions,
later.
Are You Covered by an Employer
Plan?
The Form W-2 you receive from your employer
has a box used to indicate whether you were
covered for the year. The “Retirement plan” box
should be checked if you were covered.
Page 78 Chapter 9 Individual Retirement Arrangements (IRAs)
Reservists and volunteer firefighters should
also see Situations in Which You Aren’t Cov-
ered, later.
If you aren't certain whether you were cov-
ered by your employer's retirement plan, you
should ask your employer.
Federal judges. For purposes of the IRA de-
duction, federal judges are covered by an em-
ployer retirement plan.
For Which Year(s) Are You
Covered?
Special rules apply to determine the tax years
for which you are covered by an employer plan.
These rules differ depending on whether the
plan is a defined contribution plan or a defined
benefit plan.
Tax year. Your tax year is the annual account-
ing period you use to keep records and report
income and expenses on your income tax re-
turn. For almost all people, the tax year is the
calendar year.
Defined contribution plan. Generally, you
are covered by a defined contribution plan for a
tax year if amounts are contributed or allocated
to your account for the plan year that ends with
or within that tax year.
A defined contribution plan is a plan that
provides for a separate account for each person
covered by the plan. Types of defined contribu-
tion plans include profit-sharing plans, stock bo-
nus plans, and money purchase pension plans.
For additional information, see Pub. 590-A.
Defined benefit plan. If you are eligible to par-
ticipate in your employer's defined benefit plan
for the plan year that ends within your tax year,
you are covered by the plan. This rule applies
even if you:
• Declined to participate in the plan,
• Didn't make a required contribution, or
• Didn't perform the minimum service re-
quired to accrue a benefit for the year.
A defined benefit plan is any plan that isn't a
defined contribution plan. In a defined benefit
plan, the level of benefits to be provided to each
participant is spelled out in the plan. The plan
administrator figures the amount needed to pro-
vide those benefits and those amounts are con-
tributed to the plan. Defined benefit plans in-
clude pension plans and annuity plans.
No vested interest. If you accrue a benefit for
a plan year, you are covered by that plan even if
you have no vested interest in (legal right to) the
accrual.
Situations in Which You Aren’t
Covered
Unless you are covered under another em-
ployer plan, you aren't covered by an employer
plan if you are in one of the situations described
below.
Social security or railroad retirement. Cov-
erage under social security or railroad retire-
ment isn't coverage under an employer retire-
ment plan.
Benefits from a previous employer's plan. If
you receive retirement benefits from a previous
employer's plan, you aren't covered by that
plan.
Reservists. If the only reason you participate
in a plan is because you are a member of a re-
serve unit of the U.S. Armed Forces, you may
not be covered by the plan. You aren't covered
by the plan if both of the following conditions
are met.
1. The plan you participate in is established
for its employees by:
a. The United States,
b. A state or political subdivision of a
state, or
c. An instrumentality of either (a) or (b)
above.
2. You didn't serve more than 90 days on ac-
tive duty during the year (not counting duty
for training).
Volunteer firefighters. If the only reason you
participate in a plan is because you are a volun-
teer firefighter, you may not be covered by the
plan. You aren't covered by the plan if both of
the following conditions are met.
1. The plan you participate in is established
for its employees by:
a. The United States,
b. A state or political subdivision of a
state, or
c. An instrumentality of either (a) or (b)
above.
2. Your accrued retirement benefits at the
beginning of the year won't provide more
than $1,800 per year at retirement.
Limit if Covered by Employer Plan
If either you or your spouse was covered by an
employer retirement plan, you may be entitled
to only a partial (reduced) deduction or no de-
duction at all, depending on your income and
your filing status.
Your deduction begins to decrease (phase
out) when your income rises above a certain
amount and is eliminated altogether when it
reaches a higher amount. These amounts vary
depending on your filing status.
To determine if your deduction is subject to
phaseout, you must determine your modified
AGI and your filing status. See Filing status and
Modified adjusted gross income (AGI), later.
Then use Table 9-1 or Table 9-2 to determine if
the phaseout applies.
Social security recipients. Instead of using
Table 9-1 or Table 9-2, use the worksheets in
Appendix B of Pub. 590-A if, for the year, all of
the following apply.
• You received social security benefits.
• You received taxable compensation.
• Contributions were made to your traditional
IRA.
• You or your spouse was covered by an
employer retirement plan.
Use those worksheets to figure your IRA deduc-
tion, your nondeductible contribution, and the
taxable portion, if any, of your social security
benefits.
Deduction phaseout. If you are covered by an
employer retirement plan and you didn't receive
any social security retirement benefits, your IRA
deduction may be reduced or eliminated de-
pending on your filing status and modified AGI
as shown in Table 9-1.
If your spouse is covered. If you aren't
covered by an employer retirement plan, but
your spouse is, and you didn't receive any so-
cial security benefits, your IRA deduction may
be reduced or eliminated entirely depending on
your filing status and modified AGI as shown in
Table 9-2.
Filing status. Your filing status depends pri-
marily on your marital status. For this purpose,
you need to know if your filing status is single or
Table 9-1. Effect of Modified AGI1 on Deduction if You Are Covered by
Retirement Plan at Work
If you are covered by a retirement plan at work, use this table to determine if your modified AGI
affects the amount of your deduction.
IF your filing status is... AND your modified AGI is... THEN you can take...
Single
or
Head of household
$66,000 or less a full deduction.
more than $66,000
but less than $76,000
a partial deduction.
$76,000 or more no deduction.
Married filing jointly
or
Qualifying widow(er)
$105,000 or less a full deduction.
more than $105,000
but less than $125,000
a partial deduction.
$125,000 or more no deduction.
Married filing
separately2
less than $10,000 a partial deduction.
$10,000 or more no deduction.
1 Modified AGI (adjusted gross income). See Modified adjusted gross income (AGI), later.
2 If you didn't live with your spouse at any time during the year, your filing status is considered Single for this
purpose (therefore, your IRA deduction is determined under the “Single” column).
Chapter 9 Individual Retirement Arrangements (IRAs) Page 79
head of household, married filing jointly or quali-
fying widow(er), or married filing separately. If
you need more information on filing status, see
chapter 2.
Lived apart from spouse. If you didn't live
with your spouse at any time during the year
and you file a separate return, your filing status,
for this purpose, is single.
Modified adjusted gross income (AGI). You
may be able to use Worksheet 9-1 to figure your
modified AGI. However, if you made contribu-
tions to your IRA for 2021 and received a distri-
bution from your IRA in 2021, see Pub. 590-A.
Don't assume that your modified AGI is
the same as your compensation. Your
modified AGI may include income in
addition to your compensation (discussed ear-
lier), such as interest, dividends, and income
from IRA distributions.
When filing Form 1040 or 1040-SR, refigure
the AGI amount on line 11 without taking into
account any of the following amounts.
• IRA deduction.
• Student loan interest deduction.
• Foreign earned income exclusion.
• Foreign housing exclusion or deduction.
• Exclusion of qualified savings bond inter-
est shown on Form 8815, Exclusion of In-
terest From Series EE and I U.S. Savings
Bonds Issued After 1989.
• Exclusion of employer-provided adoption
benefits shown on Form 8839, Qualified
Adoption Expenses.
This is your modified AGI.CAUTION
!
Table 9-2. Effect of Modified AGI1 on Deduction if You Aren’t Covered by
Retirement Plan at Work
If you aren't covered by a retirement plan at work, use this table to determine if your modified AGI
affects the amount of your deduction.
IF your filing status is... AND your modified AGI is... THEN you can take...
Single,
Head of household, or
Qualifying widow(er)
any amount a full deduction.
Married filing jointly or
separately with a spouse who
isn't covered by a plan at work
any amount a full deduction.
Married filing jointly with a
spouse who is covered by a plan
at work
$198,000 or less a full deduction.
more than $198,000
but less than $208,000
a partial deduction.
$208,000 or more no deduction.
Married filing separately with a
spouse who is covered by a plan
at work2
less than $10,000 a partial deduction.
$10,000 or more no deduction.
1 Modified AGI (adjusted gross income). See Modified adjusted gross income (AGI), later.
2 You are entitled to the full deduction if you didn't live with your spouse at any time during the year.
Page 80 Chapter 9 Individual Retirement Arrangements (IRAs)
Both contributions for 2021 and distribu-
tions in 2021. If all three of the following apply,
any IRA distributions you received in 2021 may
be partly tax free and partly taxable.
• You received distributions in 2021 from
one or more traditional IRAs.
• You made contributions to a traditional IRA
for 2021.
• Some of those contributions may be non-
deductible contributions.
If this is your situation, you must figure the taxa-
ble part of the traditional IRA distribution before
you can figure your modified AGI. To do this,
you can use Worksheet 1-1 in Pub. 590-B.
If at least one of the above doesn't apply,
figure your modified AGI using Worksheet 9-1.
How to figure your reduced IRA deduction.
You can figure your reduced IRA deduction for
Form 1040 or 1040-SR by using the worksheets
in chapter 1 of Pub. 590-A. Also, the Instruc-
tions for Form 1040 include similar worksheets
that you may be able to use instead.
Reporting Deductible
Contributions
When filing Form 1040 or 1040-SR, enter your
IRA deduction on Schedule 1 (Form 1040),
line 20.
Nondeductible
Contributions
Although your deduction for IRA contributions
may be reduced or eliminated, contributions
can be made to your IRA up to the general limit
or, if it applies, the Kay Bailey Hutchison
Spousal IRA limit. The difference between your
total permitted contributions and your IRA de-
duction, if any, is your nondeductible contribu-
tion.
Example. Mike is 30 years old and single.
In 2021, he was covered by a retirement plan at
work. His salary was $67,000. His modified AGI
was $80,000. Mike made a $6,000 IRA contri-
bution for 2021. Because he was covered by a
retirement plan and his modified AGI was over
$76,000, he can't deduct his $6,000 IRA contri-
bution. He must designate this contribution as a
nondeductible contribution by reporting it on
Form 8606, as explained next.
Form 8606. To designate contributions as
nondeductible, you must file Form 8606.
You don't have to designate a contribution
as nondeductible until you file your tax return.
When you file, you can even designate other-
wise deductible contributions as nondeductible.
You must file Form 8606 to report nonde-
ductible contributions even if you don't have to
file a tax return for the year.
A Form 8606 isn't used for the year that
you make a rollover from a qualified re-
tirement plan to a traditional IRA and
the rollover includes nontaxable amounts. In
those situations, a Form 8606 is completed for
the year you take a distribution from that IRA.
See Form 8606 under Distributions Fully or
Partly Taxable, later.
Failure to report nondeductible contribu-
tions. If you don't report nondeductible contri-
butions, all of the contributions to your tradi-
tional IRA will be treated as deductible
contributions when withdrawn. All distributions
from your IRA will be taxed unless you can
show, with satisfactory evidence, that nonde-
ductible contributions were made.
Penalty for overstatement. If you over-
state the amount of nondeductible contributions
on your Form 8606 for any tax year, you must
pay a penalty of $100 for each overstatement,
unless it was due to reasonable cause.
Penalty for failure to file Form 8606. You
will have to pay a $50 penalty if you don't file a
required Form 8606, unless you can prove that
the failure was due to reasonable cause.
Tax on earnings on nondeductible contri-
butions. As long as contributions are within
the contribution limits, none of the earnings or
gains on contributions (deductible or nondeduc-
tible) will be taxed until they are distributed. See
When Can You Withdraw or Use IRA Assets,
later.
Cost basis. You will have a cost basis in your
traditional IRA if you made any nondeductible
contributions. Your cost basis is the sum of the
nondeductible contributions to your IRA minus
any withdrawals or distributions of nondeducti-
ble contributions.CAUTION
!
Inherited IRAs
If you inherit a traditional IRA, you are called a
beneficiary. A beneficiary can be any person or
entity the owner chooses to receive the benefits
of the IRA after he or she dies. Beneficiaries of
a traditional IRA must include in their gross in-
come any taxable distributions they receive.
Inherited from spouse. If you inherit a tradi-
tional IRA from your spouse, you generally have
the following three choices. You can do one of
the following.
1. Treat it as your own IRA by designating
yourself as the account owner.
2. Treat it as your own by rolling it over into
your IRA, or to the extent it is taxable, into
a:
a. Qualified employer plan,
b. Qualified employee annuity plan (sec-
tion 403(a) plan),
c. Tax-sheltered annuity plan (section
403(b) plan), or
d. Deferred compensation plan of a
state or local government (section
457 plan).
3. Treat yourself as the beneficiary rather
than treating the IRA as your own.
Treating it as your own. You will be con-
sidered to have chosen to treat the IRA as your
own if:
• Contributions (including rollover contribu-
tions) are made to the inherited IRA, or
• You don't take the required minimum distri-
bution for a year as a beneficiary of the
IRA.
You will only be considered to have chosen to
treat the IRA as your own if:
• You are the sole beneficiary of the IRA,
and
• You have an unlimited right to withdraw
amounts from it.
However, if you receive a distribution from
your deceased spouse's IRA, you can roll that
distribution over into your own IRA within the
60-day time limit, as long as the distribution isn't
a required distribution, even if you aren't the
sole beneficiary of your deceased spouse's
IRA.
Worksheet 9-1. Figuring Your Modified AGI
Keep for Your Records
Use this worksheet to figure your modified AGI for traditional IRA purposes.
1. Enter your adjusted gross income (AGI) from Form 1040 or 1040-SR, line 11, figured without taking into
account the amount from Schedule 1 (Form 1040), line 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter any student loan interest deduction from Schedule 1 (Form 1040), line 21 . . . . . . . . . . . . . . . . . . . . 2.
3. Enter any foreign earned income and/or housing exclusion from Form 2555, line 45 . . . . . . . . . . . . . . . . . 3.
4. Enter any foreign housing deduction from Form 2555, line 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter any excludable savings bond interest from Form 8815, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter any excluded employer-provided adoption benefits from Form 8839, line 28 . . . . . . . . . . . . . . . . . . 6.
7. Add lines 1 through 6. This is your modified AGI for traditional IRA purposes . . . . . . . . . . . . . . . . . . . . . . 7.
Chapter 9 Individual Retirement Arrangements (IRAs) Page 81
Inherited from someone other than spouse.
If you inherit a traditional IRA from anyone other
than your deceased spouse, you can't treat the
inherited IRA as your own. This means that you
can't make any contributions to the IRA. It also
means you can't roll over any amounts into or
out of the inherited IRA. However, you can
make a trustee-to-trustee transfer as long as the
IRA into which amounts are being moved is set
up and maintained in the name of the deceased
IRA owner for the benefit of you as beneficiary.
For more information, see the discussion of
Inherited IRAs under Rollover From One IRA
Into Another, later.
Can You Move Retirement
Plan Assets?
You can transfer, tax free, assets (money or
property) from other retirement plans (including
traditional IRAs) to a traditional IRA. You can
make the following kinds of transfers.
• Transfers from one trustee to another.
• Rollovers.
• Transfers incident to a divorce.
Transfers to Roth IRAs. Under certain condi-
tions, you can move assets from a traditional
IRA or from a designated Roth account to a
Roth IRA. You can also move assets from a
qualified retirement plan to a Roth IRA. See
Can You Move Amounts Into a Roth IRA? under
Roth IRAs, later.
Trustee-to-Trustee Transfer
A transfer of funds in your traditional IRA from
one trustee directly to another, either at your re-
quest or at the trustee's request, isn't a rollover.
This includes the situation where the current
trustee issues a check to the new trustee, but
gives it to you to deposit. Because there is no
distribution to you, the transfer is tax free. Be-
cause it isn't a rollover, it isn't affected by the
1-year waiting period required between roll-
overs, discussed later under Rollover From One
IRA Into Another. For information about direct
transfers to IRAs from retirement plans other
than IRAs, see Can You Move Retirement Plan
Assets? in chapter 1 and Can You Move
Amounts Into a Roth IRA? in chapter 2 of Pub.
590-A.
Rollovers
Generally, a rollover is a tax-free distribution to
you of cash or other assets from one retirement
plan that you contribute (roll over) to another re-
tirement plan. The contribution to the second
retirement plan is called a “rollover contribu-
tion.”
Note. An amount rolled over tax free from
one retirement plan to another is generally in-
cludible in income when it is distributed from the
second plan.
Kinds of rollovers to a traditional IRA. You
can roll over amounts from the following plans
into a traditional IRA.
• A traditional IRA.
• An employer's qualified retirement plan for
its employees.
• A deferred compensation plan of a state or
local government (section 457 plan).
• A tax-sheltered annuity plan (section
403(b) plan).
Treatment of rollovers. You can't deduct a
rollover contribution, but you must report the
rollover distribution on your tax return as dis-
cussed later under Reporting rollovers from
IRAs and Reporting rollovers from employer
plans.
Rollover notice. A written explanation of
rollover treatment must be given to you by the
plan (other than an IRA) making the distribution.
See Written explanation to recipients in Pub.
590-A.
Kinds of rollovers from a traditional IRA.
You may be able to roll over, tax free, a distribu-
tion from your traditional IRA into a qualified
plan. These plans include the federal Thrift Sav-
ings Plan (for federal employees), deferred
compensation plans of state or local govern-
ments (section 457 plans), and tax-sheltered
annuity plans (section 403(b) plans). The part of
the distribution that you can roll over is the part
that would otherwise be taxable (includible in
your income). Qualified plans may, but aren't
required to, accept such rollovers.
Time limit for making a rollover contribu-
tion. You must generally make the rollover
contribution by the 60th day after the day you
receive the distribution from your traditional IRA
or your employer's plan.
The IRS may waive the 60-day requirement
where the failure to do so would be against
equity or good conscience, such as in the event
of a casualty, disaster, or other event beyond
your reasonable control. For more information,
see Can You Move Retirement Plan Assets? in
chapter 1 of Pub. 590-A.
Extension of rollover period. If an amount
distributed to you from a traditional IRA or a
qualified employer retirement plan is a frozen
deposit at any time during the 60-day period al-
lowed for a rollover, special rules extend the
rollover period. For more information, see Can
You Move Retirement Plan Assets? in chapter 1
of Pub. 590-A.
Rollover From One IRA Into
Another
You can withdraw, tax free, all or part of the as-
sets from one traditional IRA if you reinvest
them within 60 days in the same or another tra-
ditional IRA. Because this is a rollover, you can't
deduct the amount that you reinvest in an IRA.
Waiting period between rollovers. Gener-
ally, if you make a tax-free rollover of any part of
a distribution from a traditional IRA, you can't,
within a 1-year period, make a tax-free rollover
of any later distribution from that same IRA. You
also can't make a tax-free rollover of any
amount distributed, within the same 1-year pe-
riod, from the IRA into which you made the
tax-free rollover.
The 1-year period begins on the date you re-
ceive the IRA distribution, not on the date you
roll it over into an IRA. Rules apply to the num-
ber of rollovers you can have with your tradi-
tional IRAs. See Application of one-rollover limi-
tation next.
Application of one-rollover limitation. You
can make only one rollover from an IRA to an-
other (or the same) IRA in any 1-year period, re-
gardless of the number of IRAs you own. The
limit applies by aggregating all of an individual's
IRAs, including SEP and SIMPLE IRAs, as well
as traditional and Roth IRAs, effectively treating
them as one IRA for purposes of the limit. How-
ever, trustee-to-trustee transfers between IRAs
aren't limited and rollovers from traditional IRAs
to Roth IRAs (conversions) aren't limited.
Example. John has three traditional IRAs:
IRA-1, IRA-2, and IRA-3. John didn't take any
distributions from his IRAs in 2021. On January
1, 2022, John took a distribution from IRA-1 and
rolled it over into IRA-2 on the same day. For
2022, John can't roll over any other 2021 IRA
distribution, including a rollover distribution in-
volving IRA-3. This wouldn’t apply to a
trustee-to-trustee transfer or a Roth IRA conver-
sion.
Partial rollovers. If you withdraw assets from
a traditional IRA, you can roll over part of the
withdrawal tax free and keep the rest of it. The
amount you keep will generally be taxable (ex-
cept for the part that is a return of nondeductible
contributions). The amount you keep may be
subject to the 10% additional tax on early distri-
butions, discussed later under What Acts Re-
sult in Penalties or Additional Taxes.
Required distributions. Amounts that must
be distributed during a particular year under the
required minimum distribution rules (discussed
later) aren't eligible for rollover treatment.
Inherited IRAs. If you inherit a traditional IRA
from your spouse, you can generally roll it over,
or you can choose to make the inherited IRA
your own. See Treating it as your own, earlier.
Not inherited from spouse. If you inherit a
traditional IRA from someone other than your
spouse, you can't roll it over or allow it to re-
ceive a rollover contribution. You must withdraw
the IRA assets within a certain period. For more
information, see When Must You Withdraw As-
sets? (Required Minimum Distributions) in
chapter 1 of Pub. 590-B.
Reporting rollovers from IRAs. Report any
rollover from one traditional IRA to the same or
another traditional IRA on Form 1040 or
1040-SR as follows.
Enter the total amount of the distribution on
Form 1040 or 1040-SR, line 4a. If the total
amount on Form 1040 or 1040-SR, line 4a, was
rolled over, enter zero on Form 1040 or
1040-SR, line 4b. If the total distribution wasn't
rolled over, enter the taxable portion of the part
that wasn't rolled over on Form 1040 or
1040-SR, line 4b. Enter “Rollover” next to Form
1040 or 1040-SR, line 4b. For more information,
see the Instructions for Form 1040.
If you rolled over the distribution into a quali-
fied plan (other than an IRA) or you make the
rollover in 2022, attach a statement explaining
what you did.
Page 82 Chapter 9 Individual Retirement Arrangements (IRAs)
Rollover From Employer's Plan
Into an IRA
You can roll over into a traditional IRA all or part
of an eligible rollover distribution you receive
from your (or your deceased spouse's):
• Employer's qualified pension, profit-shar-
ing, or stock bonus plan;
• Annuity plan;
• Tax-sheltered annuity plan (section 403(b)
plan); or
• Governmental deferred compensation plan
(section 457 plan).
A qualified plan is one that meets the re-
quirements of the Internal Revenue Code.
Eligible rollover distribution. Generally, an
eligible rollover distribution is any distribution of
all or part of the balance to your credit in a quali-
fied retirement plan except the following.
1. A required minimum distribution (ex-
plained later under When Must You With-
draw IRA Assets? (Required Minimum
Distributions)).
2. A hardship distribution.
3. Any of a series of substantially equal peri-
odic distributions paid at least once a year
over:
a. Your lifetime or life expectancy,
b. The lifetimes or life expectancies of
you and your beneficiary, or
c. A period of 10 years or more.
4. Corrective distributions of excess contri-
butions or excess deferrals, and any in-
come allocable to the excess, or of excess
annual additions and any allocable gains.
5. A loan treated as a distribution because it
doesn't satisfy certain requirements either
when made or later (such as upon de-
fault), unless the participant's accrued
benefits are reduced (offset) to repay the
loan. For more information, see Plan loan
offsets under Time Limit for Making a Roll-
over Contribution in Pub. 590-A.
6. Dividends on employer securities.
7. The cost of life insurance coverage.
Your rollover into a traditional IRA may in-
clude both amounts that would be taxable and
amounts that wouldn’t be taxable if they were
distributed to you but not rolled over. To the ex-
tent the distribution is rolled over into a tradi-
tional IRA, it isn’t includible in your income.
Any nontaxable amounts that you roll
over into your traditional IRA become
part of your basis (cost) in your IRAs.
To recover your basis when you take distribu-
tions from your IRA, you must complete Form
8606 for the year of the distribution. See Form
8606 under Distributions Fully or Partly Taxa-
ble, later.
Rollover by nonspouse beneficiary. A direct
transfer from a deceased employee's qualified
pension, profit-sharing, or stock bonus plan; an-
nuity plan; tax-sheltered annuity (section
403(b)) plan; or governmental deferred com-
pensation (section 457) plan to an IRA set up toTIP
receive the distribution on your behalf can be
treated as an eligible rollover distribution if you
are the designated beneficiary of the plan and
not the employee's spouse. The IRA is treated
as an inherited IRA. For more information about
inherited IRAs, see Inherited IRAs, earlier.
Reporting rollovers from employer plans.
Enter the total distribution (before income tax or
other deductions were withheld) on Form 1040
or 1040-SR, line 4a. This amount should be
shown in box 1 of Form 1099-R. From this
amount, subtract any contributions (usually
shown in box 5 of Form 1099-R) that were taxa-
ble to you when made. From that result, sub-
tract the amount that was rolled over either di-
rectly or within 60 days of receiving the
distribution. Enter the remaining amount, even if
zero, on Form 1040 or 1040-SR, line 4b. Also,
enter "Rollover" next to Form 1040 or 1040-SR,
line 4b.
Transfers Incident to Divorce
If an interest in a traditional IRA is transferred
from your spouse or former spouse to you by a
divorce or separate maintenance decree or a
written document related to such a decree, the
interest in the IRA, starting from the date of the
transfer, is treated as your IRA. The transfer is
tax free. For detailed information, see Distribu-
tions under divorce or similar proceedings (al-
ternate payees) under Rollover From Employ-
er's Plan Into an IRA in Pub. 590-A.
Converting From Any Traditional
IRA to a Roth IRA
Allowable conversions. You can withdraw all
or part of the assets from a traditional IRA and
reinvest them (within 60 days) in a Roth IRA.
The amount that you withdraw and timely con-
tribute (convert) to the Roth IRA is called a con-
version contribution. If properly (and timely) rol-
led over, the 10% additional tax on early
distributions won't apply. However, a part or all
of the conversion contribution from your tradi-
tional IRA is included in your gross income.
Required distributions. You can't convert
amounts that must be distributed from your tra-
ditional IRA for a particular year (including the
calendar year in which you reach age 72 under
the required minimum distribution rules (dis-
cussed later)).
Income. You must include in your gross in-
come distributions from a traditional IRA that
you would have had to include in income if you
hadn't converted them into a Roth IRA. These
amounts are normally included in income on
your return for the year that you converted them
from a traditional IRA to a Roth IRA.
You don't include in gross income any part
of a distribution from a traditional IRA that is a
return of your basis, as discussed later.
You must file Form 8606 to report 2021 con-
versions from traditional, SEP, or SIMPLE IRAs
to a Roth IRA in 2021 (unless you recharacter-
ized the entire amount) and to figure the amount
to include in income.
If you must include any amount in your gross
income, you may have to increase your with-
holding or make estimated tax payments. See
chapter 4.
Recharacterizations
You may be able to treat a contribution made to
one type of IRA as having been made to a dif-
ferent type of IRA. This is called recharacteriz-
ing the contribution. See Can You Move Retire-
ment Plan Assets? in chapter 1 of Pub. 590-A
for more detailed information.
How to recharacterize a contribution. To re-
characterize a contribution, you must generally
have the contribution transferred from the first
IRA (the one to which it was made) to the sec-
ond IRA in a trustee-to-trustee transfer. If the
transfer is made by the due date (including ex-
tensions) for your tax return for the year during
which the contribution was made, you can elect
to treat the contribution as having been origi-
nally made to the second IRA instead of to the
first IRA. If you recharacterize your contribution,
you must do all three of the following.
• Include in the transfer any net income allo-
cable to the contribution. If there was a
loss, the net income you must transfer may
be a negative amount.
• Report the recharacterization on your tax
return for the year during which the contri-
bution was made.
• Treat the contribution as having been
made to the second IRA on the date that it
was actually made to the first IRA.
No recharacterizations of conversions
made in 2018 or later. A conversion of a tradi-
tional IRA to a Roth IRA, and a rollover from any
other eligible retirement plan to a Roth IRA,
made in tax years beginning after tax year
2017, can’t be recharacterized as having been
made to a traditional IRA. If you made a conver-
sion in the 2017 tax year, you had until the due
date (with extensions) for filing the return for
that tax year to recharacterize it.
No deduction allowed. You can't deduct the
contribution to the first IRA. Any net income you
transfer with the recharacterized contribution is
treated as earned in the second IRA.
How do you recharacterize a contribution?
To recharacterize a contribution, you must no-
tify both the trustee of the first IRA (the one to
which the contribution was actually made) and
the trustee of the second IRA (the one to which
the contribution is being moved) that you have
elected to treat the contribution as having been
made to the second IRA rather than the first.
You must make the notifications by the date of
the transfer. Only one notification is required if
both IRAs are maintained by the same trustee.
The notification(s) must include all of the follow-
ing information.
• The type and amount of the contribution to
the first IRA that is to be recharacterized.
• The date on which the contribution was
made to the first IRA and the year for which
it was made.
• A direction to the trustee of the first IRA to
transfer in a trustee-to-trustee transfer the
amount of the contribution and any net in-
come (or loss) allocable to the contribution
to the trustee of the second IRA.
• The name of the trustee of the first IRA and
the name of the trustee of the second IRA.
Chapter 9 Individual Retirement Arrangements (IRAs) Page 83
• Any additional information needed to make
the transfer.
Reporting a recharacterization. If you elect
to recharacterize a contribution to one IRA as a
contribution to another IRA, you must report the
recharacterization on your tax return as directed
by Form 8606 and its instructions. You must
treat the contribution as having been made to
the second IRA.
When Can You Withdraw
or Use IRA Assets?
There are rules limiting use of your IRA assets
and distributions from it. Violation of the rules
generally results in additional taxes in the year
of violation. See What Acts Result in Penalties
or Additional Taxes, later.
Contributions returned before the due date
of return. If you made IRA contributions in
2021, you can withdraw them tax free by the
due date of your return. If you have an exten-
sion of time to file your return, you can withdraw
them tax free by the extended due date. You
can do this if, for each contribution you with-
draw, both of the following conditions apply.
• You didn't take a deduction for the contri-
bution.
• You withdraw any interest or other income
earned on the contribution. You can take
into account any loss on the contribution
while it was in the IRA when figuring the
amount that must be withdrawn. If there
was a loss, the net income earned on the
contribution may be a negative amount.
Note. To figure the amount you must with-
draw, see Worksheet 1-4 under When Can You
Withdraw or Use Assets? in chapter 1 of Pub.
590-A.
Earnings includible in income. You must
include in income any earnings on the contribu-
tions you withdraw. Include the earnings in in-
come for the year in which you made the contri-
butions, not in the year in which you withdraw
them.
Generally, except for any part of a with-
drawal that is a return of nondeductible
contributions (basis), any withdrawal of
your contributions after the due date (or exten-
ded due date) of your return will be treated as a
taxable distribution. Excess contributions can
also be recovered tax free as discussed under
What Acts Result in Penalties or Additional
Taxes, later.
Early distributions tax. The 10% additional
tax on distributions made before you reach age
591/2 doesn't apply to these tax-free withdraw-
als of your contributions. However, the distribu-
tion of interest or other income must be repor-
ted on Form 5329 and, unless the distribution
qualifies as an exception to the age 591/2 rule, it
will be subject to this tax. See Early Distribu-
tions under What Acts Result in Penalties or
Additional Taxes? in Pub. 590-B.CAUTION
!
When Must You Withdraw
IRA Assets? (Required
Minimum Distributions)
You can't keep funds in a traditional IRA indefi-
nitely. Eventually, they must be distributed. If
there are no distributions, or if the distributions
aren't large enough, you may have to pay a
50% excise tax on the amount not distributed as
required. See Excess Accumulations (Insuffi-
cient Distributions), later. The requirements for
distributing IRA funds differ depending on
whether you are the IRA owner or the benefi-
ciary of a decedent's IRA.
Required minimum distribution. The amount
that must be distributed each year is referred to
as the “required minimum distribution.”
Distributions not eligible for rollover.
Amounts that must be distributed (required min-
imum distributions) during a particular year
aren't eligible for rollover treatment.
IRA owners. If you are the owner of a tradi-
tional IRA, you must generally start receiving
distributions from your IRA by April 1 of the year
following the year in which you reach age 72.
April 1 of the year following the year in which
you reach age 72 is referred to as the “required
beginning date.”
Distributions by the required beginning
date. You must receive at least a minimum
amount for each year starting with the year you
reach age 72. If you don't (or didn't) receive that
minimum amount in the year you become age
72, then you must receive distributions for the
year you become age 72 by April 1 of the next
year.
If an IRA owner dies after reaching age 72
but before April 1 of the next year, no minimum
distribution is required because death occurred
before the required beginning date.
Even if you begin receiving distribu-
tions before you attain age 72, you
must begin figuring and receiving re-
quired minimum distributions by your required
beginning date.
Distributions after the required beginning
date. The required minimum distribution for
any year after the year you turn age 72 must be
made by December 31 of that later year.
Beneficiaries. If you are the beneficiary of a
decedent's traditional IRA, the requirements for
distributions from that IRA generally depend on
whether the IRA owner died before or after the
required beginning date for distributions.
More information. For more information, in-
cluding how to figure your minimum required
distribution each year and how to figure your re-
quired distribution if you are a beneficiary of a
decedent's IRA, see When Must You Withdraw
Assets? (Required Minimum Distributions) in
chapter 1 of Pub. 590-B.
Are Distributions Taxable?
In general, distributions from a traditional IRA
are taxable in the year you receive them.CAUTION
!
Exceptions. Exceptions to distributions from
traditional IRAs being taxable in the year you re-
ceive them are:
• Rollovers;
• Qualified charitable distributions (QCDs),
discussed later;
• Tax-free withdrawals of contributions, dis-
cussed earlier; and
• The return of nondeductible contributions,
discussed later under Distributions Fully or
Partly Taxable.
Although a conversion of a traditional
IRA is considered a rollover for Roth
IRA purposes, it isn't an exception to
the rule that distributions from a traditional IRA
are taxable in the year you receive them. Con-
version distributions are includible in your gross
income subject to this rule and the special rules
for conversions explained in Converting From
Any Traditional IRA Into a Roth IRA under Can
You Move Retirement Plan Assets? in chapter 1
of Pub. 590-A.
Qualified charitable distributions (QCDs). A
QCD is generally a nontaxable distribution
made directly by the trustee of your IRA to an
organization eligible to receive tax deductible
contributions. See Qualified Charitable Distribu-
tions in Pub. 590-B for more information.
A QCD will count towards your mini-
mum required distribution. See Quali-
fied charitable distributions under Are
Distributions Taxable? in chapter 1 of Pub.
590-B for more information.
Ordinary income. Distributions from tradi-
tional IRAs that you include in income are taxed
as ordinary income.
No special treatment. In figuring your tax, you
can't use the 10-year tax option or capital gain
treatment that applies to lump-sum distributions
from qualified retirement plans.
Distributions Fully or Partly
Taxable
Distributions from your traditional IRA may be
fully or partly taxable, depending on whether
your IRA includes any nondeductible contribu-
tions.
Fully taxable. If only deductible contributions
were made to your traditional IRA (or IRAs, if
you have more than one), you have no basis in
your IRA. Because you have no basis in your
IRA, any distributions are fully taxable when re-
ceived. See Reporting taxable distributions on
your return, later.
Partly taxable. If you made nondeductible
contributions or rolled over any after-tax
amounts to any of your traditional IRAs, you
have a cost basis (investment in the contract)
equal to the amount of those contributions.
These nondeductible contributions aren't taxed
when they are distributed to you. They are a re-
turn of your investment in your IRA.
Only the part of the distribution that repre-
sents nondeductible contributions and rolled
over after-tax amounts (your cost basis) is tax
free. If nondeductible contributions have been
made or after-tax amounts have been rolledCAUTION
!TIP
Page 84 Chapter 9 Individual Retirement Arrangements (IRAs)
over to your IRA, distributions consist partly of
nondeductible contributions (basis) and partly
of deductible contributions, earnings, and gains
(if there are any). Until all of your basis has
been distributed, each distribution is partly non-
taxable and partly taxable.
Form 8606. You must complete Form 8606
and attach it to your return if you receive a distri-
bution from a traditional IRA and have ever
made nondeductible contributions or rolled over
after-tax amounts to any of your traditional
IRAs. Using the form, you will figure the nontax-
able distributions for 2021 and your total IRA
basis for 2021 and earlier years.
Note. If you are required to file Form 8606
but you aren't required to file an income tax re-
turn, you must still file Form 8606. Send it to the
IRS at the time and place you would otherwise
file an income tax return.
Distributions reported on Form 1099-R. If
you receive a distribution from your traditional
IRA, you will receive Form 1099-R, Distributions
From Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance Con-
tracts, etc., or a similar statement. IRA distribu-
tions are shown in boxes 1 and 2a of Form
1099-R. The number or letter codes in box 7 tell
you what type of distribution you received from
your IRA.
Withholding. Federal income tax is withheld
from distributions from traditional IRAs unless
you choose not to have tax withheld. See chap-
ter 4.
IRA distributions delivered outside the
United States. In general, if you are a U.S. citi-
zen or resident alien and your home address is
outside the United States or its possessions,
you can't choose exemption from withholding
on distributions from your traditional IRA.
Reporting taxable distributions on your re-
turn. Report fully taxable distributions, includ-
ing early distributions, on Form 1040 or
1040-SR, line 4b (no entry is required on Form
1040 or 1040-SR, line 4a). If only part of the dis-
tribution is taxable, enter the total amount on
Form 1040 or 1040-SR, line 4a, and the taxable
part on Form 1040 or 1040-SR, line 4b.
What Acts Result in
Penalties or Additional
Taxes?
The tax advantages of using traditional IRAs for
retirement savings can be offset by additional
taxes and penalties if you don't follow the rules.
There are additions to the regular tax for us-
ing your IRA funds in prohibited transactions.
There are also additional taxes for the following
activities.
• Investing in collectibles.
• Having unrelated business income; see
Pub. 590-B.
• Making excess contributions.
• Taking early distributions.
• Allowing excess amounts to accumulate
(failing to take required distributions).
There are penalties for overstating the
amount of nondeductible contributions and for
failure to file a Form 8606, if required.
Prohibited Transactions
Generally, a prohibited transaction is any im-
proper use of your traditional IRA by you, your
beneficiary, or any disqualified person.
Disqualified persons include your fiduciary
and members of your family (spouse, ancestor,
lineal descendent, and any spouse of a lineal
descendent).
The following are examples of prohibited
transactions with a traditional IRA.
• Borrowing money from it; see Pub. 590-B.
• Selling property to it.
• Using it as security for a loan.
• Buying property for personal use (present
or future) with IRA funds.
Effect on an IRA account. Generally, if you or
your beneficiary engages in a prohibited trans-
action in connection with your traditional IRA
account at any time during the year, the ac-
count stops being an IRA as of the first day of
that year.
Effect on you or your beneficiary. If your ac-
count stops being an IRA because you or your
beneficiary engaged in a prohibited transaction,
the account is treated as distributing all its as-
sets to you at their fair market values on the first
day of the year. If the total of those values is
more than your basis in the IRA, you will have a
taxable gain that is includible in your income.
For information on figuring your gain and report-
ing it in income, see Are Distributions Taxable,
earlier. The distribution may be subject to addi-
tional taxes or penalties.
Taxes on prohibited transactions. If some-
one other than the owner or beneficiary of a tra-
ditional IRA engages in a prohibited transaction,
that person may be liable for certain taxes. In
general, there is a 15% tax on the amount of the
prohibited transaction and a 100% additional
tax if the transaction isn't corrected.
More information. For more information on
prohibited transactions, see What Acts Result
in Penalties or Additional Taxes? in chapter 1 of
Pub. 590-A.
Investment in Collectibles
If your traditional IRA invests in collectibles, the
amount invested is considered distributed to
you in the year invested. You may have to pay
the 10% additional tax on early distributions,
discussed later.
Collectibles. These include:
• Artworks,
• Rugs,
• Antiques,
• Metals,
• Gems,
• Stamps,
• Coins,
• Alcoholic beverages, and
• Certain other tangible personal property.
Exception. Your IRA can invest in one-,
one-half-, one-quarter-, or one-tenth-ounce
U.S. gold coins, or one-ounce silver coins min-
ted by the Treasury Department. It can also in-
vest in certain platinum coins and certain gold,
silver, palladium, and platinum bullion.
Excess Contributions
Generally, an excess contribution is the amount
contributed to your traditional IRA(s) for the
year that is more than the smaller of:
• The maximum deductible amount for the
year (for 2021, this is $6,000 ($7,000 if you
are 50 or older)); or
• Your taxable compensation for the year.
An excess contribution could be the result of
your contribution, your spouse's contribution,
your employer's contribution, or an improper
rollover contribution. If your employer makes
contributions on your behalf to a SEP IRA, see
chapter 2 of Pub. 560.
Tax on excess contributions. In general, if
the excess contributions for a year aren't with-
drawn by the date your return for the year is due
(including extensions), you are subject to a 6%
tax. You must pay the 6% tax each year on ex-
cess amounts that remain in your traditional IRA
at the end of your tax year. The tax can't be
more than 6% of the combined value of all your
IRAs as of the end of your tax year. The addi-
tional tax is figured on Form 5329.
Excess contributions withdrawn by due
date of return. You won't have to pay the 6%
tax if you withdraw an excess contribution made
during a tax year and you also withdraw interest
or other income earned on the excess contribu-
tion. You must complete your withdrawal by the
date your tax return for that year is due, includ-
ing extensions.
How to treat withdrawn contributions.
Don't include in your gross income an excess
contribution that you withdraw from your tradi-
tional IRA before your tax return is due if both
the following conditions are met.
• No deduction was allowed for the excess
contribution.
• You withdraw the interest or other income
earned on the excess contribution.
You can take into account any loss on the con-
tribution while it was in the IRA when figuring
the amount that must be withdrawn. If there was
a loss, the net income you must withdraw may
be a negative amount.
How to treat withdrawn interest or other
income. You must include in your gross in-
come the interest or other income that was
earned on the excess contribution. Report it on
your return for the year in which the excess con-
tribution was made. Your withdrawal of interest
or other income may be subject to an additional
10% tax on early distributions, discussed later.
Excess contributions withdrawn after due
date of return. In general, you must include all
distributions (withdrawals) from your traditional
IRA in your gross income. However, if the fol-
lowing conditions are met, you can withdraw
Chapter 9 Individual Retirement Arrangements (IRAs) Page 85
excess contributions from your IRA and not in-
clude the amount withdrawn in your gross in-
come.
• Total contributions (other than rollover con-
tributions) for 2021 to your IRA weren't
more than $6,000 ($7,000 if you are 50 or
older).
• You didn't take a deduction for the excess
contribution being withdrawn.
The withdrawal can take place at any time,
even after the due date, including extensions,
for filing your tax return for the year.
Excess contribution deducted in an earlier
year. If you deducted an excess contribution in
an earlier year for which the total contributions
weren't more than the maximum deductible
amount for that year (see the following table),
you can still remove the excess from your tradi-
tional IRA and not include it in your gross in-
come. To do this, file Form 1040-X for that year
and don't deduct the excess contribution on the
amended return. Generally, you can file an
amended return within 3 years after you filed
your return or 2 years from the time the tax was
paid, whichever is later.
Year(s)
Contribution
limit
Contribution
limit if 50 or
older at the
end of the
year
2019 $6,000 $7,000
2013 through
2018 $5,500 $6,500
2008 through
2012 $5,000 $6,000
2006 or 2007 $4,000 $5,000
2005 $4,000 $4,500
2002 through
2004 $3,000 $3,500
1997 through
2001 $2,000 —
before 1997 $2,250 —
Excess due to incorrect rollover informa-
tion. If an excess contribution in your tradi-
tional IRA is the result of a rollover and the ex-
cess occurred because the information the plan
was required to give you was incorrect, you can
withdraw the excess contribution. The limits
mentioned above are increased by the amount
of the excess that is due to the incorrect infor-
mation. You will have to amend your return for
the year in which the excess occurred to correct
the reporting of the rollover amounts in that
year. Don't include in your gross income the
part of the excess contribution caused by the in-
correct information. For more information, see
Excess Contributions under What Acts Result in
Penalties or Additional Taxes? in Pub. 590-A.
Early Distributions
You must include early distributions of taxable
amounts from your traditional IRA in your gross
income. Early distributions are also subject to
an additional 10% tax. See the discussion of
Form 5329 under Reporting Additional Taxes,
later, to figure and report the tax.
Early distributions defined. Early distribu-
tions are generally amounts distributed from
your traditional IRA account or annuity before
you are age 591/2.
Age 591/2 rule. Generally, if you are under age
591/2, you must pay a 10% additional tax on the
distribution of any assets (money or other prop-
erty) from your traditional IRA. Distributions be-
fore you are age 591/2 are called early distribu-
tions.
The 10% additional tax applies to the part of
the distribution that you have to include in gross
income. It is in addition to any regular income
tax on that amount.
After age 591/2 and before age 72. After
you reach age 591/2, you can receive distribu-
tions without having to pay the 10% additional
tax. Even though you can receive distributions
after you reach age 591/2, distributions aren't re-
quired until you reach age 72. See When Must
You Withdraw IRA Assets? (Required Minimum
Distributions), earlier.
Exceptions. There are several exceptions
to the age 591/2 rule. Even if you receive a distri-
bution before you are age 591/2, you may not
have to pay the 10% additional tax if you are in
one of the following situations.
• You have unreimbursed medical expenses
that are more than 7.5% of your AGI.
• The distributions aren't more than the cost
of your medical insurance due to a period
of unemployment.
• You are totally and permanently disabled.
• You are the beneficiary of a deceased IRA
owner.
• You are receiving distributions in the form
of an annuity.
• The distributions aren't more than your
qualified higher education expenses.
• You use the distributions to buy, build, or
rebuild a first home.
• The distribution is due to an IRS levy of the
qualified plan.
• The distribution is a qualified reservist dis-
tribution.
Most of these exceptions are explained under
Early Distributions in What Acts Result in Penal-
ties or Additional Taxes? in chapter 1 of Pub.
590-B.
Note. Distributions that are timely and prop-
erly rolled over, as discussed earlier, aren't sub-
ject to either regular income tax or the 10% ad-
ditional tax. Certain withdrawals of excess
contributions after the due date of your return
are also tax free and therefore not subject to the
10% additional tax. (See Excess contributions
withdrawn after due date of return, earlier.) This
also applies to transfers incident to divorce, as
discussed earlier.
Receivership distributions. Early distribu-
tions (with or without your consent) from sav-
ings institutions placed in receivership are sub-
ject to this tax unless one of the exceptions
listed earlier applies. This is true even if the dis-
tribution is from a receiver that is a state
agency.
Additional 10% tax. The additional tax on
early distributions is 10% of the amount of the
early distribution that you must include in your
gross income. This tax is in addition to any reg-
ular income tax resulting from including the dis-
tribution in income.
Nondeductible contributions. The tax on
early distributions doesn't apply to the part of a
distribution that represents a return of your non-
deductible contributions (basis).
More information. For more information on
early distributions, see What Acts Result in
Penalties or Additional Taxes? in chapter 1 of
Pub. 590-B.
Excess Accumulations
(Insufficient Distributions)
You can't keep amounts in your traditional IRA
indefinitely. Generally, you must begin receiving
distributions by April 1 of the year following the
year in which you reach age 72. The required
minimum distribution for any year after the year
in which you reach age 72 must be made by
December 31 of that later year.
Tax on excess. If distributions are less than
the required minimum distribution for the year,
you may have to pay a 50% excise tax for that
year on the amount not distributed as required.
Request to waive the tax. If the excess accu-
mulation is due to reasonable error, and you
have taken, or are taking, steps to remedy the
insufficient distribution, you can request that the
tax be waived. If you believe you qualify for this
relief, attach a statement of explanation and
complete Form 5329 as instructed under
Waiver of tax for reasonable cause in the In-
structions for Form 5329.
Exemption from tax. If you are unable to take
required distributions because you have a tradi-
tional IRA invested in a contract issued by an in-
surance company that is in state insurer delin-
quency proceedings, the 50% excise tax
doesn't apply if the conditions and requirements
of Revenue Procedure 92-10 are satisfied.
More information. For more information on
excess accumulations, see What Acts Result in
Penalties or Additional Taxes? in chapter 1 of
Pub. 590-B.
Reporting Additional Taxes
Generally, you must use Form 5329 to report
the tax on excess contributions, early distribu-
tions, and excess accumulations.
Filing a tax return. If you must file an individ-
ual income tax return, complete Form 5329 and
attach it to your Form 1040 or 1040-SR. Enter
the total additional taxes due on Schedule 2
(Form 1040), line 8.
Not filing a tax return. If you don't have to file
a tax return but do have to pay one of the addi-
tional taxes mentioned earlier, file the comple-
ted Form 5329 with the IRS at the time and
place you would have filed your Form 1040 or
1040-SR. Be sure to include your address on
page 1 and your signature and date on page 2.
Enclose, but don't attach, a check or money or-
der payable to “United States Treasury” for the
Page 86 Chapter 9 Individual Retirement Arrangements (IRAs)
tax you owe, as shown on Form 5329. Enter
your social security number and “2021 Form
5329” on your check or money order.
Form 5329 not required. You don't have to
use Form 5329 if any of the following situations
exists.
• Distribution code 1 (early distribution) is
correctly shown in box 7 of all your Forms
1099-R. If you don't owe any other addi-
tional tax on a distribution, multiply the tax-
able part of the early distribution by 10%
(0.10) and enter the result on Schedule 2
(Form 1040), line 8. Enter “No” to the left of
the line to indicate that you don't have to
file Form 5329. However, if you owe this
tax and also owe any other additional tax
on a distribution, don't enter this 10% addi-
tional tax directly on your Form 1040 or
1040-SR. You must file Form 5329 to re-
port your additional taxes.
• If you rolled over part or all of a distribution
from a qualified retirement plan, the part
rolled over isn't subject to the tax on early
distributions.
• If you have a qualified disaster distribution.
Roth IRAs
Regardless of your age, you may be able to es-
tablish and make nondeductible contributions to
a retirement plan called a Roth IRA.
Contributions not reported. You don't report
Roth IRA contributions on your return.
What Is a Roth IRA?
A Roth IRA is an individual retirement plan that,
except as explained in this chapter, is subject to
the rules that apply to a traditional IRA (defined
earlier). It can be either an account or an annu-
ity. Individual retirement accounts and annuities
are described under How Can a Traditional IRA
Be Opened? in chapter 1 of Pub. 590-A.
To be a Roth IRA, the account or annuity
must be designated as a Roth IRA when it is
opened. A deemed IRA can be a Roth IRA, but
neither a SEP IRA nor a SIMPLE IRA can be
designated as a Roth IRA.
Unlike a traditional IRA, you can't deduct
contributions to a Roth IRA. But, if you satisfy
the requirements, qualified distributions (dis-
cussed later) are tax free. You can leave
amounts in your Roth IRA as long as you live.
When Can a Roth IRA Be
Opened?
You can open a Roth IRA at any time. However,
the time for making contributions for any year is
limited. See When Can You Make Contributions
under Can You Contribute to a Roth IRA? next.
Can You Contribute to a
Roth IRA?
Generally, you can contribute to a Roth IRA if
you have taxable compensation (defined later)
and your modified AGI (defined later) is less
than:
• $208,000 for married filing jointly or qualify-
ing widow(er);
• $140,000 for single, head of household, or
married filing separately and you didn't live
with your spouse at any time during the
year; or
• $10,000 for married filing separately and
you lived with your spouse at any time dur-
ing the year.
You may be eligible to claim a credit for
contributions to your Roth IRA. For
more information, see chapter 3 of
Pub. 590-A.
Is there an age limit for contributions? Con-
tributions can be made to your Roth IRA regard-
less of your age.
Can you contribute to a Roth IRA for your
spouse? You can contribute to a Roth IRA for
your spouse provided the contributions satisfy
the Kay Bailey Hutchison Spousal IRA limit (dis-
cussed under How Much Can Be Contributed,
earlier, under Traditional IRAs), you file jointly,
and your modified AGI is less than $208,000.
Compensation. Compensation includes wa-
ges, salaries, tips, professional fees, bonuses,
and other amounts received for providing per-
sonal services. It also includes commissions,
self-employment income, nontaxable combat
pay, military differential pay, and taxable ali-
mony and separate maintenance payments.
Modified AGI. Your modified AGI for Roth IRA
purposes is your AGI as shown on your return
with some adjustments. Use Worksheet 9-2 to
determine your modified AGI.TIP
Chapter 9 Individual Retirement Arrangements (IRAs) Page 87
Worksheet 9-2. Modified AGI for Roth IRA Purposes Keep for Your Records
Use this worksheet to figure your modified AGI for Roth IRA purposes.
1. Enter your AGI from Form 1040 or 1040-SR, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter any income resulting from the conversion of an IRA (other than a Roth IRA) to a Roth
IRA (included on Form 1040 or 1040-SR, line 4b) and a rollover from a qualified retirement
plan to a Roth IRA (included on Form 1040 or 1040-SR, line 5b) . . . . . . . . . . . . . . . . . . . . . 2.
3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter any traditional IRA deduction from Schedule 1 (Form 1040), line 20 . . . . . . . . . . . . . . 4.
5. Enter any student loan interest deduction from Schedule 1 (Form 1040), line 21 . . . . . . . . . 5.
6. Enter any foreign earned income and/or housing exclusion from Form 2555, line 45 . . . . . . 6.
7. Enter any foreign housing deduction from Form 2555, line 50 . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter any excludable savings bond interest from Form 8815, line 14 . . . . . . . . . . . . . . . . . . 8.
9. Enter any excluded employer-provided adoption benefits from Form 8839, line 28 . . . . . . . 9.
10. Add the amounts on lines 3 through 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Enter:
• $208,000 if married filing jointly or qualifying widow(er),
• $10,000 if married filing separately and you lived with your
spouse at any time during the year, or
• $140,000 for all others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Is the amount on line 10 more than the amount on line 11?
If yes, then see the Note below.
If no, then the amount on line 10 is your modified AGI for Roth IRA purposes.
Note. If the amount on line 10 is more than the amount on line 11 and you have other income or loss items, such as social
security income or passive activity losses, that are subject to AGI-based phaseouts, you can refigure your AGI solely for the
purpose of figuring your modified AGI for Roth IRA purposes. (If you receive social security benefits, use Worksheet 1 in
Appendix B of Pub. 590-A to refigure your AGI.) Then, go to line 3 above in this Worksheet 9-2 to refigure your modified AGI. If
you don't have other income or loss items subject to AGI-based phaseouts, your modified AGI for Roth IRA purposes is the
amount on line 10.
How Much Can Be Contributed?
The contribution limit for Roth IRAs generally
depends on whether contributions are made
only to Roth IRAs or to both traditional IRAs and
Roth IRAs.
Roth IRAs only. If contributions are made only
to Roth IRAs, your contribution limit is generally
the lesser of the following amounts.
• $6,000 ($7,000 if you are 50 or older in
2021).
• Your taxable compensation.
However, if your modified AGI is above a cer-
tain amount, your contribution limit may be re-
duced, as explained later under Contribution
limit reduced.
Roth IRAs and traditional IRAs. If contribu-
tions are made to both Roth IRAs and tradi-
tional IRAs established for your benefit, your
contribution limit for Roth IRAs is generally the
same as your limit would be if contributions
were made only to Roth IRAs, but then reduced
by all contributions for the year to all IRAs other
than Roth IRAs. Employer contributions under a
SEP or SIMPLE IRA plan don't affect this limit.
This means that your contribution limit is
generally the lesser of the following amounts.
• $6,000 ($7,000 if you are 50 or older in
2021) minus all contributions (other than
employer contributions under a SEP or
SIMPLE IRA plan) for the year to all IRAs
other than Roth IRAs.
• Your taxable compensation minus all con-
tributions (other than employer contribu-
tions under a SEP or SIMPLE IRA plan) for
the year to all IRAs other than Roth IRAs.
However, if your modified AGI is above a cer-
tain amount, your contribution limit may be re-
duced, as explained next under Contribution
limit reduced.
Contribution limit reduced. If your modified
AGI is above a certain amount, your contribu-
tion limit is gradually reduced. Use Table 9-3 to
determine if this reduction applies to you.
Page 88 Chapter 9 Individual Retirement Arrangements (IRAs)
Table 9-3. Effect of Modified AGI on Roth IRA Contribution
This table shows whether your contribution to a Roth IRA is affected by the amount of your modified AGI.
IF you have taxable compensation and
your filing status is...
AND your modified
AGI is... THEN...
Married filing jointly or
Qualifying widow(er)
less than $198,000 you can contribute up to $6,000 ($7,000 if you are 50 or
older in 2021).
at least $198,000
but less than $208,000
the amount you can contribute is reduced as explained
under Contribution limit reduced in chapter 2 of Pub.
590-A.
$208,000 or more you can't contribute to a Roth IRA.
Married filing separately and you lived
with your spouse at any time during the year
zero (-0-) you can contribute up to $6,000 ($7,000 if you are 50 or
older in 2021).
more than zero (-0-)
but less than $10,000
the amount you can contribute is reduced as explained
under Contribution limit reduced in chapter 2 of Pub.
590-A.
$10,000 or more you can't contribute to a Roth IRA.
Single, Head of household, or Married
filing separately and you didn't live with
your spouse at any time during the year
less than $125,000 you can contribute up to $6,000 ($7,000 if you are 50 or
older in 2021).
at least $125,000
but less than $140,000
the amount you can contribute is reduced as explained
under Contribution limit reduced in chapter 2 of Pub.
590-A.
$140,000 or more you can't contribute to a Roth IRA.
Figuring the reduction. If the amount you
can contribute to your Roth IRA is reduced, see
Worksheet 2-2 under Can You Contribute to a
Roth IRA? in chapter 2 of Pub. 590-A for how to
figure the reduction.
When Can You Make
Contributions?
You can make contributions to a Roth IRA for a
year at any time during the year or by the due
date of your return for that year (not including
extensions).
You can make contributions for 2021
by the due date (not including exten-
sions) for filing your 2021 tax return.
What if You Contribute Too Much?
A 6% excise tax applies to any excess contribu-
tion to a Roth IRA.
Excess contributions. These are the contri-
butions to your Roth IRAs for a year that equal
the total of:
1. Amounts contributed for the tax year to
your Roth IRAs (other than amounts prop-
erly and timely rolled over from a Roth IRA
or properly converted from a traditional
IRA or rolled over from a qualified retire-
ment plan, as described later) that are
more than your contribution limit for the
year; plus
2. Any excess contributions for the preceding
year, reduced by the total of:
a. Any distributions out of your Roth
IRAs for the year, plus
b. Your contribution limit for the year mi-
nus your contributions to all your IRAs
for the year.TIP
Withdrawal of excess contributions. For
purposes of determining excess contributions,
any contribution that is withdrawn on or before
the due date (including extensions) for filing
your tax return for the year is treated as an
amount not contributed. This treatment applies
only if any earnings on the contributions are
also withdrawn. The earnings are considered to
have been earned and received in the year the
excess contribution was made.
Applying excess contributions. If contribu-
tions to your Roth IRA for a year were more
than the limit, you can apply the excess contri-
bution in one year to a later year if the contribu-
tions for that later year are less than the maxi-
mum allowed for that year.
Can You Move Amounts
Into a Roth IRA?
You may be able to convert amounts from either
a traditional, SEP, or SIMPLE IRA into a Roth
IRA. You may be able to roll amounts over from
a qualified retirement plan to a Roth IRA. You
may be able to recharacterize contributions
made to one IRA as having been made directly
to a different IRA. You can roll amounts over
from a designated Roth account or from one
Roth IRA to another Roth IRA.
Conversions
You can convert a traditional IRA to a Roth IRA.
The conversion is treated as a rollover, regard-
less of the conversion method used. Most of the
rules for rollovers, described earlier under Roll-
over From One IRA Into Another under Tradi-
tional IRAs, apply to these rollovers. However,
the 1-year waiting period doesn't apply.
Conversion methods. You can convert
amounts from a traditional IRA to a Roth IRA in
any of the following ways.
• Rollover. You can receive a distribution
from a traditional IRA and roll it over (con-
tribute it) to a Roth IRA within 60 days after
the distribution.
• Trustee-to-trustee transfer. You can di-
rect the trustee of the traditional IRA to
transfer an amount from the traditional IRA
to the trustee of the Roth IRA.
• Same trustee transfer. If the trustee of
the traditional IRA also maintains the Roth
IRA, you can direct the trustee to transfer
an amount from the traditional IRA to the
Roth IRA.
Same trustee. Conversions made with the
same trustee can be made by redesignating the
traditional IRA as a Roth IRA, rather than open-
ing a new account or issuing a new contract.
Rollover from a qualified retirement plan
into a Roth IRA. You can roll over into a Roth
IRA all or part of an eligible rollover distribution
you receive from your (or your deceased spou-
se's):
• Employer's qualified pension, profit-shar-
ing, or stock bonus plan;
• Annuity plan;
• Tax-sheltered annuity plan (section 403(b)
plan); or
• Governmental deferred compensation plan
(section 457 plan).
Any amount rolled over is subject to the same
rules as those for converting a traditional IRA
into a Roth IRA. Also, the rollover contribution
must meet the rollover requirements that apply
to the specific type of retirement plan.
Chapter 9 Individual Retirement Arrangements (IRAs) Page 89
Income. You must include in your gross in-
come distributions from a qualified retirement
plan that you would have had to include in in-
come if you hadn't rolled them over into a Roth
IRA. You don't include in gross income any part
of a distribution from a qualified retirement plan
that is a return of basis (after-tax contributions)
to the plan that was taxable to you when paid.
These amounts are normally included in income
on your return for the year of the rollover from
the qualified employer plan to a Roth IRA.
If you must include any amount in your
gross income, you may have to in-
crease your withholding or make esti-
mated tax payments. See Pub. 505, Tax With-
holding and Estimated Tax.
For more information, see Rollover From
Employer's Plan Into a Roth IRA in chapter 2 of
Pub. 590-A.
Converting from a SIMPLE IRA. Generally,
you can convert an amount in your SIMPLE IRA
to a Roth IRA under the same rules explained
earlier under Converting From Any Traditional
IRA to a Roth IRA under Traditional IRAs.
However, you can't convert any amount dis-
tributed from the SIMPLE IRA plan during the
2-year period beginning on the date you first
participated in any SIMPLE IRA plan main-
tained by your employer.
More information. For more detailed informa-
tion on conversions, see Can You Move
Amounts Into a Roth IRA? of chapter 2 of Pub.
590-A.
Rollover From a Roth IRA
You can withdraw, tax free, all or part of the as-
sets from one Roth IRA if you contribute them
within 60 days to another Roth IRA. Most of the
rules for rollovers, explained earlier under Roll-
over From One IRA Into Another under Tradi-
tional IRAs, apply to these rollovers.
Rollover from designated Roth account. A
rollover from a designated Roth account canCAUTION
!
only be made to another designated Roth ac-
count or to a Roth IRA. For more information
about designated Roth accounts, see Designa-
ted Roth accounts under Rollovers in Pub. 575.
Are Distributions Taxable?
You don't include in your gross income qualified
distributions or distributions that are a return of
your regular contributions from your Roth
IRA(s). You also don't include distributions from
your Roth IRA that you roll over tax free into an-
other Roth IRA. You may have to include part of
other distributions in your income. See Ordering
rules for distributions, later.
What are qualified distributions? A qualified
distribution is any payment or distribution from
your Roth IRA that meets the following require-
ments.
1. It is made after the 5-year period begin-
ning with the first tax year for which a con-
tribution was made to a Roth IRA set up
for your benefit.
2. The payment or distribution is:
a. Made on or after the date you reach
age 591/2,
b. Made because you are disabled,
c. Made to a beneficiary or to your es-
tate after your death, or
d. To pay up to $10,000 (lifetime limit) of
certain qualified first-time homebuyer
amounts. See First home under What
Acts Result in Penalties or Additional
Taxes? in chapter 1 of Pub. 590-B for
more information.
Additional tax on distributions of conver-
sion and certain rollover contributions
within 5-year period. If, within the 5-year pe-
riod starting with the first day of your tax year in
which you convert an amount from a traditional
IRA or roll over an amount from a qualified re-
tirement plan to a Roth IRA, you take a distribu-
tion from a Roth IRA, you may have to pay the
10% additional tax on early distributions. You
must generally pay the 10% additional tax on
any amount attributable to the part of the
amount converted or rolled over (the conversion
or rollover contribution) that you had to include
in income. A separate 5-year period applies to
each conversion and rollover. See Ordering
rules for distributions, later, to determine the
amount, if any, of the distribution that is attribut-
able to the part of the conversion or rollover
contribution that you had to include in income.
Additional tax on other early distributions.
Unless an exception applies, you must pay the
10% additional tax on the taxable part of any
distributions that aren't qualified distributions.
See Pub. 590-B for more information.
Ordering rules for distributions. If you re-
ceive a distribution from your Roth IRA that isn't
a qualified distribution, part of it may be taxable.
There is a set order in which contributions (in-
cluding conversion contributions and rollover
contributions from qualified retirement plans)
and earnings are considered to be distributed
from your Roth IRA. Regular contributions are
distributed first. See Ordering Rules for Distri-
butions under Are Distributions Taxable? in
chapter 2 of Pub. 590-B for more information.
Must you withdraw or use Roth IRA assets?
You aren't required to take distributions from
your Roth IRA at any age. The minimum distri-
bution rules that apply to traditional IRAs don't
apply to Roth IRAs while the owner is alive.
However, after the death of a Roth IRA owner,
certain minimum distribution rules that apply to
traditional IRAs also apply to Roth IRAs.
More information. For more detailed informa-
tion on Roth IRAs, see chapter 2 of Pub. 590-A
and Pub. 590-B.
Page 90 Chapter 9 Individual Retirement Arrangements (IRAs)
Part Three.
Standard
Deduction,
Itemized
Deductions, and
Other
Deductions
After you have figured your adjusted gross income, you are ready to
subtract the deductions used to figure taxable income. You can subtract
either the standard deduction or itemized deductions, and, if you qualify,
the qualified business income deduction. Itemized deductions are
deductions for certain expenses that are listed on Schedule A (Form 1040).
The three chapters in this part discuss the standard deduction and each
itemized deduction. See chapter 10 for the factors to consider when
deciding whether to take the standard deduction or itemized deductions.
The Form 1040 and 1040-SR schedules that are discussed in these
chapters are:
• Schedule 1, Additional Income and Adjustments to Income;
• Schedule 2 (Part II), Other Taxes; and
• Schedule 3 (Part I), Nonrefundable Credits.
10.
Standard
Deduction
What's New
Standard deduction increased. The stand-
ard deduction for taxpayers who don't itemize
their deductions on Schedule A (Form 1040)
has increased. The amount of your standard
deduction depends on your filing status and
other factors. Use the 2021 Standard Deduction
Tables near the end of this chapter to figure
your standard deduction.
If you elect to not itemize your deduc-
tions in 2021, you may qualify to take a
deduction for charitable contributions
of up to $300 ($600 in the case of a joint return).
For more information see Pub. 526, Charitable
Contributions.
Introduction
This chapter discusses the following topics.
• How to figure the amount of your standard
deduction.
• The standard deduction for dependents.
• Who should itemize deductions.
Most taxpayers have a choice of either tak-
ing a standard deduction or itemizing their de-
ductions. If you have a choice, you can use the
method that gives you the lower tax.
The standard deduction is a dollar amount
that reduces your taxable income. It is a benefit
that eliminates the need for many taxpayers to
itemize actual deductions, such as medical
expenses, charitable contributions, and taxes,TIP
on Schedule A (Form 1040). The standard de-
duction is higher for taxpayers who:
• Are 65 or older, or
• Are blind.
You benefit from the standard deduc-
tion if your standard deduction is more
than the total of your allowable item-
ized deductions.
Persons not eligible for the standard de-
duction. Your standard deduction is zero and
you should itemize any deductions you have if:
• Your filing status is married filing sepa-
rately, and your spouse itemizes deduc-
tions on their return;
• You are filing a tax return for a short tax
year because of a change in your annual
accounting period; or
• You are a nonresident or dual-status alien
during the year. You are considered a
dual-status alien if you were both a nonres-
ident and resident alien during the year.
If you are a nonresident alien who is married
to a U.S. citizen or resident alien at the end of
the year, you can choose to be treated as a
U.S. resident. (See Pub. 519.) If you make this
choice, you can take the standard deduction.
If you can be claimed as a dependent
on another person’s return (such as
your parents’ return), your standard de-
duction may be limited. See Standard Deduc-
tion for Dependents, later.
Useful Items
You may want to see:
Publication
501 Dependents, Standard Deduction,
and Filing Information
502 Medical and Dental Expenses
526 Charitable ContributionsTIPCAUTION
!
530 Tax Information for Homeowners
547 Casualties, Disasters, and Thefts
550 Investment Income and Expenses
970 Tax Benefits for Education
936 Home Mortgage Interest Deduction
Form (and Instructions)
Schedule A (Form 1040) Itemized
Deductions
Standard Deduction
Amount
The standard deduction amount depends on
your filing status, whether you are 65 or older or
blind, and whether another taxpayer can claim
you as a dependent. Generally, the standard
deduction amounts are adjusted each year for
inflation. The standard deduction amounts for
most people are shown in Table 10-1.
Decedent's final return. The standard deduc-
tion for a decedent's final tax return is the same
as it would have been had the decedent contin-
ued to live. However, if the decedent wasn't 65
or older at the time of death, the higher stand-
ard deduction for age can't be claimed.
Higher Standard
Deduction for Age (65 or
Older)
If you are age 65 or older on the last day of the
year and don't itemize deductions, you are enti-
tled to a higher standard deduction. You are
considered 65 on the day before your 65th
birthday. Therefore, you can take a higher
standard deduction for 2021 if you were born
before January 2, 1957.
Use Table 10-2 to figure the standard de-
duction amount.
Death of a taxpayer. If you are preparing a re-
turn for someone who died in 2021, read this
Schedule A (Form 1040)
Chapter 10 Standard Deduction Page 91
before using Table 10-2 or Table 10-3. Con-
sider the taxpayer to be 65 or older at the end of
2021 only if they were 65 or older at the time of
death. Even if the taxpayer was born before
January 2, 1957, they are not considered 65 or
older at the end of 2021 unless they were 65 or
older at the time of death.
A person is considered to reach age 65 on
the day before their 65th birthday.
Higher Standard
Deduction for Blindness
If you are blind on the last day of the year and
you don't itemize deductions, you are entitled to
a higher standard deduction.
Not totally blind. If you aren't totally blind, you
must get a certified statement from an eye doc-
tor (ophthalmologist or optometrist) that:
• You can't see better than 20/200 in the bet-
ter eye with glasses or contact lenses, or
• Your field of vision is 20 degrees or less.
If your eye condition isn't likely to improve
beyond these limits, the statement should in-
clude this fact. Keep the statement in your re-
cords.
If your vision can be corrected beyond these
limits only by contact lenses that you can wear
only briefly because of pain, infection, or ulcers,
you can take the higher standard deduction for
blindness if you otherwise qualify.
Spouse 65 or Older or
Blind
You can take the higher standard deduction if
your spouse is age 65 or older or blind and:
• You file a joint return, or
• You file a separate return and your spouse
had no gross income and can't be claimed
as a dependent by another taxpayer.
Death of a spouse. If your spouse died in
2021 before reaching age 65, you can't take a
higher standard deduction because of your
spouse. Even if your spouse was born before
January 2, 1957, he or she isn't considered 65
or older at the end of 2021 unless he or she was
65 or older at the time of death.
A person is considered to reach age 65 on
the day before their 65th birthday.
Example. Your spouse was born on Febru-
ary 14, 1956, and died on February 13, 2021.
Your spouse is considered age 65 at the time of
death. However, if your spouse died on Febru-
ary 12, 2021, your spouse isn't considered age
65 at the time of death and isn't 65 or older at
the end of 2021.
You can't claim the higher standard de-
duction for an individual other than
yourself and your spouse.CAUTION
!
Higher Standard
Deduction for Net Disaster
Loss
Your standard deduction may be increased by
any net qualified disaster loss.
See the Instructions for Form 1040 and the
Instructions for Schedule A (Form 1040) for
more information on how to figure your in-
creased standard deduction and how to report it
on Form 1040 or 1040-SR.
Examples
The following examples illustrate how to deter-
mine your standard deduction using Tables
10-1 and 10-2.
Example 1. Larry, 46, and Donna, 33, are
filing a joint return for 2021. Neither is blind, and
neither can be claimed as a dependent. They
decide not to itemize their deductions. They use
Table 10-1. Their standard deduction is
$25,100.
Example 2. The facts are the same as in
Example 1, except that Larry is blind at the end
of 2021. Larry and Donna use Table 10-2. Their
standard deduction is $26,450.
Example 3. Bill and Lisa are filing a joint re-
turn for 2021. Both are over age 65. Neither is
blind, and neither can be claimed as a depend-
ent. If they don't itemize deductions, they use
Table 10-2. Their standard deduction is
$27,800.
Standard Deduction
for Dependents
The standard deduction for an individual who
can be claimed as a dependent on another per-
son's tax return is generally limited to the
greater of:
• $1,100, or
• The individual's earned income for the year
plus $350 (but not more than the regular
standard deduction amount, generally
$12,550).
However, if the individual is 65 or older or
blind, the standard deduction may be higher.
If you (or your spouse, if filing jointly) can be
claimed as a dependent on someone else's re-
turn, use Table 10-3 to determine your standard
deduction.
Earned income defined. Earned income is
salaries, wages, tips, professional fees, and
other amounts received as pay for work you ac-
tually perform.
For purposes of the standard deduction,
earned income also includes any part of a taxa-
ble scholarship or fellowship grant. See chap-
ter 1 of Pub. 970, Tax Benefits for Education,
for more information on what qualifies as a
scholarship or fellowship grant.
Example 1. Michael is 16 years old and
single. His parents can claim him as a depend-
ent on their 2021 tax return. He has interest
income of $780 and wages of $150. He has no
itemized deductions. Michael uses Table 10-3
to find his standard deduction. He enters $150
(his earned income) on line 1, $500 ($150 +
$350) on line 3, $1,100 (the larger of $500 and
$1,100) on line 5, and $12,550 on line 6. His
standard deduction, on line 7a, is $1,100 (the
smaller of $1,100 and $12,550).
Example 2. Joe, a 22-year-old college stu-
dent, can be claimed as a dependent on his pa-
rents' 2021 tax return. Joe is married and files a
separate return. His wife doesn't itemize deduc-
tions on her separate return. Joe has $1,500 in
interest income and wages of $3,800. He has
no itemized deductions. Joe finds his standard
deduction by using Table 10-3. He enters his
earned income, $3,800, on line 1. He adds lines
1 and 2 and enters $4,150 ($3,800 + $350) on
line 3. On line 5, he enters $4,150, the larger of
lines 3 and 4. Because Joe is married filing a
separate return, he enters $12,550 on line 6. On
line 7a, he enters $4,150 as his standard de-
duction because it is smaller than $12,550, the
amount on line 6.
Example 3. Amy, who is single, can be
claimed as a dependent on her parents' 2021
tax return. She is 18 years old and blind. She
has interest income of $1,300 and wages of
$2,900. She has no itemized deductions. Amy
uses Table 10-3 to find her standard deduction.
She enters her wages of $2,900 on line 1. She
adds lines 1 and 2 and enters $3,250 ($2,900 +
$350) on line 3. On line 5, she enters $3,250,
the larger of lines 3 and 4. Because she is sin-
gle, Amy enters $12,550 on line 6. She enters
$3,250 on line 7a. This is the smaller of the
amounts on lines 5 and 6. Because she
checked the box in the top part of the work-
sheet, indicating she is blind, she enters $1,700
on line 7b. She then adds the amounts on lines
7a and 7b and enters her standard deduction of
$4,950 ($3,250 + $1,700) on line 7c.
Example 4. Ed is 18 years old and single.
His parents can claim him as a dependent on
their 2021 tax return. He has wages of $7,000,
interest income of $500, and a business loss of
$3,000. He has no itemized deductions. Ed
uses Table 10-3 to figure his standard deduc-
tion. He enters $4,000 ($7,000 − $3,000) on
line 1. He adds lines 1 and 2 and enters $4,350
($4,000 + $350) on line 3. On line 5, he enters
$4,350, the larger of lines 3 and 4. Because he
is single, Ed enters $12,550 on line 6. On
line 7a, he enters $4,350 as his standard de-
duction because it is smaller than $12,550, the
amount on line 6.
Who Should Itemize
You should itemize deductions if your total de-
ductions are more than your standard deduc-
tion amount. Also, you should itemize if you
don't qualify for the standard deduction, as dis-
cussed earlier under Persons not eligible for the
standard deduction.
You should first figure your itemized deduc-
tions and compare that amount to your stand-
ard deduction to make sure you are using the
method that gives you the greater benefit.
Page 92 Chapter 10 Standard Deduction
When to itemize. You may benefit from
itemizing your deductions on Schedule A (Form
1040) if you:
• Don't qualify for the standard deduction,
• Had large uninsured medical and dental
expenses during the year,
• Paid interest and taxes on your home,
• Had large uninsured casualty or theft los-
ses,
• Made large contributions to qualified chari-
ties, or
• Have total itemized deductions that are
more than the standard deduction to which
you are otherwise entitled.
These deductions are explained in chapter 11
and in the publications listed under Useful
Items, earlier.
If you decide to itemize your deductions,
complete Schedule A and attach it to your Form
1040 or 1040-SR. Enter the amount from
Schedule A, line 17, on Form 1040 or Form
1040-SR, line 12a.
Electing to itemize for state tax or other
purposes. Even if your itemized deductions
are less than your standard deduction, you can
elect to itemize deductions on your federal re-
turn rather than take the standard deduction.
You may want to do this if, for example, the tax
benefit of itemizing your deductions on your
state tax return is greater than the tax benefit
you lose on your federal return by not taking the
standard deduction. To make this election, you
must check the box on line 18 of Schedule A.
Changing your mind. If you don't itemize your
deductions and later find that you should have
itemized—or if you itemize your deductions and
later find you shouldn't have—you can change
your return by filing Form 1040-X, Amended
U.S. Individual Income Tax Return. See Amen-
ded Returns and Claims for Refund in chapter 1
for more information on amended returns.
Married persons who filed separate re-
turns. You can change methods of taking de-
ductions only if you and your spouse both make
the same changes. Both of you must file a con-
sent to assessment for any additional tax either
one may owe as a result of the change.
You and your spouse can use the method
that gives you the lower total tax, even though
one of you may pay more tax than you would
have paid by using the other method. You both
must use the same method of claiming deduc-
tions. If one itemizes deductions, the other
should itemize because they won't qualify for
the standard deduction. See Persons not eligi-
ble for the standard deduction, earlier.
Chapter 10 Standard Deduction Page 93
2021 Standard Deduction TablesCAUTION
!
If you are married filing a separate return and your spouse itemizes deductions, or if you are a dual-status alien, you can't take the standard deduction
even if you were born before January 2, 1957, or are blind.
Standard Deduction Chart for Most People*Table 10-1.
IF your filing status is... THEN your standard deduction is...
Single or Married filing separately $12,550
Married filing jointly or Qualifying widow(er) 25,100
Head of household 18,800
* Don't use this chart if you were born before January 2, 1957, are blind, or if someone else can claim you (or your spouse, if filing jointly) as a dependent. Use Table 10-2 or
10-3 instead.
Standard Deduction Chart for People Born Before January 2, 1957, or Who Are Blind*Table 10-2.
Check the correct number of boxes below. Then go to the chart.
You: Born before January 2, 1957 Blind
Your spouse: Born before January 2, 1957 Blind
Total number of boxes checked
IF
your filing status is...
AND
the number in the box above is...
THEN
your standard deduction is...
Single 1 $14,250
2 15,950
Married filing jointly 1 $26,450
2 27,800
3 29,150
4 30,500
Qualifying widow(er) 1 $26,450
2 27,800
Married filing 1 $13,900
separately** 2 15,250
3 16,600
4 17,950
Head of household 1 $20,500
2 22,200
* If someone else can claim you (or your spouse, if filing jointly) as a dependent, use Table 10-3 instead.
** You can check the boxes for Your Spouse if your filing status is married filing separately and your spouse had no income, isn’t filing a return, and can’t be claimed as a
dependent on another person’s return.
Standard Deduction Worksheet for Dependents
Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent.
Table 10-3.
Check the correct number of boxes below. Then go to the worksheet.
You: Born before January 2, 1957 Blind
Your spouse: Born before January 2, 1957 Blind
Total number of boxes checked
1. Enter your earned income (defined below). If none, enter -0-. 1.
2. Additional amount. 2. $350
3. Add lines 1 and 2. 3.
4. Minimum standard deduction. 4. $1,100
5. Enter the larger of line 3 or line 4. 5.
6. Enter the amount shown below for your filing status.
• Single or Married filing separately—$12,550
• Married filing jointly—$25,100
• Head of household—$18,800
6.
7. Standard deduction.
a. Enter the smaller of line 5 or line 6. If born after January 1, 1957, and not blind, stop here. This is your
standard deduction. Otherwise, go on to line 7b. 7a.
b. If born before January 2, 1957, or blind, multiply $1,700 ($1,350 if married) by the number in the box above. 7b.
c. Add lines 7a and 7b. This is your standard deduction for 2021. 7c.
Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any
taxable scholarship or fellowship grant.
Page 94 Chapter 10 Standard Deduction
11.
Taxes
Reminders
Limitation on deduction for state and local
taxes. The Tax Cuts and Jobs Act provided
for a temporary limitation on the deduction for
state and local taxes. See Limitation on deduc-
tion for state and local taxes, later.
No deduction for foreign taxes paid for real
estate. You can no longer deduct foreign
taxes you paid on real estate.
Introduction
This chapter discusses which taxes you can de-
duct if you itemize deductions on Schedule A
(Form 1040). It also explains which taxes you
can deduct on other schedules or forms and
which taxes you can’t deduct.
This chapter covers the following topics.
• Income taxes (federal, state, local, and for-
eign).
• General sales taxes (state and local).
• Real estate taxes (state, local, and for-
eign).
• Personal property taxes (state and local).
• Taxes and fees you can’t deduct.
Use Table 11-1 as a guide to determine
which taxes you can deduct.
The end of the chapter contains a section
that explains which forms you use to deduct dif-
ferent types of taxes.
Business taxes. You can deduct certain taxes
only if they are ordinary and necessary expen-
ses of your trade or business or of producing in-
come. For information on these taxes, see Pub.
535, Business Expenses.
State or local taxes. These are taxes im-
posed by the 50 states, U.S. possessions, or
any of their political subdivisions (such as a
county or city), or by the District of Columbia.
Indian tribal government. An Indian tribal
government recognized by the Secretary of the
Treasury as performing substantial government
functions will be treated as a state for purposes
of claiming a deduction for taxes. Income taxes,
real estate taxes, and personal property taxes
imposed by that Indian tribal government (or by
any of its subdivisions that are treated as politi-
cal subdivisions of a state) are deductible.
General sales taxes. These are taxes im-
posed at one rate on retail sales of a broad
range of classes of items.
Foreign taxes. These are taxes imposed by a
foreign country or any of its political subdivi-
sions.
Useful Items
You may want to see:
Publication
502 Medical and Dental Expenses
503 Child and Dependent Care Expenses
504 Divorced or Separated Individuals
514 Foreign Tax Credit for Individuals
525 Taxable and Nontaxable Income
530 Tax Information for Homeowners
Form (and Instructions)
Schedule A (Form 1040) Itemized
Deductions
Schedule E (Form 1040) Supplemental
Income and Loss
1116 Foreign Tax Credit
For these and other useful items, go to IRS.gov/
Forms.
Tests To Deduct
Any Tax
The following two tests must be met for you to
deduct any tax.
• The tax must be imposed on you.
• You must pay the tax during your tax year.
The tax must be imposed on you. In gen-
eral, you can deduct only taxes imposed on
you.
Generally, you can deduct property taxes
only if you are an owner of the property. If your
spouse owns the property and pays the real es-
tate taxes, the taxes are deductible on your
spouse's separate return or on your joint return.
You must pay the tax during your tax year.
If you are a cash basis taxpayer, you can de-
duct only those taxes you actually paid during
your tax year. If you pay your taxes by check
and the check is honored by your financial insti-
tution, the day you mail or deliver the check is
the date of payment. If you use a pay-by-phone
account (such as a credit card or electronic
funds withdrawal), the date reported on the
statement of the financial institution showing
when payment was made is the date of pay-
ment. If you contest a tax liability and are a cash
basis taxpayer, you can deduct the tax only in
the year you actually pay it (or transfer money
or other property to provide for satisfaction of
the contested liability). See Pub. 538, Account-
ing Periods and Methods, for details.
If you use an accrual method of accounting,
see Pub. 538 for more information.
Income Taxes
This section discusses the deductibility of state
and local income taxes (including employee
contributions to state benefit funds) and foreign
income taxes.
State and Local Income
Taxes
You can deduct state and local income taxes.
Schedule A (Form 1040)
Schedule E (Form 1040)
1116
Exception. You can’t deduct state and local in-
come taxes you pay on income that is exempt
from federal income tax, unless the exempt in-
come is interest income. For example, you can’t
deduct the part of a state's income tax that is on
a cost-of-living allowance exempt from federal
income tax.
What To Deduct
Your deduction may be for withheld taxes, esti-
mated tax payments, or other tax payments as
follows.
Withheld taxes. You can deduct state and lo-
cal income taxes withheld from your salary in
the year they are withheld. Your Form(s) W-2
will show these amounts. Forms W-2G, 1099-B,
1099-DIV, 1099-G, 1099-K, 1099-MISC,
1099-NEC, 1099-OID, and 1099-R may also
show state and local income taxes withheld.
Estimated tax payments. You can deduct es-
timated tax payments you made during the year
to a state or local government. However, you
must have a reasonable basis for making the
estimated tax payments. Any estimated state or
local tax payments that aren’t made in good
faith at the time of payment aren’t deductible.
Example. You made an estimated state in-
come tax payment. However, the estimate of
your state tax liability shows that you will get a
refund of the full amount of your estimated pay-
ment. You had no reasonable basis to believe
you had any additional liability for state income
taxes and you can’t deduct the estimated tax
payment.
Refund applied to taxes. You can deduct any
part of a refund of prior-year state or local in-
come taxes that you chose to have credited to
your 2021 estimated state or local income
taxes.
Don’t reduce your deduction by either of the
following items.
• Any state or local income tax refund (or
credit) you expect to receive for 2021.
• Any refund of (or credit for) prior-year state
and local income taxes you actually re-
ceived in 2021.
However, part or all of this refund (or credit)
may be taxable. See Refund (or credit) of state
or local income taxes, later.
Separate federal returns. If you and your
spouse file separate state, local, and federal in-
come tax returns, each of you can deduct on
your federal return only the amount of your own
state and local income tax that you paid during
the tax year.
Joint state and local returns. If you and
your spouse file joint state and local returns and
separate federal returns, each of you can de-
duct on your separate federal return a part of
the state and local income taxes paid during the
tax year. You can deduct only the amount of the
total taxes that is proportionate to your gross in-
come compared to the combined gross income
of you and your spouse. However, you can’t de-
duct more than the amount you actually paid
during the year. You can avoid this calculation if
you and your spouse are jointly and individually
liable for the full amount of the state and local
Chapter 11 Taxes Page 95
income taxes. If so, you and your spouse can
deduct on your separate federal returns the
amount you each actually paid.
Joint federal return. If you file a joint federal
return, you can deduct the state and local in-
come taxes both of you paid.
Contributions to state benefit funds. As an
employee, you can deduct mandatory contribu-
tions to state benefit funds withheld from your
wages that provide protection against loss of
wages. For example, certain states require em-
ployees to make contributions to state funds
providing disability or unemployment insurance
benefits. Mandatory payments made to the fol-
lowing state benefit funds are deductible as
state income taxes on Schedule A (Form 1040),
line 5a.
• Alaska Unemployment Compensation
Fund.
• California Nonoccupational Disability Ben-
efit Fund.
• New Jersey Nonoccupational Disability
Benefit Fund.
• New Jersey Unemployment Compensation
Fund.
• New York Nonoccupational Disability Ben-
efit Fund.
• Pennsylvania Unemployment Compensa-
tion Fund.
• Rhode Island Temporary Disability Benefit
Fund.
• Washington State Supplemental Work-
men's Compensation Fund.
Employee contributions to private or
voluntary disability plans aren’t deduc-
tible.
Refund (or credit) of state or local income
taxes. If you receive a refund of (or credit for)
state or local income taxes in a year after the
year in which you paid them, you may have to
include the refund in income on Schedule 1
(Form 1040), line 1, in the year you receive it.
This includes refunds resulting from taxes that
were overwithheld, applied from a prior-year re-
turn, not figured correctly, or figured again be-
cause of an amended return. If you didn’t item-
ize your deductions in the previous year, don’t
include the refund in income. If you deducted
the taxes in the previous year, include all or part
of the refund on Schedule 1 (Form 1040), line 1,
in the year you receive the refund. For a discus-
sion of how much to include, see Recoveries in
Pub. 525, Taxable and Nontaxable Income, for
more information.
Foreign Income Taxes
Generally, you can take either a deduction or a
credit for income taxes imposed on you by a
foreign country or a U.S. possession. However,
you can’t take a deduction or credit for foreign
income taxes paid on income that is exempt
from U.S. tax under the foreign earned income
exclusion or the foreign housing exclusion. For
information on these exclusions, see Pub. 54,
Tax Guide for U.S. Citizens and Resident Aliens
Abroad. For information on the foreign tax
credit, see Pub. 514.CAUTION
!
State and Local
General Sales Taxes
You can elect to deduct state and local general
sales taxes, instead of state and local income
taxes, as an itemized deduction on Schedule A
(Form 1040), line 5a. You can use either your
actual expenses or the state and local sales tax
tables to figure your sales tax deduction.
Actual expenses. Generally, you can deduct
the actual state and local general sales taxes
(including compensating use taxes) if the tax
rate was the same as the general sales tax rate.
Food, clothing, and medical supplies.
Sales taxes on food, clothing, and medical sup-
plies are deductible as a general sales tax even
if the tax rate was less than the general sales
tax rate.
Motor vehicles. Sales taxes on motor vehi-
cles are deductible as a general sales tax even
if the tax rate was less than the general sales
tax rate. However, if you paid sales tax on a
motor vehicle at a rate higher than the general
sales tax, you can deduct only the amount of
the tax that you would have paid at the general
sales tax rate on that vehicle. Include any state
and local general sales taxes paid for a leased
motor vehicle. For purposes of this section, mo-
tor vehicles include cars, motorcycles, motor
homes, recreational vehicles, sport utility vehi-
cles, trucks, vans, and off-road vehicles.
If you use the actual expenses method,
you must have receipts to show the
general sales taxes paid.
Trade or business items. Don't include
sales taxes paid on items used in your trade or
business on Schedule A (Form 1040). Instead,
go to the instructions for the form you are using
to report business income and expenses to see
if you can deduct these taxes.
Optional sales tax tables. Instead of using
your actual expenses, you can figure your state
and local general sales tax deduction using the
state and local sales tax tables in the Instruc-
tions for Schedule A (Form 1040). You may
also be able to add the state and local general
sales taxes paid on certain specified items.
Your applicable table amount is based on
the state where you live, your income, and your
family size. Your income is your adjusted gross
income plus any nontaxable items such as the
following.
• Tax-exempt interest.
• Veterans’ benefits.
• Nontaxable combat pay.
• Workers’ compensation.
• Nontaxable part of social security and rail-
road retirement benefits.
• Nontaxable part of IRA, pension, or annuity
distributions, excluding rollovers.
• Public assistance payments.
If you lived in different states during the
same tax year, you must prorate your applica-
ble table amount for each state based on the
days you lived in each state. See theCAUTION
!
instructions for Schedule A (Form 1040),
line 5a, for details.
State and Local Real
Estate Taxes
Deductible real estate taxes are any state and
local taxes on real property levied for the gen-
eral public welfare. You can deduct these taxes
only if they are assessed uniformly against all
property under the jurisdiction of the taxing au-
thority. The proceeds must be for general com-
munity or governmental purposes and not be a
payment for a special privilege granted or serv-
ice rendered to you.
Deductible real estate taxes generally don’t
include taxes charged for local benefits and im-
provements that increase the value of the prop-
erty. They also don’t include itemized charges
for services (such as trash collection) assessed
against specific property or certain people,
even if the charge is paid to the taxing authority.
For more information about taxes and charges
that aren’t deductible, see Real Estate-Related
Items You Can’t Deduct, later.
Tenant-shareholders in a cooperative hous-
ing corporation. Generally, if you are a ten-
ant-stockholder in a cooperative housing corpo-
ration, you can deduct the amount paid to the
corporation that represents your share of the
real estate taxes the corporation paid or incur-
red for your dwelling unit. The corporation
should provide you with a statement showing
your share of the taxes. For more information,
see Special Rules for Cooperatives in Pub. 530.
Division of real estate taxes between buy-
ers and sellers. If you bought or sold real es-
tate during the year, the real estate taxes must
be divided between the buyer and the seller.
The buyer and the seller must divide the real
estate taxes according to the number of days in
the real property tax year (the period to which
the tax is imposed relates) that each owned the
property. The seller is treated as paying the
taxes up to, but not including, the date of sale.
The buyer is treated as paying the taxes begin-
ning with the date of sale. This applies regard-
less of the lien dates under local law. Generally,
this information is included on the settlement
statement provided at the closing.
If you (the seller) can’t deduct taxes until
they are paid because you use the cash method
of accounting, and the buyer of your property is
personally liable for the tax, you are considered
to have paid your part of the tax at the time of
the sale. This lets you deduct the part of the tax
to the date of sale even though you didn’t ac-
tually pay it. However, you must also include
the amount of that tax in the selling price of the
property. The buyer must include the same
amount in his or her cost of the property.
You figure your deduction for taxes on each
property bought or sold during the real property
tax year as follows.
Page 96 Chapter 11 Taxes
Worksheet 11-1. Figuring
Your State and Local Real
Estate Tax Deduction
Keep for Your Records
1. Enter the total state and local real estate
taxes for the real property tax
year . . . . . . . . . . . . . . . . . . . .
2. Enter the number of days in the real
property tax year that you owned the
property . . . . . . . . . . . . . . . . .
3. Divide line 2 by 365 (for leap years,
divide line 2 by 366) . . . . . . . . . . . .
4. Multiply line 1 by line 3. This is your
deduction. Enter it on Schedule A (Form
1040), line 5b . . . . . . . . . . . . . .
Note. Repeat steps 1 through 4 for each property you bought
or sold during the real property tax year. Your total deduction is
the sum of the line 4 amounts for all of the properties.
Real estate taxes for prior years. Don’t di-
vide delinquent taxes between the buyer and
seller if the taxes are for any real property tax
year before the one in which the property is
sold. Even if the buyer agrees to pay the delin-
quent taxes, the buyer can’t deduct them. The
buyer must add them to the cost of the property.
The seller can deduct these taxes paid by the
buyer. However, the seller must include them in
the selling price.
Examples. The following examples illustrate
how real estate taxes are divided between
buyer and seller.
Example 1. Dennis and Beth White's real
property tax year for both their old home and
their new home is the calendar year, with pay-
ment due August 1. The tax on their old home,
sold on May 7, was $620. The tax on their new
home, bought on May 3, was $732. Dennis and
Beth are considered to have paid a proportion-
ate share of the real estate taxes on the old
home even though they didn’t actually pay them
to the taxing authority. On the other hand, they
can claim only a proportionate share of the
taxes they paid on their new property even
though they paid the entire amount.
Dennis and Beth owned their old home dur-
ing the real property tax year for 126 days (Jan-
uary 1 to May 6, the day before the sale). They
figure their deduction for taxes on their old
home as follows.
Worksheet 11-1. Figuring Your
State and Local Real Estate Tax
Deduction — Taxes on Old Home
1. Enter the total state and local real estate
taxes for the real property tax year . . . $620
2. Enter the number of days in the real
property tax year that you owned the
property . . . . . . . . . . . . . . . . 126
3. Divide line 2 by 365 (for leap years,
divide line 2 by 366) . . . . . . . . . . 0.3452
4. Multiply line 1 by line 3. This is your
deduction. Enter it on Schedule A (Form
1040), line 5b . . . . . . . . . . . . . $214
Since the buyers of their old home paid all of
the taxes, Dennis and Beth also include the
$214 in the selling price of the old home. (The
buyers add the $214 to their cost of the home.)
Dennis and Beth owned their new home
during the real property tax year for 243 days
(May 3 to December 31, including their date of
purchase). They figure their deduction for taxes
on their new home as follows.
Worksheet 11-1. Figuring Your
State and Local Real Estate Tax
Deduction — Taxes on New Home
1. Enter the total state and local real estate
taxes for the real property tax year . . . $732
2. Enter the number of days in the real
property tax year that you owned the
property . . . . . . . . . . . . . . . . 243
3. Divide line 2 by 365 (for leap years,
divide line 2 by 366) . . . . . . . . . . 0.6658
4. Multiply line 1 by line 3. This is your
deduction. Enter it on Schedule A (Form
1040), line 5b . . . . . . . . . . . . . $487
Since Dennis and Beth paid all of the taxes on
the new home, they add $245 ($732 paid less
$487 deduction) to their cost of the new home.
(The sellers add this $245 to their selling price
and deduct the $245 as a real estate tax.)
Dennis and Beth's real estate tax deduction
for their old and new homes is the sum of $214
and $487, or $701. They will enter this amount
on Schedule A (Form 1040), line 5b.
Example 2. George and Helen Brown
bought a new home on May 3, 2021. Their real
property tax year for the new home is the calen-
dar year. Real estate taxes for 2020 were as-
sessed in their state on January 1, 2021. The
taxes became due on May 31, 2021, and Octo-
ber 31, 2021.
The Browns agreed to pay all taxes due af-
ter the date of purchase. Real estate taxes for
2020 were $680. They paid $340 on May 31,
2021, and $340 on October 31, 2021. These
taxes were for the 2020 real property tax year.
The Browns can’t deduct them since they didn’t
own the property until 2021. Instead, they must
add $680 to the cost of their new home.
In January 2022, the Browns receive their
2021 property tax statement for $752, which
they will pay in 2022. The Browns owned their
new home during the 2021 real property tax
year for 243 days (May 3 to December 31).
They will figure their 2022 deduction for taxes
as follows.
Worksheet 11-1. Figuring Your
State and Local Real Estate Tax
Deduction — Taxes on New Home
1. Enter the total state and local real estate
taxes for the real property tax year . . . $752
2. Enter the number of days in the real
property tax year that you owned the
property . . . . . . . . . . . . . . . . 243
3. Divide line 2 by 365 (for leap years,
divide line 2 by 366) . . . . . . . . . . 0.6658
4. Multiply line 1 by line 3. This is your
deduction. Claim it on Schedule A
(Form 1040), line 5b . . . . . . . . . . $501
The remaining $251 ($752 paid less $501 de-
duction) of taxes paid in 2022, along with the
$680 paid in 2021, is added to the cost of their
new home.
Because the taxes up to the date of sale are
considered paid by the seller on the date of
sale, the seller is entitled to a 2021 tax deduc-
tion of $931. This is the sum of the $680 for
2020 and the $251 for the 122 days the seller
owned the home in 2021. The seller must also
include the $931 in the selling price when he or
she figures the gain or loss on the sale. The
seller should contact the Browns in January
2022 to find out how much real estate tax is due
for 2021.
Form 1099-S. For certain sales or ex-
changes of real estate, the person responsible
for closing the sale (generally, the settlement
agent) prepares Form 1099-S, Proceeds From
Real Estate Transactions, to report certain infor-
mation to the IRS and to the seller of the prop-
erty. Box 2 of Form 1099-S is for the gross pro-
ceeds from the sale and should include the
portion of the seller's real estate tax liability that
the buyer will pay after the date of sale. The
buyer includes these taxes in the cost basis of
the property, and the seller both deducts this
amount as a tax paid and includes it in the sales
price of the property.
For a real estate transaction that involves a
home, any real estate tax the seller paid in ad-
vance but that is the liability of the buyer ap-
pears on Form 1099-S, box 6. The buyer de-
ducts this amount as a real estate tax, and the
seller reduces his or her real estate tax deduc-
tion (or includes it in income) by the same
amount. See Refund (or rebate), later.
Taxes placed in escrow. If your monthly
mortgage payment includes an amount placed
in escrow (put in the care of a third party) for
real estate taxes, you may not be able to deduct
the total amount placed in escrow. You can de-
duct only the real estate tax that the third party
actually paid to the taxing authority. If the third
party doesn’t notify you of the amount of real
estate tax that was paid for you, contact the
third party or the taxing authority to find the
proper amount to show on your return.
Tenants by the entirety. If you and your
spouse held property as tenants by the entirety
and you file separate federal returns, each of
you can deduct only the taxes each of you paid
on the property.
Divorced individuals. If your divorce or sepa-
ration agreement states that you must pay the
real estate taxes for a home owned by you and
your spouse, part of your payments may be de-
ductible as alimony and part as real estate
taxes. See Payments to a third party in Pub.
504, Divorced or Separated Individuals, for
more information.
Ministers’ and military housing allowances.
If you are a minister or a member of the uni-
formed services and receive a housing allow-
ance that you can exclude from income, you still
can deduct all of the real estate taxes you pay
on your home.
Refund (or rebate). If you received a refund
or rebate in 2021 of real estate taxes you paid
in 2021, you must reduce your deduction by the
amount refunded to you. If you received a re-
fund or rebate in 2021 of real estate taxes you
deducted in an earlier year, you generally must
include the refund or rebate in income in the
year you receive it. However, the amount you
include in income is limited to the amount of the
deduction that reduced your tax in the earlier
Chapter 11 Taxes Page 97
year. For more information, see Recoveries in
Pub. 525.
Real Estate-Related Items
You Can’t Deduct
Payments for the following items generally
aren’t deductible as real estate taxes.
• Taxes for local benefits.
• Itemized charges for services (such as
trash and garbage pickup fees).
• Transfer taxes (or stamp taxes).
• Rent increases due to higher real estate
taxes.
• Homeowners' association charges.
Taxes for local benefits. Deductible real es-
tate taxes generally don’t include taxes charged
for local benefits and improvements tending to
increase the value of your property. These in-
clude assessments for streets, sidewalks, water
mains, sewer lines, public parking facilities, and
similar improvements. You should increase the
basis of your property by the amount of the as-
sessment.
Local benefit taxes are deductible only if
they are for maintenance, repair, or interest
charges related to those benefits. If only a part
of the taxes is for maintenance, repair, or inter-
est, you must be able to show the amount of
that part to claim the deduction. If you can’t de-
termine what part of the tax is for maintenance,
repair, or interest, none of it is deductible.
Taxes for local benefits may be inclu-
ded in your real estate tax bill. If your
taxing authority (or mortgage lender)
doesn’t furnish you a copy of your real estate
tax bill, ask for it. You should use the rules
above to determine if the local benefit tax is de-
ductible. Contact the taxing authority if you
need additional information about a specific
charge on your real estate tax bill.
Itemized charges for services. An itemized
charge for services assessed against specific
property or certain people isn’t a tax, even if the
charge is paid to the taxing authority. For exam-
ple, you can’t deduct the charge as a real estate
tax if it is:
• A unit fee for the delivery of a service (such
as a $5 fee charged for every 1,000 gal-
lons of water you use),CAUTION
!
• A periodic charge for a residential service
(such as a $20 per month or $240 annual
fee charged to each homeowner for trash
collection), or
• A flat fee charged for a single service pro-
vided by your government (such as a $30
charge for mowing your lawn because it
was allowed to grow higher than permitted
under your local ordinance).
You must look at your real estate tax
bill to determine if any nondeductible
itemized charges, such as those listed
above, are included in the bill. If your taxing au-
thority (or mortgage lender) doesn’t furnish you
a copy of your real estate tax bill, ask for it.
Exception. Service charges used to main-
tain or improve services (such as trash collec-
tion or police and fire protection) are deductible
as real estate taxes if:
• The fees or charges are imposed at a like
rate against all property in the taxing juris-
diction;
• The funds collected aren’t earmarked; in-
stead, they are commingled with general
revenue funds; andCAUTION
!
Table 11-1. Which Taxes Can You Deduct?
Type of Tax You Can Deduct You Can’t Deduct
Fees and Charges Fees and charges that are expenses of your trade or
business or of producing income.
Fees and charges that aren’t expenses of your trade or
business or of producing income, such as fees for
driver's licenses, car inspections, parking, or
charges for water bills (see Taxes and Fees You
Can’t Deduct).
Fines and penalties.
Income Taxes State and local income taxes. Federal income taxes.
Foreign income taxes. Employee contributions to private or voluntary
disability plans.
Employee contributions to state funds listed under
Contributions to state benefit funds.
State and local general sales taxes if you choose to
deduct state and local income taxes.
General Sales Taxes State and local general sales taxes, including
compensating use taxes.
State and local income taxes if you choose to deduct
state and local general sales taxes.
Other Taxes Taxes that are expenses of your trade or business. Federal excise taxes, such as tax on gasoline, that
aren’t expenses of your trade or business or of
producing income.
Taxes on property producing rent or royalty income. Per capita taxes.
One-half of self-employment tax paid.
Personal Property
Taxes
State and local personal property taxes. Customs duties that aren’t expenses of your trade or
business or of producing income.
Real Estate Taxes State and local real estate taxes. Real estate taxes that are treated as imposed on
someone else (see Division of real estate taxes
between buyers and sellers).
Tenant's share of real estate taxes paid by
cooperative housing corporation.
Foreign real estate taxes.
Taxes for local benefits (with exceptions). See Real
Estate-Related Items You Can’t Deduct.
Trash and garbage pickup fees (with exceptions). See
Real Estate-Related Items You Can’t Deduct.
Rent increase due to higher real estate taxes.
Homeowners' association charges.
Page 98 Chapter 11 Taxes
• Funds used to maintain or improve serv-
ices aren’t limited to or determined by the
amount of these fees or charges collected.
Transfer taxes (or stamp taxes). Transfer
taxes and similar taxes and charges on the sale
of a personal home aren’t deductible. If they are
paid by the seller, they are expenses of the sale
and reduce the amount realized on the sale. If
paid by the buyer, they are included in the cost
basis of the property.
Rent increase due to higher real estate
taxes. If your landlord increases your rent in
the form of a tax surcharge because of in-
creased real estate taxes, you can’t deduct the
increase as taxes.
Homeowners' association charges. These
charges aren’t deductible because they are im-
posed by the homeowners' association, rather
than the state or local government.
Personal Property
Taxes
Personal property tax is deductible if it is a state
or local tax that is:
• Charged on personal property;
• Based only on the value of the personal
property; and
• Charged on a yearly basis, even if it is col-
lected more or less than once a year.
A tax that meets the above requirements
can be considered charged on personal prop-
erty even if it is for the exercise of a privilege.
For example, a yearly tax based on value quali-
fies as a personal property tax even if it is called
a registration fee and is for the privilege of reg-
istering motor vehicles or using them on the
highways.
If the tax is partly based on value and partly
based on other criteria, it may qualify in part.
Example. Your state charges a yearly mo-
tor vehicle registration tax of 1% of value plus
50 cents per hundredweight. You paid $32
based on the value ($1,500) and weight (3,400
lbs.) of your car. You can deduct $15 (1% ×
$1,500) as a personal property tax because it is
based on the value. The remaining $17 ($0.50 ×
34), based on the weight, isn’t deductible.
Taxes and Fees
You Can’t Deduct
Many federal, state, and local government
taxes aren’t deductible because they don’t fall
within the categories discussed earlier. Other
taxes and fees, such as federal income taxes,
aren’t deductible because the tax law specifi-
cally prohibits a deduction for them. See Ta-
ble 11-1.
Taxes and fees that are generally not de-
ductible include the following items.
• Employment taxes. This includes social
security, Medicare, and railroad retirement
taxes withheld from your pay. However,
one-half of self-employment tax you pay is
deductible. In addition, the social security
and other employment taxes you pay on
the wages of a household worker may be
included in medical expenses that you can
deduct, or childcare expenses that allow
you to claim the child and dependent care
credit. For more information, see Pub. 502,
Medical and Dental Expenses, and Pub.
503, Child and Dependent Care Expenses.
• Estate, inheritance, legacy, or succes-
sion taxes. You can deduct the estate tax
attributable to income in respect of a dece-
dent if you, as a beneficiary, must include
that income in your gross income. In that
case, deduct the estate tax on Schedule A
(Form 1040), line 16. For more information,
see Pub. 559, Survivors, Executors, and
Administrators.
• Federal income taxes. This includes in-
come taxes withheld from your pay.
• Fines and penalties. You can’t deduct
fines and penalties paid to a government
for violation of any law, including related
amounts forfeited as collateral deposits.
• Foreign personal or real property
taxes.
• Gift taxes.
• License fees. You can’t deduct license
fees for personal purposes (such as mar-
riage, driver's, and pet license fees).
• Per capita taxes. You can’t deduct state
or local per capita taxes.
Many taxes and fees other than those listed
above are also nondeductible, unless they are
ordinary and necessary expenses of a business
or income-producing activity. For other nonde-
ductible items, see Real Estate-Related Items
You Can’t Deduct, earlier.
Where To Deduct
You deduct taxes on the following schedules.
State and local income taxes. These taxes
are deducted on Schedule A (Form 1040),
line 5a, even if your only source of income is
from business, rents, or royalties.
Limitation on deduction for state and lo-
cal taxes. The deduction for state and local
taxes is limited to $10,000 ($5,000 if married fil-
ing married separately). State and local taxes
are the taxes that you include on Schedule A
(Form 1040), lines 5a, 5b, and 5c. Include taxes
imposed by a U.S. possession with your state
and local taxes on Schedule A (Form 1040),
lines 5a, 5b, and 5c. However, don't include any
U.S. possession taxes you paid that are alloca-
ble to excluded income.
You may want to take a credit for U.S.
possession tax instead of a deduction.
See the instructions for Schedule 3
(Form 1040), line 1, for details.
General sales taxes. Sales taxes are deduc-
ted on Schedule A (Form 1040), line 5a. You
must check the box on line 5a. If you elect to
deduct sales taxes, you can’t deduct state and
local income taxes on Schedule A (Form 1040),
line 5a.TIP
Foreign income taxes. Generally, income
taxes you pay to a foreign country or U.S. pos-
session can be claimed as an itemized deduc-
tion on Schedule A (Form 1040), line 6, or as a
credit against your U.S. income tax on Sched-
ule 3 (Form 1040), line 1. To claim the credit,
you may have to complete and attach Form
1116. For more information, see the Instructions
for Form 1040 or Pub. 514.
Real estate taxes and personal property
taxes. Real estate and personal property taxes
are deducted on Schedule A (Form 1040), lines
5b and 5c, respectively, unless they are paid on
property used in your business, in which case
they are deducted on Schedule C (Form 1040)
or Schedule F (Form 1040). Taxes on property
that produces rent or royalty income are deduc-
ted on Schedule E (Form 1040).
Self-employment tax. Deduct one-half of your
self-employment tax on Schedule 1 (Form
1040), line 15.
Other taxes. All other deductible taxes are de-
ducted on Schedule A (Form 1040), line 6.
12.
Other Itemized
Deductions
What's New
Standard mileage rate. The 2021 rate for
business use of a vehicle is 56 cents a mile.
Reminders
Educator expenses. Educator expenses in-
clude amounts paid or incurred after March 12,
2020, for personal protective equipment, disin-
fectant, and other supplies used for the preven-
tion of the spread of coronavirus. For more in-
formation, see the instructions for Schedule 1
(Form 1040), line 11, and Educator Expenses in
Pub. 529, Miscellaneous Deductions.
No miscellaneous itemized deductions al-
lowed. You can no longer claim any miscella-
neous itemized deductions. Miscellaneous
itemized deductions are those deductions that
would have been subject to the 2%-of-adjus-
ted-gross-income (AGI) limitation. See Miscel-
laneous Itemized Deductions, later.
Fines and penalties. Rules regarding deduct-
ing fines and penalties have changed. See
Fines and Penalties, later.
Introduction
This chapter explains that you can no longer
claim any miscellaneous itemized deductions,
Chapter 12 Other Itemized Deductions Page 99
unless you fall into one of the qualified catego-
ries of employment claiming a deduction relat-
ing to unreimbursed employee expenses. Mis-
cellaneous itemized deductions are those
deductions that would have been subject to the
2%-of-AGI limitation. You can still claim certain
expenses as itemized deductions on Sched-
ule A (Form 1040), Schedule A (Form
1040-NR), or as an adjustment to income on
Form 1040 or 1040-SR. This chapter covers the
following topics.
• Miscellaneous itemized deductions.
• Expenses you can't deduct.
• Expenses you can deduct.
• How to report your deductions.
You must keep records to verify your
deductions. You should keep receipts,
canceled checks, substitute checks, fi-
nancial account statements, and other docu-
mentary evidence. For more information on re-
cordkeeping, see What Records Should I
Keep? in chapter 1.
Useful Items
You may want to see:
Publication
463 Travel, Gift, and Car Expenses
525 Taxable and Nontaxable Income
529 Miscellaneous Deductions
535 Business Expenses
547 Casualties, Disasters, and Thefts
575 Pension and Annuity Income
587 Business Use of Your Home
946 How To Depreciate Property
Form (and Instructions)
Schedule A (Form 1040) Itemized
Deductions
2106 Employee Business Expenses
8839 Qualified Adoption Expenses
Schedule K-1 (Form 1041) Beneficiary's
Share of Income, Deductions,
Credits, etc.
For these and other useful items, go to IRS.gov/
Forms.
Miscellaneous
Itemized Deductions
You can no longer claim any miscellaneous
itemized deductions that are subject to the
2%-of-AGI limitation, including unreimbursed
employee expenses. However, you may be
able to deduct certain unreimbursed employee
business expenses if you fall into one of the fol-
lowing categories of employment listed under
Unreimbursed Employee Expenses next.RECORDS
Schedule A (Form 1040)
2106
8839
Schedule K-1 (Form 1041)
Unreimbursed Employee
Expenses
You can no longer claim a deduction for unreim-
bursed employee expenses unless you fall into
one of the following categories of employment.
• Armed Forces reservists.
• Qualified performing artists.
• Fee-basis state or local government offi-
cials.
• Employees with impairment-related work
expenses.
Categories of Employment
You can deduct unreimbursed employee ex-
penses only if you qualify as an Armed Forces
reservist, a qualified performing artist, a fee-ba-
sis state or local government official, or an em-
ployee with impairment-related work expenses.
Armed Forces reservist (member of a re-
serve component). You are a member of a
reserve component of the Armed Forces of the
United States if you are in the Army, Navy, Ma-
rine Corps, Air Force, or Coast Guard Reserve;
the Army National Guard of the United States;
or the Reserve Corps of the Public Health Serv-
ice.
Qualified performing artist. You are a
qualified performing artist if you:
1. Performed services in the performing arts
as an employee for at least two employers
during the tax year,
2. Received from at least two of the employ-
ers wages of $200 or more per employer,
3. Had allowable business expenses attribut-
able to the performing arts of more than
10% of gross income from the performing
arts, and
4. Had AGI of $16,000 or less before deduct-
ing expenses as a performing artist.
Fee-basis state or local government offi-
cial. You are a qualifying fee-basis official if
you are employed by a state or political subdivi-
sion of a state and are compensated, in whole
or in part, on a fee basis.
Employee with impairment-related work
expenses. Impairment-related work expenses
are the allowable expenses of an individual with
physical or mental disabilities for attendant care
at his or her place of employment. They also in-
clude other expenses in connection with the
place of employment that enable the employee
to work. See Pub. 463, Travel, Gift, and Car Ex-
penses, for more details.
Allowable unreimbursed employee expen-
ses. If you qualify as an employee in one of
the categories mentioned above, you may be
able to deduct the following items as unreim-
bursed employee expenses.
Unreimbursed employee expenses for indi-
viduals in these categories of employment are
deducted as adjustments to gross income.
Qualified employees listed in one of the catego-
ries above must complete Form 2106, Em-
ployee Business Expenses, to take the
deduction.
You can deduct only unreimbursed em-
ployee expenses that are paid or incurred dur-
ing your tax year, for carrying on your trade or
business of being an employee, and ordinary
and necessary.
An expense is ordinary if it's common and
accepted in your trade, business, or profession.
An expense is necessary if it's appropriate and
helpful to your business. An expense doesn't
have to be required to be considered neces-
sary.
Educator Expenses
If you were an eligible educator in 2021, you
can deduct up to $250 of qualified expenses
you paid in 2021 as an adjustment to gross in-
come on Schedule 1 (Form 1040), line 11,
rather than as a miscellaneous itemized deduc-
tion. If you and your spouse are filing jointly and
both of you were eligible educators, the maxi-
mum deduction is $500. However, neither
spouse can deduct more than $250 of his or her
qualified expenses. For additional information,
see Educator Expenses in Pub. 529, Miscella-
neous Deductions.
Educator expenses include amounts
paid or incurred after March 12, 2020,
for personal protective equipment, dis-
infectant, and other supplies used for the pre-
vention of the spread of coronavirus. For more
information, see the instructions for Schedule 1
(Form 1040), line 11, and Educator Expenses in
Pub. 529, Miscellaneous Deductions.
Expenses You Can’t
Deduct
Because of the suspension of miscellaneous
itemized deductions, there are two categories
of expenses you can't deduct: miscellaneous
itemized deductions subject to the 2%-of-AGI
limitation, and those expenses that are tradi-
tionally nondeductible under the Internal Reve-
nue Code. Both categories of deduction are dis-
cussed next.
Miscellaneous Deductions Subject
to 2% AGI
Unless you fall into one of the qualified catego-
ries of employment under Unreimbursed Em-
ployee Expenses, earlier, miscellaneous item-
ized deductions that are subject to the
2%-of-AGI limitation can no longer be claimed.
For expenses not related to unreimbursed em-
ployee expenses, you generally can't deduct
the following expenses, even if you fall into one
of the qualified categories of employment listed
earlier.
Appraisal Fees
Appraisal fees you pay to figure a casualty loss
or the fair market value of donated property are
miscellaneous itemized deductions and can no
longer be deducted.TIP
Page 100 Chapter 12 Other Itemized Deductions
Casualty and Theft Losses
Damaged or stolen property used in performing
services as an employee is a miscellaneous de-
duction and can no longer be deducted. For
other casualty and theft losses, see Pub. 547,
Casualties, Disasters, and Thefts.
Clerical Help and Office Rent
Office expenses, such as rent and clerical help,
you pay in connection with your investments
and collecting taxable income on those invest-
ments are miscellaneous itemized deductions
and are no longer deductible.
Credit or Debit Card Convenience
Fees
The convenience fee charged by the card pro-
cessor for paying your income tax (including es-
timated tax payments) by credit or debit card is
a miscellaneous itemized deduction and is no
longer deductible.
Depreciation on Home Computer
If you use your home computer to produce in-
come (for example, to manage your invest-
ments that produce taxable income), the depre-
ciation of the computer for that part of the usage
of the computer is a miscellaneous itemized de-
duction and is no longer deductible.
Fees To Collect Interest and
Dividends
Fees you pay to a broker, bank, trustee, or simi-
lar agent to collect your taxable bond interest or
dividends on shares of stock are miscellaneous
itemized deductions and can no longer be de-
ducted.
Hobby Expenses
A hobby isn't a business because it isn't carried
on to make a profit. Hobby expenses are mis-
cellaneous itemized deductions and can no lon-
ger be deducted. See Not-for-Profit Activities in
chapter 1 of Pub. 535, Business Expenses.
Indirect Deductions of
Pass-Through Entities
Pass-through entities include partnerships, S
corporations, and mutual funds that aren't pub-
licly offered. Deductions of pass-through enti-
ties are passed through to the partners or
shareholders. The partner’s or shareholder’s
share of passed-through deductions for invest-
ment expenses are miscellaneous itemized de-
ductions and can no longer be deducted.
Nonpublicly offered mutual funds. These
funds will send you a Form 1099-DIV, Divi-
dends and Distributions, or a substitute form,
showing your share of gross income and invest-
ment expenses. The investment expenses re-
ported on Form 1099-DIV are a miscellaneous
itemized deduction and are no longer deducti-
ble.
Investment Fees and Expenses
Investment fees, custodial fees, trust adminis-
tration fees, and other expenses you paid for
managing your investments that produce taxa-
ble income are miscellaneous itemized deduc-
tions and are no longer deductible.
Legal Expenses
You can usually deduct legal expenses that you
incur in attempting to produce or collect taxable
income or that you pay in connection with the
determination, collection, or refund of any tax.
Legal expenses that you incur in attempting
to produce or collect taxable income, or that
you pay in connection with the determination,
collection, or refund of any tax are miscellane-
ous itemized deductions and are no longer de-
ductible.
You can deduct expenses of resolving tax
issues relating to profit or loss from business re-
ported on Schedule C (Form 1040), Profit or
Loss From Business (Sole Proprietorship), from
rentals or royalties reported on Schedule E
(Form 1040), Supplemental Income and Loss,
or from farm income and expenses reported on
Schedule F (Form 1040), Profit or Loss From
Farming, on that schedule. Expenses for resolv-
ing nonbusiness tax issues are miscellaneous
itemized deductions and are no longer deducti-
ble.
Loss on Deposits
For information on whether, and if so, how, you
may deduct a loss on your deposit in a qualified
financial institution, see Loss on Deposits in
Pub. 547.
Repayments of Income
Generally, repayments of amounts that you in-
cluded in income in an earlier year is a miscella-
neous itemized deduction and can no longer be
deducted. If you had to repay more than $3,000
that you included in your income in an earlier
year, you may be able to deduct the amount.
See Repayments Under Claim of Right, later.
Repayments of Social Security
Benefits
For information on how to deduct your repay-
ments of certain social security benefits, see
Repayments More Than Gross Benefits in
chapter 7.
Safe Deposit Box Rent
Rent you pay for a safe deposit box you use to
store taxable income-producing stocks, bonds,
or investment-related papers is a miscellaneous
itemized deduction and can no longer be de-
ducted. You also can't deduct the rent if you use
the box for jewelry, other personal items, or
tax-exempt securities.
Service Charges on Dividend
Reinvestment Plans
Service charges you pay as a subscriber in a
dividend reinvestment plan are a miscellaneous
itemized deduction and can no longer be de-
ducted. These service charges include pay-
ments for:
• Holding shares acquired through a plan,
• Collecting and reinvesting cash dividends,
and
• Keeping individual records and providing
detailed statements of accounts.
Tax Preparation Fees
Tax preparation fees on the return for the year
in which you pay them are a miscellaneous
itemized deduction and can no longer be de-
ducted. These fees include the cost of tax prep-
aration software programs and tax publications.
They also include any fee you paid for elec-
tronic filing of your return.
Trustee's Administrative Fees for
IRA
Trustee's administrative fees that are billed sep-
arately and paid by you in connection with your
IRA are a miscellaneous itemized deduction
and can no longer be deducted. For more infor-
mation about IRAs, see chapter 9.
Nondeductible
Expenses
In addition to the miscellaneous itemized de-
ductions discussed earlier, you can't deduct the
following expenses.
List of Nondeductible
Expenses
• Adoption expenses.
• Broker's commissions.
• Burial or funeral expenses, including the
cost of a cemetery lot.
• Campaign expenses.
• Capital expenses.
• Check-writing fees.
• Club dues.
• Commuting expenses.
• Fees and licenses, such as car licenses,
marriage licenses, and dog tags.
• Fines or penalties.
• Health spa expenses.
• Hobby losses, but see Hobby Expenses,
earlier.
• Home repairs, insurance, and rent.
• Home security system.
• Illegal bribes and kickbacks. See Bribes
and kickbacks in chapter 11 of Pub. 535.
• Investment-related seminars.
• Life insurance premiums paid by the in-
sured.
• Lobbying expenses.
• Losses from the sale of your home, furni-
ture, personal car, etc.
Chapter 12 Other Itemized Deductions Page 101
• Lost or misplaced cash or property.
• Lunches with co-workers.
• Meals while working late.
• Medical expenses as business expenses
other than medical examinations required
by your employer.
• Personal disability insurance premiums.
• Personal legal expenses.
• Personal, living, or family expenses.
• Political contributions.
• Professional accreditation fees.
• Professional reputation improvement ex-
pense.
• Relief fund contributions.
• Residential telephone line.
• Stockholders’ meeting attendance expen-
ses.
• Tax-exempt income earning/collecting ex-
penses.
• The value of wages never received or lost
vacation time.
• Travel expenses for another individual.
• Voluntary unemployment benefit fund con-
tributions.
• Wristwatches.
Adoption Expenses
You can't deduct the expenses of adopting a
child, but you may be able to take a credit for
those expenses. See the Instructions for Form
8839, Qualified Adoption Expenses, for more
information.
Campaign Expenses
You can't deduct campaign expenses of a can-
didate for any office, even if the candidate is
running for reelection to the office. These in-
clude qualification and registration fees for pri-
mary elections.
Legal fees. You can't deduct legal fees
paid to defend charges that arise from participa-
tion in a political campaign.
Check-Writing Fees on Personal
Account
If you have a personal checking account, you
can't deduct fees charged by the bank for the
privilege of writing checks, even if the account
pays interest.
Club Dues
Generally, you can't deduct the cost of mem-
bership in any club organized for business,
pleasure, recreation, or other social purpose.
This includes business, social, athletic, lun-
cheon, sporting, airline, hotel, golf, and country
clubs.
You can't deduct dues paid to an organiza-
tion if one of its main purposes is to:
• Conduct entertainment activities for mem-
bers or their guests, or
• Provide members or their guests with ac-
cess to entertainment facilities.
Dues paid to airline, hotel, and luncheon
clubs aren't deductible.
Commuting Expenses
You can't deduct commuting expenses (the
cost of transportation between your home and
your main or regular place of work). If you haul
tools, instruments, or other items in your car to
and from work, you can deduct only the addi-
tional cost of hauling the items such as the rent
on a trailer to carry the items.
Fines and Penalties
Generally, no deduction is allowed for fines and
penalties paid to a government or specified
nongovernmental entity for the violation of any
law except in the following situations.
• Amounts that constitute restitution.
• Amounts paid to come into compliance
with the law.
• Amounts paid or incurred as the result of
certain court orders in which no govern-
ment or specified nongovernmental
agency is a party.
• Amounts paid or incurred for taxes due.
Nondeductible amounts include an amount
paid in settlement of your actual or potential lia-
bility for a fine or penalty (civil or criminal). Fines
or penalties include amounts paid such as park-
ing tickets, tax penalties, and penalties deduc-
ted from teachers' paychecks after an illegal
strike.
No deduction is allowed for the restitution
amount or amount paid to come into compli-
ance with the law unless the amounts are spe-
cifically identified in the settlement agreement
or court order. Also, any amount paid or incur-
red as reimbursement to the government for the
costs of any investigation or litigation are not eli-
gible for the exceptions and are nondeductible.
Health Spa Expenses
You can't deduct health spa expenses, even if
there is a job requirement to stay in excellent
physical condition, such as might be required of
a law enforcement officer.
Home Security System
You can't deduct the cost of a home security
system as a miscellaneous deduction. How-
ever, you may be able to claim a deduction for a
home security system as a business expense if
you have a home office. See Security system
under Figuring the Deduction in Pub. 587.
Investment-Related Seminars
You can't deduct any expenses for attending a
convention, seminar, or similar meeting for in-
vestment purposes.
Life Insurance Premiums
You can't deduct premiums you pay on your life
insurance. You may be able to deduct, as ali-
mony, premiums you pay on life insurance poli-
cies assigned to your former spouse. See Pub.
504, Divorced or Separated Individuals, for in-
formation on alimony.
Lobbying Expenses
You generally can't deduct amounts paid or in-
curred for lobbying expenses. These include
expenses to:
• Influence legislation;
• Participate or intervene in any political
campaign for, or against, any candidate for
public office;
• Attempt to influence the general public, or
segments of the public, about elections,
legislative matters, or referendums; or
• Communicate directly with covered execu-
tive branch officials in any attempt to influ-
ence the official actions or positions of
those officials.
Lobbying expenses also include any amounts
paid or incurred for research, preparation, plan-
ning, or coordination of any of these activities.
Dues used for lobbying. If a tax-exempt
organization notifies you that part of the dues or
other amounts you pay to the organization are
used to pay nondeductible lobbying expenses,
you can't deduct that part. See Lobbying Ex-
penses in Pub. 529 for information on excep-
tions.
Lost or Mislaid Cash or Property
You can't deduct a loss based on the mere dis-
appearance of money or property. However, an
accidental loss or disappearance of property
can qualify as a casualty if it results from an
identifiable event that is sudden, unexpected, or
unusual. See Pub. 547 for more information.
Lunches With Co-Workers
You can't deduct the expenses of lunches with
co-workers, except while traveling away from
home on business. See Pub. 463 for informa-
tion on deductible expenses while traveling
away from home.
Meals While Working Late
You can't deduct the cost of meals while work-
ing late. However, you may be able to claim a
deduction if the cost of meals is a deductible
entertainment expense, or if you're traveling
away from home. See Pub. 463 for information
on deductible entertainment expenses and ex-
penses while traveling away from home.
Personal Legal Expenses
You can't deduct personal legal expenses such
as those for the following.
• Custody of children.
• Breach of promise to marry suit.
Page 102 Chapter 12 Other Itemized Deductions
• Civil or criminal charges resulting from a
personal relationship.
• Damages for personal injury, except for
certain unlawful discrimination and whis-
tle-blower claims.
• Preparation of a title (or defense or perfec-
tion of a title).
• Preparation of a will.
• Property claims or property settlement in a
divorce.
You can't deduct these expenses even if a
result of the legal proceeding is the loss of in-
come-producing property.
Political Contributions
You can't deduct contributions made to a politi-
cal candidate, a campaign committee, or a
newsletter fund. Advertisements in convention
bulletins and admissions to dinners or pro-
grams that benefit a political party or political
candidate aren't deductible.
Professional Accreditation Fees
You can't deduct professional accreditation
fees such as the following.
• Accounting certificate fees paid for the ini-
tial right to practice accounting.
• Bar exam fees and incidental expenses in
securing initial admission to the bar.
• Medical and dental license fees paid to get
initial licensing.
Professional Reputation
You can't deduct expenses of radio and TV ap-
pearances to increase your personal prestige or
establish your professional reputation.
Relief Fund Contributions
You can't deduct contributions paid to a private
plan that pays benefits to any covered em-
ployee who can't work because of any injury or
illness not related to the job.
Residential Telephone Service
You can't deduct any charge (including taxes)
for basic local telephone service for the first tel-
ephone line to your residence, even if it's used
in a trade or business.
Stockholders' Meetings
You can't deduct transportation and other ex-
penses you pay to attend stockholders' meet-
ings of companies in which you own stock but
have no other interest. You can't deduct these
expenses even if you're attending the meeting
to get information that would be useful in mak-
ing further investments.
Tax-Exempt Income Expenses
You can't deduct expenses to produce tax-ex-
empt income. You can't deduct interest on a
debt incurred or continued to buy or carry
tax-exempt securities.
If you have expenses to produce both taxa-
ble and tax-exempt income, but you can't iden-
tify the expenses that produce each type of in-
come, you must divide the expenses based on
the amount of each type of income to determine
the amount that you can deduct.
Travel Expenses for Another
Individual
You generally can't deduct travel expenses you
pay or incur for a spouse, dependent, or other
individual who accompanies you (or your em-
ployee) on business or personal travel unless
the spouse, dependent, or other individual is an
employee of the taxpayer, the travel is for a
bona fide business purpose, and such expen-
ses would otherwise be deductible by the
spouse, dependent, or other individual. See
Pub. 463 for more information on deductible
travel expenses.
Voluntary Unemployment
Benefit Fund Contributions
You can't deduct voluntary unemployment ben-
efit fund contributions you make to a union fund
or a private fund. However, you can deduct
contributions as taxes if state law requires you
to make them to a state unemployment fund
that covers you for the loss of wages from un-
employment caused by business conditions.
Wristwatches
You can't deduct the cost of a wristwatch, even
if there is a job requirement that you know the
correct time to properly perform your duties.
Expenses You Can
Deduct
You can deduct the items listed below as item-
ized deductions. Report these items on Sched-
ule A (Form 1040), line 16, or Schedule A (Form
1040-NR), line 7.
List of Deductions
Each of the following items is discussed in de-
tail after the list (except where indicated).
• Amortizable premium on taxable bonds.
• Casualty and theft losses from income-
producing property.
• Excess deductions of an estate or trust.
• Federal estate tax on income in respect of
a decedent.
• Gambling losses up to the amount of gam-
bling winnings.
• Impairment-related work expenses of per-
sons with disabilities.
• Losses from Ponzi-type investment
schemes (see Pub. 547 for more informa-
tion).
• Repayments of more than $3,000 under a
claim of right.
• Unlawful discrimination claims.
• Unrecovered investment in an annuity.
Amortizable Premium on Taxable
Bonds
In general, if the amount you pay for a bond is
greater than its stated principal amount, the ex-
cess is bond premium. You can elect to amor-
tize the premium on taxable bonds. The amorti-
zation of the premium is generally an offset to
interest income on the bond rather than a sepa-
rate deduction item.
Part of the premium on some bonds may be
an itemized deduction on Schedule A (Form
1040). For more information, see Amortizable
Premium on Taxable Bonds in Pub. 529, and
Bond Premium Amortization in chapter 3 of
Pub. 550, Investment Income and Expenses.
Casualty and Theft Losses of
Income-Producing Property
You can deduct a casualty or theft loss as an
itemized deduction on Schedule A (Form 1040),
line 16, if the damaged or stolen property was
income-producing property (property held for
investment, such as stocks, notes, bonds, gold,
silver, vacant lots, and works of art). First, re-
port the loss in Form 4684, Section B. You may
also have to include the loss on Form 4797 if
you're otherwise required to file that form. To
figure your deduction, add all casualty or theft
losses from this type of property included on
Form 4684, lines 32 and 38b, or Form 4797,
line 18a. For more information on casualty and
theft losses, see Pub. 547.
Excess Deductions of an Estate or
Trust
Generally, if an estate or trust has an excess
deduction resulting from total deductions being
greater than its gross income, in the estate’s or
trust's last tax year, a beneficiary can deduct
the excess deductions, depending on its char-
acter. The excess deductions retain their char-
acter as an adjustment to arrive at adjusted
gross income on Schedule 1 (Form 1040), as a
non-miscellaneous itemized deduction reported
on Schedule A (Form 1040), or as a miscellane-
ous itemized deduction. For more information
on excess deductions of an estate or trust, see
the Instructions for Schedule K-1 (Form 1041)
for a Beneficiary Filing Form 1040.
Federal Estate Tax on Income in
Respect of a Decedent
You can deduct the federal estate tax attributa-
ble to income in respect of a decedent that you
as a beneficiary include in your gross income.
Income in respect of the decedent is gross in-
come that the decedent would have received
had death not occurred and that wasn't properly
includible in the decedent's final income tax re-
turn. See Pub. 559, Survivors, Executors, and
Administrators, for more information.
Gambling Losses up to the
Amount of Gambling Winnings
You must report the full amount of your gam-
bling winnings for the year on Schedule 1 (Form
1040), line 8b. You deduct your gambling los-
ses for the year on Schedule A (Form 1040),
Chapter 12 Other Itemized Deductions Page 103
line 16. You can't deduct gambling losses that
are more than your winnings.
You can't reduce your gambling win-
nings by your gambling losses and re-
port the difference. You must report the
full amount of your winnings as income and
claim your losses (up to the amount of win-
nings) as an itemized deduction. Therefore,
your records should show your winnings sepa-
rately from your losses.
Diary of winnings and losses. You
must keep an accurate diary or similar
record of your losses and winnings.
Your diary should contain at least the following
information.
• The date and type of your specific wager
or wagering activity.
• The name and address or location of the
gambling establishment.
• The names of other persons present with
you at the gambling establishment.
• The amount(s) you won or lost.
See Pub. 529 for more information.
Impairment-Related Work
Expenses
If you have a physical or mental disability that
limits your being employed, or substantially lim-
its one or more of your major life activities, suchCAUTION
!RECORDS
as performing manual tasks, walking, speaking,
breathing, learning, and working, you can de-
duct your impairment-related work expenses.
Impairment-related work expenses are ordi-
nary and necessary business expenses for at-
tendant care services at your place of work and
for other expenses in connection with your
place of work that are necessary for you to be
able to work.
Self-employed. If you're self-employed, en-
ter your impairment-related work expenses on
the appropriate form (Schedule C (Form 1040),
Schedule E (Form 1040), or Schedule F (Form
1040)) used to report your business income and
expenses.
Repayments Under Claim of Right
If you had to repay more than $3,000 that you
included in your income in an earlier year be-
cause at the time you thought you had an unre-
stricted right to it, you may be able to deduct the
amount you repaid or take a credit against your
tax. See Repayments in chapter 8 for more in-
formation.
Unlawful Discrimination Claims
You may be able to deduct, as an adjustment to
income on Schedule 1 (Form 1040), line 24h,
attorney fees and court costs for actions settled
or decided after October 22, 2004, involving a
claim of unlawful discrimination, a claim against
the U.S. Government, or a claim made under
section 1862(b)(3)(A) of the Social Security Act.
However, the amount you can deduct on
Schedule 1 (Form 1040), line 24h, is limited to
the amount of the judgment or settlement you
are including in income for the tax year. See
Pub. 525, Taxable and Nontaxable Income, for
more information.
Unrecovered Investment in
Annuity
A retiree who contributed to the cost of an an-
nuity can exclude from income a part of each
payment received as a tax-free return of the re-
tiree's investment. If the retiree dies before the
entire investment is recovered tax free, any un-
recovered investment can be deducted on the
retiree's final income tax return. See Pub. 575,
Pension and Annuity Income, for more informa-
tion about the tax treatment of pensions and an-
nuities.
Page 104 Chapter 12 Other Itemized Deductions
Part Four.
Figuring Your
Taxes, and
Refundable and
Nonrefundable
Credits
The two chapters in this part explain how to figure your tax. They also
discuss tax credits that, unlike deductions, are subtracted directly from your
tax and reduce your tax dollar for dollar.
The Form 1040 and 1040-SR schedules that are discussed in these
chapters are:
• Schedule 1, Additional Income and Adjustments to Income;
• Schedule 2, Additional Taxes; and
• Schedule 3, Additional Credits and Payments.
13.
How To Figure
Your Tax
Introduction
After you have figured your income and deduc-
tions your next step is to figure your tax. This
chapter discusses:
• The general steps you take to figure your
tax,
• An additional tax you may have to pay
called the alternative minimum tax (AMT),
and
• The conditions you must meet if you want
the IRS to figure your tax.
Useful Items
You may want to see:
Publication
503 Child and Dependent Care Expenses
505 Tax Withholding and Estimated Tax
524 Credit for the Elderly or Disabled
525 Taxable and Nontaxable Income
531 Reporting Tip Income
550 Investment Income and Expenses
560 Retirement Plans for Small Business
575 Pension and Annuity Income
596 Earned Income Credit (EIC)
926 Household Employer’s Tax Guide
929 Tax Rules for Children and
Dependents
969 Health Savings Accounts and Other
Tax-Favored Health Plans
970 Tax Benefits for Education
974 Premium Tax Credit (PTC)
Form (and Instructions)
W-2 Wage and Tax Statement
Schedule SE (Form 1040)
Self-Employment Tax
Schedule 8812 (Form 1040) Credits for
Qualifying Children and Other
Dependents
1116 Foreign Tax Credit
3800 General Business Credit
4136 Credit for Federal Tax Paid on Fuels
4970 Tax on Accumulation Distribution of
Trusts
5329 Additional Taxes on Qualified Plans
(Including IRAs) and Other
Tax-Favored Accounts
5405 Repayment of the First-Time
Homebuyer Credit
5695 Residential Energy Credit
5884 Work Opportunity Credit
8396 Mortgage Interest Credit
8801 Credit for Prior Year Minimum
Tax—Individuals, Estates, and Trusts
8835 Renewable, Electricity, Refined
Coal, and Indian Coal Production
Credit
8839 Qualified Adoption Expenses
8846 Credit for Employer Social Security
and Medicare Taxes Paid on Certain
Employee Tips
8853 Archer MSAs and Long-Term Care
Insurance Contracts
8880 Credit for Qualified Retirement
Savings Contributions
8885 Health Coverage Tax Credit
8889 Health Savings Accounts (HSAs)
8910 Alternative Motor Vehicle Credit
8912 Credit to Holders of Tax Credit
Bonds
8936 Qualified Plug-In Electric Drive
Motor Vehicle Credit
W-2
Schedule SE (Form 1040)
Schedule 8812 (Form 1040)
1116
3800
4136
4970
5329
5405
5695
5884
8396
8801
8835
8839
8846
8853
8880
8885
8889
8910
8912
8936
8959 Additional Medicare Tax
8960 Net Investment Tax—Individuals,
Estates, and Trusts
8962 Premium Tax Credit (PTC)
Figuring Your Tax
Your income tax is based on your taxable in-
come. After you figure your income tax and
AMT, if any, subtract your tax credits and add
any other taxes you may owe. The result is your
total tax. Compare your total tax with your total
payments to determine whether you are entitled
to a refund or must make a payment.
This section provides a general outline of
how to figure your tax. You can find
step-by-step directions in the Instructions for
Form 1040.
Tax. Most taxpayers use either the Tax Table
or the Tax Computation Worksheet to figure
their income tax. However, there are special
methods if your income includes any of the fol-
lowing items.
• A net capital gain. See Pub. 550.
• Qualified dividends taxed at the same
rates as a net capital gain. See Pub. 550.
• Lump-sum distributions. See Pub. 575.
• Farming or fishing income. See Schedule J
(Form 1040).
• Tax for certain children who have un-
earned income. See Pub. 929.
• Parent's election to report child's interest
and dividends. See Pub. 929.
• Foreign earned income exclusion or the
housing exclusion. (See Form 2555, For-
eign Earned Income, and the Foreign
Earned Income Tax Worksheet in the In-
structions for Form 1040.)
Credits. After you figure your income tax and
any AMT (discussed later), determine if you are
eligible for any tax credits. Eligibility information
for these tax credits is discussed in other publi-
cations and your form instructions. The follow-
ing items are some of the credits you may be
able to subtract from your tax and shows where
you can find more information on each credit.
• Adoption credit. See Form 8839.
8959
8960
8962
Chapter 13 How To Figure Your Tax Page 105
• Alternative motor vehicle credit. See Form
8910.
• Child and dependent care credit (nonre-
fundable). See Pub. 503.
• Child tax credit (nonrefundable). See
Schedule 8812 (Form 1040).
• Credit for employer social security and
Medicare taxes paid on certain employee
tips. See Form 8846.
• Credit to holders of tax credit bonds. See
Form 8912.
• Education credit. See Pub. 970.
• Elderly or disabled credit. See Pub. 524.
• Foreign tax credit. See Form 1116.
• General business credit. See Form 3800.
• Mortgage interest credit. See Form 8396.
• Plug-in electric drive motor credit. See
Form 8936.
• Premium tax credit. See Pub. 974.
• Prior year minimum tax credit. See Form
8801.
• Renewable electricity, refined coal, and In-
dian coal production credit. See Form
8835.
• Residential energy credit. See Form 5695.
• Retirement savings contribution credit.
See Form 8880.
• Work opportunity credit. See Form 5884.
Some credits (such as the earned income
credit) aren’t listed because they are treated as
payments. See Payments, later.
Other taxes. After you subtract your tax cred-
its, determine whether there are any other taxes
you must pay. This chapter doesn’t explain
these other taxes. You can find that information
in other publications and your form instructions.
See the following list for other taxes you may
need to add to your income tax.
• Additional Medicare tax. See Form 8959.
• Additional tax on ABLE accounts. See
Pub. 969.
• Additional tax on Archer MSAs and
long-term care insurance contracts. See
Form 8853.
• Additional tax on Coverdell ESAs. See
Form 5329.
• Additional tax on HSAs. See Form 8889.
• Additional tax on income you received
from a nonqualified deferred compensation
plan that fails to meet certain require-
ments. See the Instructions for Form 1040.
• Additional tax on qualified plans and other
tax-favored accounts. See Form 5329.
• Additional tax on qualified retirement plans
and IRAs. See Form 5329.
• Additional tax on qualified tuition pro-
grams. See Pub. 970.
• Excise tax on insider stock compensation
from an expatriated corporation. See the
Instructions for Form 1040.
• Household employment taxes. See Pub.
926.
• Interest on the deferred tax on gain from
certain installment sales with a sales price
over $150,000. See the Instructions for
Form 1040.
• Interest on the tax due on installment in-
come from the sale of certain residential
lots and timeshares. See the Instructions
for Form 1040.
• Net investment income tax. See Form
8960.
• Recapture of an education credit. See
Pub. 970.
• Recapture of other credits. See the Instruc-
tions for Form 1040.
• Repayment of first-time homebuyer credit.
See Form 5405.
• Section 72(m)(5) excess benefits tax. See
Pub. 560.
• Self-employment tax. See the Sched-
ule SE (Form 1040).
• Social security and Medicare tax on tips.
See Pub. 531.
• Social security and Medicare tax on wa-
ges. See Pub. 525.
• Tax on accumulation distribution of trusts.
See Form 4970.
• Tax on golden parachute payments. See
the Instructions for Form 1040.
• Uncollected social security and Medicare
tax on group-term life insurance. See Form
W-2.
• Uncollected social security and Medicare
tax on tips. See Pub. 531.
You may also have to pay AMT (discussed
later in this chapter).
Payments. After you determine your total tax,
figure the total payments you have already
made for the year. Include credits that are trea-
ted as payments. This chapter doesn’t explain
these payments and credits. You can find that
information in other publications and your form
instructions. See the following list of payments
and credits that you may be able to include in
your total payments.
• American opportunity credit. See Pub. 970.
• Child and dependent care credit (refunda-
ble). See Pub. 503.
• Child tax credit (additional or refundable).
See Schedule 8812 (Form 1040).
• Credit for federal tax on fuels. See Form
4136.
• Credit for tax on undistributed capital gain.
See the Instructions for Form 1040.
• Earned income credit. See Pub. 596.
• Estimated tax paid. See Pub. 505.
• Excess social security and RRTA tax with-
held. See the Instructions for Form 1040.
• Federal income tax withheld. See Pub.
505.
• Health coverage tax credit. See Form
8885.
• Net premium tax credit. See the Instruc-
tions for Form 8962 or the Instructions for
Form 1040.
• Qualified sick and family leave credits. See
the Instructions for Form 1040.
• Recovery rebate credit. See the Instruc-
tions for Form 1040.
• Tax paid with extension. See the Instruc-
tions for Form 1040.
Refund or balance due. To determine
whether you are entitled to a refund or whether
you must make a payment, compare your total
payments with your total tax. If you are entitled
to a refund, see your form instructions for infor-
mation on having it directly deposited into one
or more of your accounts (including a traditional
IRA, Roth IRA, or a SEP-IRA), or to purchase
U.S. savings bonds instead of receiving a paper
check.
Alternative
Minimum Tax (AMT)
This section briefly discusses an additional tax
you may have to pay.
The tax law gives special treatment to some
kinds of income and allows special deductions
and credits for some kinds of expenses. Tax-
payers who benefit from this special treatment
may have to pay at least a minimum amount of
tax through an additional tax called AMT.
You may have to pay the AMT if your taxa-
ble income for regular tax purposes, combined
with certain adjustments and tax preference
items, is more than a certain amount. See Form
6251, Alternative Minimum Tax—Individuals.
Adjustments and tax preference items. The
more common adjustments and tax preference
items include:
• Addition of the standard deduction (if
claimed);
• Addition of itemized deductions claimed
for state and local taxes and certain inter-
est;
• Subtraction of any refund of state and local
taxes included in gross income;
• Changes to accelerated depreciation of
certain property;
• Difference between gain or loss on the
sale of property reported for regular tax
purposes and AMT purposes;
• Addition of certain income from incentive
stock options;
• Change in certain passive activity loss de-
ductions;
• Addition of certain depletion that is more
than the adjusted basis of the property;
• Addition of part of the deduction for certain
intangible drilling costs; and
• Addition of tax-exempt interest on certain
private activity bonds.
More information. For more information about
the AMT, see the Instructions for Form 6251.
Tax Figured by IRS
If you file by the due date of your return (not
counting extensions) — April 18, 2022, for most
Page 106 Chapter 13 How To Figure Your Tax
people — you can have the IRS figure your tax
for you on Form 1040 or 1040-SR.
If the IRS figures your tax and you paid too
much, you will receive a refund. If you didn’t pay
enough, you will receive a bill for the balance.
To avoid interest or the penalty for late pay-
ment, you must pay the bill within 30 days of the
date of the bill or by the due date for your return,
whichever is later.
The IRS can also figure the credit for the
elderly or the disabled and the earned income
credit for you.
When the IRS cannot figure your tax. The
IRS can’t figure your tax for you if any of the fol-
lowing apply.
1. You want your refund directly deposited
into your checking or savings account.
2. You want any part of your refund applied
to your 2022 estimated tax.
3. You had income for the year from sources
other than wages, salaries, tips, interest,
dividends, taxable social security benefits,
unemployment compensation, IRA distri-
butions, pensions, and annuities.
4. Your taxable income is $100,000 or more.
5. You itemize deductions.
6. You file any of the following forms.
a. Form 2555, Foreign Earned Income.
b. Form 4137, Social Security and Medi-
care Tax on Unreported Tip Income.
c. Form 4970, Tax on Accumulation Dis-
tribution of Trusts.
d. Form 4972, Tax on Lump-Sum Distri-
butions.
e. Form 6198, At-Risk Limitations.
f. Form 6251, Alternative Minimum
Tax—Individuals.
g. Form 8606, Nondeductible IRAs.
h. Form 8615, Tax for Certain Children
Who Have Unearned Income.
i. Form 8814, Parents' Election To Re-
port Child's Interest and Dividends.
j. Form 8839, Qualified Adoption Ex-
penses.
k. Form 8853, Archer MSAs and
Long-Term Care Insurance Contracts.
l. Form 8889, Health Savings Accounts
(HSAs).
m. Form 8919, Uncollected Social Secur-
ity and Medicare Tax on Wages.
Filing the Return
After you complete the line entries for the tax
form you are filing, fill in your name and ad-
dress. Enter your social security number in the
space provided. If you are married, enter the
social security numbers of you and your
spouse, even if you file separately. Sign and
date your return and enter your occupation(s). If
you are filing a joint return, both you and your
spouse must sign it. Enter your daytime phone
number in the space provided. This may help
speed the processing of your return if we have a
question that can be answered over the phone.
If you are filing a joint return, you may enter ei-
ther your or your spouse's daytime phone num-
ber.
If you want to allow your preparer, a friend, a
family member, or any other person you choose
to discuss your 2021 tax return with the IRS,
check the “Yes” box in the “Third Party Desig-
nee” area on your return. Also, enter the design-
ee's name, phone number, and any five digits
the designee chooses as their personal identifi-
cation number (PIN). If you check the “Yes” box,
you, and your spouse if filing a joint return, are
authorizing the IRS to call the designee to an-
swer any questions that may arise during the
processing of your return.
Fill in and attach any schedules and forms
asked for on the lines you completed to your
paper return. Attach a copy of each of your
Forms W-2 to your paper return. Also, attach to
your paper return any Form 1099-R you re-
ceived that has withholding tax in box 4.
Mail your return to the Internal Revenue
Service Center for the area where you live. A list
of Service Center addresses is in the instruc-
tions for your tax return.
Form 1040 or 1040-SR Line Entries
If you want the IRS to figure your tax. Read
Form 1040 or 1040-SR, lines 1 through 15, and
Schedule 1 (Form 1040), if applicable. Fill in the
lines that apply to you and attach Schedule 1
(Form 1040), if applicable. Don’t complete Form
1040 or 1040-SR, line 16 or 17.
If you are filing a joint return, use the space
on the dotted line next to the words “Adjusted
Gross Income” on the first page of your return to
separately show your taxable income and your
spouse's taxable income.
Read Form 1040 or 1040-SR, lines 19
through 33, and Schedules 2 and 3 (Form
1040), if applicable. Fill in the lines that apply to
you and attach Schedules 2 and 3 (Form 1040),
if applicable. Don’t fill in Form 1040 or 1040-SR,
lines 22, 24, 33, or 34 through 38. Don’t fill in
Schedule 2 (Form 1040), line 1 or 3. Also, don’t
complete Schedule 3 (Form 1040), line 6d, if
you are completing Schedule R (Form 1040), or
Form 1040 or 1040-SR, line 27a, if you want the
IRS to figure the credits shown on those lines.
Payments. If you have federal income tax with-
held that is shown on Form W-2, box 2, Form
1099, box 4, Form W-2G, box 4, or another
form (see Instructions for Form 1040 for more
information) enter the amount on Form 1040 or
1040-SR, line 25. Enter any estimated tax pay-
ments you made on Form 1040 or 1040-SR,
line 26.
Credit for child and dependent care expen-
ses. If you can take this credit, complete Form
2441 and attach it to your paper return. Enter
the amount of the credit on Schedule 3 (Form
1040), line 2 and/or line 13g, whichever applies.
The IRS will not figure this credit.
Net premium tax credit. If you take this credit,
complete Form 8962, Premium Tax Credit
(PTC), and attach it to your return. Enter the
amount of the credit on Schedule 3 (Form
1040), line 9. The IRS will not figure this credit.
Credit for the elderly or the disabled. If you
can take this credit, the IRS can figure it for you.
Enter “CFE” on the line next to Schedule 3
(Form 1040), line 6d, and attach Schedule R
(Form 1040) to your paper return. On Sched-
ule R (Form 1040), check the box in Part I for
your filing status and age. Complete Parts II and
III, lines 11 and 13, if they apply.
Earned income credit. If you can take this
credit, the IRS can figure it for you. Enter “EIC”
on the dotted line on Form 1040 or 1040-SR,
line 27a. If you elect to use your nontaxable
combat pay in figuring your EIC, enter “NCP”
and the amount on the dotted line on Form
1040 or 1040-SR, line 27b. If you elect to use
your 2019 earned income in figuring your EIC,
enter the amount of your 2019 earned income
on the dotted line on Form 1040 or 1040-SR,
line 27c.
If you have a qualifying child, you must fill in
Schedule EIC (Form 1040), Earned Income
Credit, and attach it to your paper return. If you
don’t provide the child's social security number
on Schedule EIC, line 2, the credit will be re-
duced or disallowed unless the child was born
and died in 2021.
If your credit for any year after 1996 was re-
duced or disallowed by the IRS, you may also
have to file Form 8862 with your return. For de-
tails, see the Instructions for Form 1040.
14.
Child Tax Credit
and Credit for
Other
Dependents
What’s New
Schedule 8812 (Form 1040). The Schedule
8812 (Form 1040) and its instructions have
been revised to be the single source for figuring
and reporting the child tax credit and credit for
other dependents. The instructions now include
all applicable worksheets for figuring these
credits. As a result, Pub. 972, Child Tax Credit,
won’t be revised. For prior-year versions of Pub.
972, go to IRS.gov/Pub972.
Enhanced child tax credit. For 2021, the
child tax credit applies to qualifying children
who have not attained age 18 by the end of
2021. Also, the initial amount of the child tax
credit is increased to $3,600 for each qualifying
child who hasn't attained age 6 by the end of
2021 and $3,000 for each other qualifying child
who has not attained age 18 by the end of
2021. The credit for other dependents has not
been enhanced.
Chapter 14 Child Tax Credit and Credit for Other Dependents Page 107
Simplified refundable child tax credit. If you
meet certain residency requirements, your child
tax credit will be fully refundable and easier to
figure. This means you can claim the credit
even if you didn't work and even if you receive
no income. If you do not meet the residency re-
quirements, you will figure your child tax credit
and additional child tax credit in a manner simi-
lar to how these credits were figured for 2020.
Letter 6419. If you received advance child tax
credit payments during 2021, you will receive
Letter 6419. Keep this letter for your records.
You will use the information from this letter to
figure the amount of child tax credit to claim on
your 2021 tax returns or the amount of addi-
tional tax you must report on Schedule 2 (Form
1040).
Additional tax on excess advance child tax
credit payments. If you received advance
child tax credit payments during 2021 and the
credits you figure using Schedule 8812 (Form
1040), Credits for Qualifying Children and Other
Dependents, are less than what you received,
you may owe an additional tax. Complete
Schedule 8812 (Form 1040) to determine if you
must report an additional tax on Schedule 2
(Form 1040).
Reminders
Abbreviations used throughout this chap-
ter. The following abbreviations will be used in
this chapter when appropriate.
• ACTC means additional child tax credit.
• ATIN means adoption taxpayer identifica-
tion number.
• CTC means child tax credit.
• ITIN means individual taxpayer identifica-
tion number.
• NCTC means nonrefundable child tax
credit.
• ODC means credit for other dependents.
• RCTC means refundable child tax credit.
• SSN means social security number.
• TIN means taxpayer identification number.
A TIN may be an ATIN, an ITIN, or an
SSN.
Other abbreviations may be used in this chapter
and will be defined as needed.
Delayed refund for returns claiming the
ACTC. The IRS can’t issue refunds before
mid-February 2022 for returns that properly
claim the ACTC. This time frame applies to the
entire refund, not just the portion associated
with the ACTC.
Introduction
The CTC is a credit that may reduce your tax by
as much as $3,000 ($3,600 in the case of a
qualifying child who has not attained age 6 as of
the close of the calendar year in which the tax
year of the taxpayer begins) for each child who
qualifies you for the credit. See Limits on the
RCTC, NCTC, and ODC, later.
The ACTC is a credit you may be able to
take if you are not able to claim the full amount
of the CTC.
The ODC is a credit that may reduce your
tax by as much as $500 for each eligible de-
pendent.
The CTC and the ACTC shouldn’t be
confused with the child and dependent
care credit discussed in Pub. 503,
Child and Dependent Care Expenses.
Useful Items
You may want to see:
Form (and Instructions)
Schedule 8812 (Form 1040) Credits for
Qualifying Children and Other
Dependents
8862 Information To Claim Certain Credits
After Disallowance
For these and other useful items, go to IRS.gov/
Forms.
Taxpayer Identification
Number Requirements
You must have a TIN by the due date of
your return. If you, or your spouse if filing
jointly, don’t have an SSN or ITIN issued on or
before the due date of your 2021 return (includ-
ing extensions), you can’t claim the RCTC,
NCTC, ODC, or ACTC on either your original or
amended 2021 tax return.
If you apply for an ITIN on or before the due
date of your 2021 return (including extensions)
and the IRS issues you an ITIN as a result of the
application, the IRS will consider your ITIN as
issued on or before the due date of your return.
Each qualifying child you use for RCTC,
NCTC, or ACTC must have the required
SSN. If you have a qualifying child who doesn’t
have the required SSN, you can’t use the child
to claim the RCTC, NCTC, or ACTC on either
your original or amended 2021 tax return. The
required SSN is one that is valid for employ-
ment and is issued before the due date of your
2021 return (including extensions).
If your qualifying child was born and died in
2021 and you don’t have an SSN for the child,
attach a copy of the child’s birth certificate,
death certificate, or hospital records. The docu-
ment must show the child was born alive.
If your qualifying child doesn’t have the re-
quired SSN but has another type of TIN issued
on or before the due date of your 2021 return
(including extensions), you may be able to
claim the ODC for that child. See Credit for
Other Dependents (ODC), later.
Each dependent you use for the ODC must
have a TIN by the due date of your return. If
you have a dependent who doesn’t have an
SSN, ITIN, or ATIN issued on or before the due
date of your 2021 return (including extensions),
you can’t use that dependent to claim the ODC
on either your original or amended 2021 tax re-
turn.
If you apply for an ITIN or ATIN for the de-
pendent on or before the due date of your 2021
return (including extensions) and the IRS issues
the ITIN or ATIN as a result of the application,
the IRS will consider the ITIN or ATIN as issued
on or before the due date of your return.CAUTION
!
Schedule 8812 (Form 1040)
8862
Improper Claims
If you erroneously claim the RCTC, NCTC,
ACTC, or ODC, and it is later determined that
your error was due to reckless or intentional dis-
regard of the RCTC, NCTC, ACTC, or ODC
rules, you will not be allowed to claim any of
these credits for 2 years. If it is determined that
your error was due to fraud, you will not be al-
lowed to claim any of these credits for 10 years.
You may also have to pay penalties.
Form 8862 may be required. If your RCTC,
NCTC, ACTC, or ODC for a year after 2015 was
denied or reduced for any reason other than a
math or clerical error, you must attach Form
8862 to your tax return to claim the RCTC,
NCTC, ACTC, or ODC, unless an exception ap-
plies. See Form 8862, Information To Claim
Certain Credits After Disallowance, and its in-
structions for more information, including
whether an exception applies.
Advance Child Tax
Credit Payments and
Additional Tax
Beginning in July and through December 2021,
the IRS issued advance payments of the 2021
RCTC to taxpayers with qualifying children. The
advance payments were early payments of
50% of the amount of RCTC estimated to be
claimed on the 2021 tax return based on infor-
mation from either a 2019 or 2020 tax return, in-
cluding information provided to the IRS through
an online non-filer tool to receive economic im-
pact payments or advance child tax credit pay-
ments, and information provided in the child tax
credit update portal on IRS.gov/CTCPortal.
Changes throughout the year, such as a
change in filing status or change in the number
of qualifying children, could impact the amount
of child tax credit you are eligible to receive on
your 2021 tax return.
You may not have received advance
child tax credit payments if you unen-
rolled from receiving the payments.
If you received advance child tax credit pay-
ments during 2021 but the amount of the credits
you are eligible for on your 2021 tax return are
less than what you received, you may owe an
additional tax. See Schedule 8812 (Form 1040)
and its instructions for more information.
Letter 6419
The IRS will issue Letter 6419, which will report
the total amount of advance child tax credit pay-
ments issued to you and the number of qualify-
ing children the IRS used to figure your ad-
vance child tax credit payments. You will need
Letter 6419 to figure the amount of child tax
credit to claim on your tax return or the amount
of additional tax you must report. If you did not
receive Letter 6419, go to the child tax credit
update portal at IRS.gov/CTCPortal or call
800-908-4184 to get the information needed.
See Schedule 8812 (Form 1040) and its in-
structions for more information.TIP
Page 108 Chapter 14 Child Tax Credit and Credit for Other Dependents
Married filing jointly. If you filed as married fil-
ing jointly on your prior-year return, then both
you and your spouse will receive a Letter 6419.
Child Tax Credit (CTC)
The CTC is for individuals who claim a child as
a dependent if the child meets additional condi-
tions (described later).
Note. This credit is different from and in ad-
dition to the credit for child and dependent care
expenses and the earned income credit that
you may also be eligible to claim.
The maximum amount you can claim for the
credit is $3,000 ($3,600 in the case of a qualify-
ing child who has not attained age 6 as of the
close of the calendar year in which the tax year
of the taxpayer begins) for each child who quali-
fies you for the CTC. But, see Limits on the
RCTC, NCTC, and ODC, later.
For more information about claiming the
CTC, see Claiming the RCTC, NCTC, and
ODC, later.
Qualifying Child for the
CTC
A child qualifies you for the CTC if the child
meets all of the following conditions.
1. The child is your son, daughter, stepchild,
foster child, brother, sister, stepbrother,
stepsister, half brother, half sister, or a de-
scendant of any of them (for example,
your grandchild, niece, or nephew).
2. The child was under age 18 at the end of
2021.
3. The child didn’t provide over half of his or
her own support for 2021.
4. The child lived with you for more than half
of 2021 (see Exceptions to time lived with
you, later).
5. The child is claimed as a dependent on
your return. See chapter 3 for more infor-
mation about claiming someone as a de-
pendent.
6. The child doesn’t file a joint return for the
year (or files it only to claim a refund of
withheld income tax or estimated tax
paid).
7. The child was a U.S. citizen, U.S. national,
or U.S. resident alien. For more informa-
tion, see Pub. 519, U.S. Tax Guide for Ali-
ens. If the child was adopted, see Adopted
child, later.
Example. Your son turned 18 on Decem-
ber 30, 2021. He is a citizen of the United
States and you claimed him as a dependent on
your return. You can't use him to claim the
RCTC, NCTC, or ACTC because he was not
under age 18 at the end of 2021.
If your child is age 18 or older at the
end of 2021, see Credit for Other De-
pendents (ODC), later.
Adopted child. An adopted child is always
treated as your own child. An adopted child in-TIP
cludes a child lawfully placed with you for legal
adoption.
If you are a U.S. citizen or U.S. national and
your adopted child lived with you all year as a
member of your household in 2021, that child
meets condition 7, earlier, to be a qualifying
child for the child tax credit (or condition 3, later,
to be a qualifying person for the ODC).
Exceptions to time lived with you. A child is
considered to have lived with you for more than
half of 2021 if the child was born or died in 2021
and your home was this child's home for more
than half the time he or she was alive. Tempo-
rary absences by you or the child for special cir-
cumstances, such as school, vacation, busi-
ness, medical care, military service, or
detention in a juvenile facility, count as time the
child lived with you.
There are also exceptions for kidnapped
children and children of divorced or separated
parents. For details, see Residency Test in
chapter 3.
Qualifying child of more than one person.
A special rule applies if your qualifying child is
the qualifying child of more than one person.
For details, see Qualifying Child of More Than
One Person in chapter 3.
Required SSN
In addition to being a qualifying child for the
CTC, your child must have the required SSN.
The required SSN is one that is valid for em-
ployment and that is issued by the Social Se-
curity Administration (SSA) before the due date
of your 2021 return (including extensions).
If your qualifying child does not have
the required SSN, see Credit for Other
Dependents (ODC), later.
If your child was a U.S. citizen when the
child received the SSN, the SSN is valid for em-
ployment. If “Not Valid for Employment” is prin-
ted on your child’s social security card and your
child’s immigration status has changed so that
your child is now a U.S. citizen or permanent
resident, ask the SSA for a new social security
card without the legend. However, if “Valid for
Work Only With DHS Authorization” is printed
on your child’s social security card, your child
has the required SSN only as long as the De-
partment of Homeland Security (DHS) authori-
zation is valid.
If your child doesn’t have the required SSN,
you can't use the child to claim the CTC (or
ACTC) on either your original or amended 2021
tax return.
Credit for Other
Dependents (ODC)
This credit is for individuals with a dependent
who meets additional conditions (described
later).
Note. This credit is different from and in ad-
dition to the credit for child and dependent care
expenses that you may also be eligible to claim.
The maximum amount you can claim for this
credit is $500 for each qualifying dependent.TIP
See Limits on the RCTC, NCTC, and ODC,
later.
For more information about claiming the
ODC, see Claiming the RCTC, NCTC, and
ODC, later.
Qualifying Person for the
ODC
A person qualifies you for the ODC if the person
meets all of the following conditions.
1. The person is claimed as a dependent on
your return. See chapter 3 for more infor-
mation about claiming someone as a de-
pendent.
2. The person can’t be used by you to claim
the RCTC, NCTC, or ACTC. See Child
Tax Credit (CTC), earlier.
3. The person was a U.S. citizen, U.S. na-
tional, or U.S. resident alien. For more in-
formation, see Pub. 519. If the person is
your adopted child, see Adopted child,
earlier.
Example. Your 10-year-old nephew lives in
Mexico and qualifies as your dependent. He is
not a U.S. citizen, U.S. national, or U.S. resident
alien. You can’t use him to claim the ODC.
You can’t use the same child to claim
the RCTC, NCTC, or ACTC, and the
ODC.
Timely Issued TIN
In addition to being a qualifying person for the
ODC, the person must have an SSN, ITIN, or
ATIN issued to the dependent on or before the
due date of your 2021 return (including exten-
sions). If the person has not been issued an
SSN, ITIN, or ATIN by that date, you can’t use
the person to claim the ODC on either your orig-
inal or amended 2021 return. For more informa-
tion, see Taxpayer Identification Number Re-
quirements, earlier.
Limits on the RCTC,
NCTC, and ODC
The credit amount of your RCTC, NCTC, or
ODC may be reduced if your modified adjusted
gross income (AGI) is more than the amounts
shown below for your filing status.
• Married filing jointly or Qualifying
widow(er) — $150,000.
• Head of household — $112,500.
• All other filing statuses — $75,000.
AGI. Your AGI is the amount on line 11 of
your Form 1040, 1040-SR, or 1040-NR.
For more information about limits on the
RCTC, NCTC, and ODC, see the Instructions
for Schedule 8812 (Form 1040).CAUTION
!
Chapter 14 Child Tax Credit and Credit for Other Dependents Page 109
Claiming the RCTC,
NCTC, and ODC
To claim the RCTC, NCTC, or ODC, be sure
you meet the following requirements.
• You must file Form 1040, 1040-SR, or
1040-NR and include the name and TIN of
each dependent for whom you are claim-
ing the RCTC, NCTC, or ODC.
• You must file Form 8862, if applicable. See
Improper Claims, earlier.
• You must enter a timely issued TIN on your
tax return for you and your spouse (if filing
jointly). See Taxpayer Identification Num-
ber Requirements, earlier.
• For each qualifying child under 18 for
whom you are claiming the CTC, you must
enter the required SSN for the child in col-
umn (2) of the Dependents section of your
tax return and check the Child tax credit
box in column (4). See Child Tax Credit
(CTC), earlier.
• For each dependent for whom you are
claiming the ODC, you must enter the
timely issued TIN for the dependent in col-
umn (2) of the Dependents section of your
tax return and check the Credit for other
dependents box in column (4). See Credit
for Other Dependents (ODC), earlier.
Don't check both the Child tax credit
box and the Credit for other depend-
ents box for the same person.CAUTION
!
Additional Child Tax
Credit (ACTC)
This credit is for certain individuals who get less
than the full amount of the CTC.
The ODC can’t be used to figure the
ACTC. Only your CTC can be used to
figure your ACTC. If you are claiming
the ODC but not the CTC, you can’t claim the
ACTC.
Foreign earned income. If you file Form 2555
(relating to foreign earned income), you can’t
claim the ACTC.
How to claim the ACTC. To claim the ACTC,
see Schedule 8812 (Form 1040) and its instruc-
tions.CAUTION
!
Page 110 Chapter 14 Child Tax Credit and Credit for Other Dependents
2021
Tax TableCAUTION
!
See the instructions for line 16 to see if you must use the Tax Table
below to figure your tax.At
Least
But
Less
Than
Single Married
filing
jointly*
Married
filing
sepa-
rately
Head
of a
house-
hold
Your tax is—
25,200
25,250
25,300
25,350
2,828
2,834
2,840
2,846
Sample Table
25,250
25,300
25,350
25,400
2,629
2,635
2,641
2,647
2,828
2,834
2,840
2,846
2,743
2,749
2,755
2,761
Example. Mr. and Mrs. Brown are filing a joint return. Their taxable income on
Form 1040, line 15, is $25,300. First, they find the $25,300–25,350 taxable income
line. Next, they find the column for married filing jointly and read down the column.
The amount shown where the taxable income line and filing status column meet is
$2,641. This is the tax amount they should enter in the entry space on Form 1040,
line 16.
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
0 5 0 0 0 0
5 15 1 1 1 1
15 25 2 2 2 2
25 50 4 4 4 4
50 75 6 6 6 6
75 100 9 9 9 9
100 125 11 11 11 11
125 150 14 14 14 14
150 175 16 16 16 16
175 200 19 19 19 19
200 225 21 21 21 21
225 250 24 24 24 24
250 275 26 26 26 26
275 300 29 29 29 29
300 325 31 31 31 31
325 350 34 34 34 34
350 375 36 36 36 36
375 400 39 39 39 39
400 425 41 41 41 41
425 450 44 44 44 44
450 475 46 46 46 46
475 500 49 49 49 49
500 525 51 51 51 51
525 550 54 54 54 54
550 575 56 56 56 56
575 600 59 59 59 59
600 625 61 61 61 61
625 650 64 64 64 64
650 675 66 66 66 66
675 700 69 69 69 69
700 725 71 71 71 71
725 750 74 74 74 74
750 775 76 76 76 76
775 800 79 79 79 79
800 825 81 81 81 81
825 850 84 84 84 84
850 875 86 86 86 86
875 900 89 89 89 89
900 925 91 91 91 91
925 950 94 94 94 94
950 975 96 96 96 96
975 1,000 99 99 99 99
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
1,000
1,000 1,025 101 101 101 101
1,025 1,050 104 104 104 104
1,050 1,075 106 106 106 106
1,075 1,100 109 109 109 109
1,100 1,125 111 111 111 111
1,125 1,150 114 114 114 114
1,150 1,175 116 116 116 116
1,175 1,200 119 119 119 119
1,200 1,225 121 121 121 121
1,225 1,250 124 124 124 124
1,250 1,275 126 126 126 126
1,275 1,300 129 129 129 129
1,300 1,325 131 131 131 131
1,325 1,350 134 134 134 134
1,350 1,375 136 136 136 136
1,375 1,400 139 139 139 139
1,400 1,425 141 141 141 141
1,425 1,450 144 144 144 144
1,450 1,475 146 146 146 146
1,475 1,500 149 149 149 149
1,500 1,525 151 151 151 151
1,525 1,550 154 154 154 154
1,550 1,575 156 156 156 156
1,575 1,600 159 159 159 159
1,600 1,625 161 161 161 161
1,625 1,650 164 164 164 164
1,650 1,675 166 166 166 166
1,675 1,700 169 169 169 169
1,700 1,725 171 171 171 171
1,725 1,750 174 174 174 174
1,750 1,775 176 176 176 176
1,775 1,800 179 179 179 179
1,800 1,825 181 181 181 181
1,825 1,850 184 184 184 184
1,850 1,875 186 186 186 186
1,875 1,900 189 189 189 189
1,900 1,925 191 191 191 191
1,925 1,950 194 194 194 194
1,950 1,975 196 196 196 196
1,975 2,000 199 199 199 199
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
2,000
2,000 2,025 201 201 201 201
2,025 2,050 204 204 204 204
2,050 2,075 206 206 206 206
2,075 2,100 209 209 209 209
2,100 2,125 211 211 211 211
2,125 2,150 214 214 214 214
2,150 2,175 216 216 216 216
2,175 2,200 219 219 219 219
2,200 2,225 221 221 221 221
2,225 2,250 224 224 224 224
2,250 2,275 226 226 226 226
2,275 2,300 229 229 229 229
2,300 2,325 231 231 231 231
2,325 2,350 234 234 234 234
2,350 2,375 236 236 236 236
2,375 2,400 239 239 239 239
2,400 2,425 241 241 241 241
2,425 2,450 244 244 244 244
2,450 2,475 246 246 246 246
2,475 2,500 249 249 249 249
2,500 2,525 251 251 251 251
2,525 2,550 254 254 254 254
2,550 2,575 256 256 256 256
2,575 2,600 259 259 259 259
2,600 2,625 261 261 261 261
2,625 2,650 264 264 264 264
2,650 2,675 266 266 266 266
2,675 2,700 269 269 269 269
2,700 2,725 271 271 271 271
2,725 2,750 274 274 274 274
2,750 2,775 276 276 276 276
2,775 2,800 279 279 279 279
2,800 2,825 281 281 281 281
2,825 2,850 284 284 284 284
2,850 2,875 286 286 286 286
2,875 2,900 289 289 289 289
2,900 2,925 291 291 291 291
2,925 2,950 294 294 294 294
2,950 2,975 296 296 296 296
2,975 3,000 299 299 299 299
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
3,000
3,000 3,050 303 303 303 303
3,050 3,100 308 308 308 308
3,100 3,150 313 313 313 313
3,150 3,200 318 318 318 318
3,200 3,250 323 323 323 323
3,250 3,300 328 328 328 328
3,300 3,350 333 333 333 333
3,350 3,400 338 338 338 338
3,400 3,450 343 343 343 343
3,450 3,500 348 348 348 348
3,500 3,550 353 353 353 353
3,550 3,600 358 358 358 358
3,600 3,650 363 363 363 363
3,650 3,700 368 368 368 368
3,700 3,750 373 373 373 373
3,750 3,800 378 378 378 378
3,800 3,850 383 383 383 383
3,850 3,900 388 388 388 388
3,900 3,950 393 393 393 393
3,950 4,000 398 398 398 398
4,000
4,000 4,050 403 403 403 403
4,050 4,100 408 408 408 408
4,100 4,150 413 413 413 413
4,150 4,200 418 418 418 418
4,200 4,250 423 423 423 423
4,250 4,300 428 428 428 428
4,300 4,350 433 433 433 433
4,350 4,400 438 438 438 438
4,400 4,450 443 443 443 443
4,450 4,500 448 448 448 448
4,500 4,550 453 453 453 453
4,550 4,600 458 458 458 458
4,600 4,650 463 463 463 463
4,650 4,700 468 468 468 468
4,700 4,750 473 473 473 473
4,750 4,800 478 478 478 478
4,800 4,850 483 483 483 483
4,850 4,900 488 488 488 488
4,900 4,950 493 493 493 493
4,950 5,000 498 498 498 498
5,000
5,000 5,050 503 503 503 503
5,050 5,100 508 508 508 508
5,100 5,150 513 513 513 513
5,150 5,200 518 518 518 518
5,200 5,250 523 523 523 523
5,250 5,300 528 528 528 528
5,300 5,350 533 533 533 533
5,350 5,400 538 538 538 538
5,400 5,450 543 543 543 543
5,450 5,500 548 548 548 548
5,500 5,550 553 553 553 553
5,550 5,600 558 558 558 558
5,600 5,650 563 563 563 563
5,650 5,700 568 568 568 568
5,700 5,750 573 573 573 573
5,750 5,800 578 578 578 578
5,800 5,850 583 583 583 583
5,850 5,900 588 588 588 588
5,900 5,950 593 593 593 593
5,950 6,000 598 598 598 598
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
6,000
6,000 6,050 603 603 603 603
6,050 6,100 608 608 608 608
6,100 6,150 613 613 613 613
6,150 6,200 618 618 618 618
6,200 6,250 623 623 623 623
6,250 6,300 628 628 628 628
6,300 6,350 633 633 633 633
6,350 6,400 638 638 638 638
6,400 6,450 643 643 643 643
6,450 6,500 648 648 648 648
6,500 6,550 653 653 653 653
6,550 6,600 658 658 658 658
6,600 6,650 663 663 663 663
6,650 6,700 668 668 668 668
6,700 6,750 673 673 673 673
6,750 6,800 678 678 678 678
6,800 6,850 683 683 683 683
6,850 6,900 688 688 688 688
6,900 6,950 693 693 693 693
6,950 7,000 698 698 698 698
7,000
7,000 7,050 703 703 703 703
7,050 7,100 708 708 708 708
7,100 7,150 713 713 713 713
7,150 7,200 718 718 718 718
7,200 7,250 723 723 723 723
7,250 7,300 728 728 728 728
7,300 7,350 733 733 733 733
7,350 7,400 738 738 738 738
7,400 7,450 743 743 743 743
7,450 7,500 748 748 748 748
7,500 7,550 753 753 753 753
7,550 7,600 758 758 758 758
7,600 7,650 763 763 763 763
7,650 7,700 768 768 768 768
7,700 7,750 773 773 773 773
7,750 7,800 778 778 778 778
7,800 7,850 783 783 783 783
7,850 7,900 788 788 788 788
7,900 7,950 793 793 793 793
7,950 8,000 798 798 798 798
8,000
8,000 8,050 803 803 803 803
8,050 8,100 808 808 808 808
8,100 8,150 813 813 813 813
8,150 8,200 818 818 818 818
8,200 8,250 823 823 823 823
8,250 8,300 828 828 828 828
8,300 8,350 833 833 833 833
8,350 8,400 838 838 838 838
8,400 8,450 843 843 843 843
8,450 8,500 848 848 848 848
8,500 8,550 853 853 853 853
8,550 8,600 858 858 858 858
8,600 8,650 863 863 863 863
8,650 8,700 868 868 868 868
8,700 8,750 873 873 873 873
8,750 8,800 878 878 878 878
8,800 8,850 883 883 883 883
8,850 8,900 888 888 888 888
8,900 8,950 893 893 893 893
8,950 9,000 898 898 898 898
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
9,000
9,000 9,050 903 903 903 903
9,050 9,100 908 908 908 908
9,100 9,150 913 913 913 913
9,150 9,200 918 918 918 918
9,200 9,250 923 923 923 923
9,250 9,300 928 928 928 928
9,300 9,350 933 933 933 933
9,350 9,400 938 938 938 938
9,400 9,450 943 943 943 943
9,450 9,500 948 948 948 948
9,500 9,550 953 953 953 953
9,550 9,600 958 958 958 958
9,600 9,650 963 963 963 963
9,650 9,700 968 968 968 968
9,700 9,750 973 973 973 973
9,750 9,800 978 978 978 978
9,800 9,850 983 983 983 983
9,850 9,900 988 988 988 988
9,900 9,950 993 993 993 993
9,950 10,000 998 998 998 998
10,000
10,000 10,050 1,004 1,003 1,004 1,003
10,050 10,100 1,010 1,008 1,010 1,008
10,100 10,150 1,016 1,013 1,016 1,013
10,150 10,200 1,022 1,018 1,022 1,018
10,200 10,250 1,028 1,023 1,028 1,023
10,250 10,300 1,034 1,028 1,034 1,028
10,300 10,350 1,040 1,033 1,040 1,033
10,350 10,400 1,046 1,038 1,046 1,038
10,400 10,450 1,052 1,043 1,052 1,043
10,450 10,500 1,058 1,048 1,058 1,048
10,500 10,550 1,064 1,053 1,064 1,053
10,550 10,600 1,070 1,058 1,070 1,058
10,600 10,650 1,076 1,063 1,076 1,063
10,650 10,700 1,082 1,068 1,082 1,068
10,700 10,750 1,088 1,073 1,088 1,073
10,750 10,800 1,094 1,078 1,094 1,078
10,800 10,850 1,100 1,083 1,100 1,083
10,850 10,900 1,106 1,088 1,106 1,088
10,900 10,950 1,112 1,093 1,112 1,093
10,950 11,000 1,118 1,098 1,118 1,098
11,000
11,000 11,050 1,124 1,103 1,124 1,103
11,050 11,100 1,130 1,108 1,130 1,108
11,100 11,150 1,136 1,113 1,136 1,113
11,150 11,200 1,142 1,118 1,142 1,118
11,200 11,250 1,148 1,123 1,148 1,123
11,250 11,300 1,154 1,128 1,154 1,128
11,300 11,350 1,160 1,133 1,160 1,133
11,350 11,400 1,166 1,138 1,166 1,138
11,400 11,450 1,172 1,143 1,172 1,143
11,450 11,500 1,178 1,148 1,178 1,148
11,500 11,550 1,184 1,153 1,184 1,153
11,550 11,600 1,190 1,158 1,190 1,158
11,600 11,650 1,196 1,163 1,196 1,163
11,650 11,700 1,202 1,168 1,202 1,168
11,700 11,750 1,208 1,173 1,208 1,173
11,750 11,800 1,214 1,178 1,214 1,178
11,800 11,850 1,220 1,183 1,220 1,183
11,850 11,900 1,226 1,188 1,226 1,188
11,900 11,950 1,232 1,193 1,232 1,193
11,950 12,000 1,238 1,198 1,238 1,198
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
12,000
12,000 12,050 1,244 1,203 1,244 1,203
12,050 12,100 1,250 1,208 1,250 1,208
12,100 12,150 1,256 1,213 1,256 1,213
12,150 12,200 1,262 1,218 1,262 1,218
12,200 12,250 1,268 1,223 1,268 1,223
12,250 12,300 1,274 1,228 1,274 1,228
12,300 12,350 1,280 1,233 1,280 1,233
12,350 12,400 1,286 1,238 1,286 1,238
12,400 12,450 1,292 1,243 1,292 1,243
12,450 12,500 1,298 1,248 1,298 1,248
12,500 12,550 1,304 1,253 1,304 1,253
12,550 12,600 1,310 1,258 1,310 1,258
12,600 12,650 1,316 1,263 1,316 1,263
12,650 12,700 1,322 1,268 1,322 1,268
12,700 12,750 1,328 1,273 1,328 1,273
12,750 12,800 1,334 1,278 1,334 1,278
12,800 12,850 1,340 1,283 1,340 1,283
12,850 12,900 1,346 1,288 1,346 1,288
12,900 12,950 1,352 1,293 1,352 1,293
12,950 13,000 1,358 1,298 1,358 1,298
13,000
13,000 13,050 1,364 1,303 1,364 1,303
13,050 13,100 1,370 1,308 1,370 1,308
13,100 13,150 1,376 1,313 1,376 1,313
13,150 13,200 1,382 1,318 1,382 1,318
13,200 13,250 1,388 1,323 1,388 1,323
13,250 13,300 1,394 1,328 1,394 1,328
13,300 13,350 1,400 1,333 1,400 1,333
13,350 13,400 1,406 1,338 1,406 1,338
13,400 13,450 1,412 1,343 1,412 1,343
13,450 13,500 1,418 1,348 1,418 1,348
13,500 13,550 1,424 1,353 1,424 1,353
13,550 13,600 1,430 1,358 1,430 1,358
13,600 13,650 1,436 1,363 1,436 1,363
13,650 13,700 1,442 1,368 1,442 1,368
13,700 13,750 1,448 1,373 1,448 1,373
13,750 13,800 1,454 1,378 1,454 1,378
13,800 13,850 1,460 1,383 1,460 1,383
13,850 13,900 1,466 1,388 1,466 1,388
13,900 13,950 1,472 1,393 1,472 1,393
13,950 14,000 1,478 1,398 1,478 1,398
14,000
14,000 14,050 1,484 1,403 1,484 1,403
14,050 14,100 1,490 1,408 1,490 1,408
14,100 14,150 1,496 1,413 1,496 1,413
14,150 14,200 1,502 1,418 1,502 1,418
14,200 14,250 1,508 1,423 1,508 1,423
14,250 14,300 1,514 1,428 1,514 1,429
14,300 14,350 1,520 1,433 1,520 1,435
14,350 14,400 1,526 1,438 1,526 1,441
14,400 14,450 1,532 1,443 1,532 1,447
14,450 14,500 1,538 1,448 1,538 1,453
14,500 14,550 1,544 1,453 1,544 1,459
14,550 14,600 1,550 1,458 1,550 1,465
14,600 14,650 1,556 1,463 1,556 1,471
14,650 14,700 1,562 1,468 1,562 1,477
14,700 14,750 1,568 1,473 1,568 1,483
14,750 14,800 1,574 1,478 1,574 1,489
14,800 14,850 1,580 1,483 1,580 1,495
14,850 14,900 1,586 1,488 1,586 1,501
14,900 14,950 1,592 1,493 1,592 1,507
14,950 15,000 1,598 1,498 1,598 1,513
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
15,000
15,000 15,050 1,604 1,503 1,604 1,519
15,050 15,100 1,610 1,508 1,610 1,525
15,100 15,150 1,616 1,513 1,616 1,531
15,150 15,200 1,622 1,518 1,622 1,537
15,200 15,250 1,628 1,523 1,628 1,543
15,250 15,300 1,634 1,528 1,634 1,549
15,300 15,350 1,640 1,533 1,640 1,555
15,350 15,400 1,646 1,538 1,646 1,561
15,400 15,450 1,652 1,543 1,652 1,567
15,450 15,500 1,658 1,548 1,658 1,573
15,500 15,550 1,664 1,553 1,664 1,579
15,550 15,600 1,670 1,558 1,670 1,585
15,600 15,650 1,676 1,563 1,676 1,591
15,650 15,700 1,682 1,568 1,682 1,597
15,700 15,750 1,688 1,573 1,688 1,603
15,750 15,800 1,694 1,578 1,694 1,609
15,800 15,850 1,700 1,583 1,700 1,615
15,850 15,900 1,706 1,588 1,706 1,621
15,900 15,950 1,712 1,593 1,712 1,627
15,950 16,000 1,718 1,598 1,718 1,633
16,000
16,000 16,050 1,724 1,603 1,724 1,639
16,050 16,100 1,730 1,608 1,730 1,645
16,100 16,150 1,736 1,613 1,736 1,651
16,150 16,200 1,742 1,618 1,742 1,657
16,200 16,250 1,748 1,623 1,748 1,663
16,250 16,300 1,754 1,628 1,754 1,669
16,300 16,350 1,760 1,633 1,760 1,675
16,350 16,400 1,766 1,638 1,766 1,681
16,400 16,450 1,772 1,643 1,772 1,687
16,450 16,500 1,778 1,648 1,778 1,693
16,500 16,550 1,784 1,653 1,784 1,699
16,550 16,600 1,790 1,658 1,790 1,705
16,600 16,650 1,796 1,663 1,796 1,711
16,650 16,700 1,802 1,668 1,802 1,717
16,700 16,750 1,808 1,673 1,808 1,723
16,750 16,800 1,814 1,678 1,814 1,729
16,800 16,850 1,820 1,683 1,820 1,735
16,850 16,900 1,826 1,688 1,826 1,741
16,900 16,950 1,832 1,693 1,832 1,747
16,950 17,000 1,838 1,698 1,838 1,753
17,000
17,000 17,050 1,844 1,703 1,844 1,759
17,050 17,100 1,850 1,708 1,850 1,765
17,100 17,150 1,856 1,713 1,856 1,771
17,150 17,200 1,862 1,718 1,862 1,777
17,200 17,250 1,868 1,723 1,868 1,783
17,250 17,300 1,874 1,728 1,874 1,789
17,300 17,350 1,880 1,733 1,880 1,795
17,350 17,400 1,886 1,738 1,886 1,801
17,400 17,450 1,892 1,743 1,892 1,807
17,450 17,500 1,898 1,748 1,898 1,813
17,500 17,550 1,904 1,753 1,904 1,819
17,550 17,600 1,910 1,758 1,910 1,825
17,600 17,650 1,916 1,763 1,916 1,831
17,650 17,700 1,922 1,768 1,922 1,837
17,700 17,750 1,928 1,773 1,928 1,843
17,750 17,800 1,934 1,778 1,934 1,849
17,800 17,850 1,940 1,783 1,940 1,855
17,850 17,900 1,946 1,788 1,946 1,861
17,900 17,950 1,952 1,793 1,952 1,867
17,950 18,000 1,958 1,798 1,958 1,873
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
18,000
18,000 18,050 1,964 1,803 1,964 1,879
18,050 18,100 1,970 1,808 1,970 1,885
18,100 18,150 1,976 1,813 1,976 1,891
18,150 18,200 1,982 1,818 1,982 1,897
18,200 18,250 1,988 1,823 1,988 1,903
18,250 18,300 1,994 1,828 1,994 1,909
18,300 18,350 2,000 1,833 2,000 1,915
18,350 18,400 2,006 1,838 2,006 1,921
18,400 18,450 2,012 1,843 2,012 1,927
18,450 18,500 2,018 1,848 2,018 1,933
18,500 18,550 2,024 1,853 2,024 1,939
18,550 18,600 2,030 1,858 2,030 1,945
18,600 18,650 2,036 1,863 2,036 1,951
18,650 18,700 2,042 1,868 2,042 1,957
18,700 18,750 2,048 1,873 2,048 1,963
18,750 18,800 2,054 1,878 2,054 1,969
18,800 18,850 2,060 1,883 2,060 1,975
18,850 18,900 2,066 1,888 2,066 1,981
18,900 18,950 2,072 1,893 2,072 1,987
18,950 19,000 2,078 1,898 2,078 1,993
19,000
19,000 19,050 2,084 1,903 2,084 1,999
19,050 19,100 2,090 1,908 2,090 2,005
19,100 19,150 2,096 1,913 2,096 2,011
19,150 19,200 2,102 1,918 2,102 2,017
19,200 19,250 2,108 1,923 2,108 2,023
19,250 19,300 2,114 1,928 2,114 2,029
19,300 19,350 2,120 1,933 2,120 2,035
19,350 19,400 2,126 1,938 2,126 2,041
19,400 19,450 2,132 1,943 2,132 2,047
19,450 19,500 2,138 1,948 2,138 2,053
19,500 19,550 2,144 1,953 2,144 2,059
19,550 19,600 2,150 1,958 2,150 2,065
19,600 19,650 2,156 1,963 2,156 2,071
19,650 19,700 2,162 1,968 2,162 2,077
19,700 19,750 2,168 1,973 2,168 2,083
19,750 19,800 2,174 1,978 2,174 2,089
19,800 19,850 2,180 1,983 2,180 2,095
19,850 19,900 2,186 1,988 2,186 2,101
19,900 19,950 2,192 1,993 2,192 2,107
19,950 20,000 2,198 1,999 2,198 2,113
20,000
20,000 20,050 2,204 2,005 2,204 2,119
20,050 20,100 2,210 2,011 2,210 2,125
20,100 20,150 2,216 2,017 2,216 2,131
20,150 20,200 2,222 2,023 2,222 2,137
20,200 20,250 2,228 2,029 2,228 2,143
20,250 20,300 2,234 2,035 2,234 2,149
20,300 20,350 2,240 2,041 2,240 2,155
20,350 20,400 2,246 2,047 2,246 2,161
20,400 20,450 2,252 2,053 2,252 2,167
20,450 20,500 2,258 2,059 2,258 2,173
20,500 20,550 2,264 2,065 2,264 2,179
20,550 20,600 2,270 2,071 2,270 2,185
20,600 20,650 2,276 2,077 2,276 2,191
20,650 20,700 2,282 2,083 2,282 2,197
20,700 20,750 2,288 2,089 2,288 2,203
20,750 20,800 2,294 2,095 2,294 2,209
20,800 20,850 2,300 2,101 2,300 2,215
20,850 20,900 2,306 2,107 2,306 2,221
20,900 20,950 2,312 2,113 2,312 2,227
20,950 21,000 2,318 2,119 2,318 2,233
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
21,000
21,000 21,050 2,324 2,125 2,324 2,239
21,050 21,100 2,330 2,131 2,330 2,245
21,100 21,150 2,336 2,137 2,336 2,251
21,150 21,200 2,342 2,143 2,342 2,257
21,200 21,250 2,348 2,149 2,348 2,263
21,250 21,300 2,354 2,155 2,354 2,269
21,300 21,350 2,360 2,161 2,360 2,275
21,350 21,400 2,366 2,167 2,366 2,281
21,400 21,450 2,372 2,173 2,372 2,287
21,450 21,500 2,378 2,179 2,378 2,293
21,500 21,550 2,384 2,185 2,384 2,299
21,550 21,600 2,390 2,191 2,390 2,305
21,600 21,650 2,396 2,197 2,396 2,311
21,650 21,700 2,402 2,203 2,402 2,317
21,700 21,750 2,408 2,209 2,408 2,323
21,750 21,800 2,414 2,215 2,414 2,329
21,800 21,850 2,420 2,221 2,420 2,335
21,850 21,900 2,426 2,227 2,426 2,341
21,900 21,950 2,432 2,233 2,432 2,347
21,950 22,000 2,438 2,239 2,438 2,353
22,000
22,000 22,050 2,444 2,245 2,444 2,359
22,050 22,100 2,450 2,251 2,450 2,365
22,100 22,150 2,456 2,257 2,456 2,371
22,150 22,200 2,462 2,263 2,462 2,377
22,200 22,250 2,468 2,269 2,468 2,383
22,250 22,300 2,474 2,275 2,474 2,389
22,300 22,350 2,480 2,281 2,480 2,395
22,350 22,400 2,486 2,287 2,486 2,401
22,400 22,450 2,492 2,293 2,492 2,407
22,450 22,500 2,498 2,299 2,498 2,413
22,500 22,550 2,504 2,305 2,504 2,419
22,550 22,600 2,510 2,311 2,510 2,425
22,600 22,650 2,516 2,317 2,516 2,431
22,650 22,700 2,522 2,323 2,522 2,437
22,700 22,750 2,528 2,329 2,528 2,443
22,750 22,800 2,534 2,335 2,534 2,449
22,800 22,850 2,540 2,341 2,540 2,455
22,850 22,900 2,546 2,347 2,546 2,461
22,900 22,950 2,552 2,353 2,552 2,467
22,950 23,000 2,558 2,359 2,558 2,473
23,000
23,000 23,050 2,564 2,365 2,564 2,479
23,050 23,100 2,570 2,371 2,570 2,485
23,100 23,150 2,576 2,377 2,576 2,491
23,150 23,200 2,582 2,383 2,582 2,497
23,200 23,250 2,588 2,389 2,588 2,503
23,250 23,300 2,594 2,395 2,594 2,509
23,300 23,350 2,600 2,401 2,600 2,515
23,350 23,400 2,606 2,407 2,606 2,521
23,400 23,450 2,612 2,413 2,612 2,527
23,450 23,500 2,618 2,419 2,618 2,533
23,500 23,550 2,624 2,425 2,624 2,539
23,550 23,600 2,630 2,431 2,630 2,545
23,600 23,650 2,636 2,437 2,636 2,551
23,650 23,700 2,642 2,443 2,642 2,557
23,700 23,750 2,648 2,449 2,648 2,563
23,750 23,800 2,654 2,455 2,654 2,569
23,800 23,850 2,660 2,461 2,660 2,575
23,850 23,900 2,666 2,467 2,666 2,581
23,900 23,950 2,672 2,473 2,672 2,587
23,950 24,000 2,678 2,479 2,678 2,593
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
24,000
24,000 24,050 2,684 2,485 2,684 2,599
24,050 24,100 2,690 2,491 2,690 2,605
24,100 24,150 2,696 2,497 2,696 2,611
24,150 24,200 2,702 2,503 2,702 2,617
24,200 24,250 2,708 2,509 2,708 2,623
24,250 24,300 2,714 2,515 2,714 2,629
24,300 24,350 2,720 2,521 2,720 2,635
24,350 24,400 2,726 2,527 2,726 2,641
24,400 24,450 2,732 2,533 2,732 2,647
24,450 24,500 2,738 2,539 2,738 2,653
24,500 24,550 2,744 2,545 2,744 2,659
24,550 24,600 2,750 2,551 2,750 2,665
24,600 24,650 2,756 2,557 2,756 2,671
24,650 24,700 2,762 2,563 2,762 2,677
24,700 24,750 2,768 2,569 2,768 2,683
24,750 24,800 2,774 2,575 2,774 2,689
24,800 24,850 2,780 2,581 2,780 2,695
24,850 24,900 2,786 2,587 2,786 2,701
24,900 24,950 2,792 2,593 2,792 2,707
24,950 25,000 2,798 2,599 2,798 2,713
25,000
25,000 25,050 2,804 2,605 2,804 2,719
25,050 25,100 2,810 2,611 2,810 2,725
25,100 25,150 2,816 2,617 2,816 2,731
25,150 25,200 2,822 2,623 2,822 2,737
25,200 25,250 2,828 2,629 2,828 2,743
25,250 25,300 2,834 2,635 2,834 2,749
25,300 25,350 2,840 2,641 2,840 2,755
25,350 25,400 2,846 2,647 2,846 2,761
25,400 25,450 2,852 2,653 2,852 2,767
25,450 25,500 2,858 2,659 2,858 2,773
25,500 25,550 2,864 2,665 2,864 2,779
25,550 25,600 2,870 2,671 2,870 2,785
25,600 25,650 2,876 2,677 2,876 2,791
25,650 25,700 2,882 2,683 2,882 2,797
25,700 25,750 2,888 2,689 2,888 2,803
25,750 25,800 2,894 2,695 2,894 2,809
25,800 25,850 2,900 2,701 2,900 2,815
25,850 25,900 2,906 2,707 2,906 2,821
25,900 25,950 2,912 2,713 2,912 2,827
25,950 26,000 2,918 2,719 2,918 2,833
26,000
26,000 26,050 2,924 2,725 2,924 2,839
26,050 26,100 2,930 2,731 2,930 2,845
26,100 26,150 2,936 2,737 2,936 2,851
26,150 26,200 2,942 2,743 2,942 2,857
26,200 26,250 2,948 2,749 2,948 2,863
26,250 26,300 2,954 2,755 2,954 2,869
26,300 26,350 2,960 2,761 2,960 2,875
26,350 26,400 2,966 2,767 2,966 2,881
26,400 26,450 2,972 2,773 2,972 2,887
26,450 26,500 2,978 2,779 2,978 2,893
26,500 26,550 2,984 2,785 2,984 2,899
26,550 26,600 2,990 2,791 2,990 2,905
26,600 26,650 2,996 2,797 2,996 2,911
26,650 26,700 3,002 2,803 3,002 2,917
26,700 26,750 3,008 2,809 3,008 2,923
26,750 26,800 3,014 2,815 3,014 2,929
26,800 26,850 3,020 2,821 3,020 2,935
26,850 26,900 3,026 2,827 3,026 2,941
26,900 26,950 3,032 2,833 3,032 2,947
26,950 27,000 3,038 2,839 3,038 2,953
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
27,000
27,000 27,050 3,044 2,845 3,044 2,959
27,050 27,100 3,050 2,851 3,050 2,965
27,100 27,150 3,056 2,857 3,056 2,971
27,150 27,200 3,062 2,863 3,062 2,977
27,200 27,250 3,068 2,869 3,068 2,983
27,250 27,300 3,074 2,875 3,074 2,989
27,300 27,350 3,080 2,881 3,080 2,995
27,350 27,400 3,086 2,887 3,086 3,001
27,400 27,450 3,092 2,893 3,092 3,007
27,450 27,500 3,098 2,899 3,098 3,013
27,500 27,550 3,104 2,905 3,104 3,019
27,550 27,600 3,110 2,911 3,110 3,025
27,600 27,650 3,116 2,917 3,116 3,031
27,650 27,700 3,122 2,923 3,122 3,037
27,700 27,750 3,128 2,929 3,128 3,043
27,750 27,800 3,134 2,935 3,134 3,049
27,800 27,850 3,140 2,941 3,140 3,055
27,850 27,900 3,146 2,947 3,146 3,061
27,900 27,950 3,152 2,953 3,152 3,067
27,950 28,000 3,158 2,959 3,158 3,073
28,000
28,000 28,050 3,164 2,965 3,164 3,079
28,050 28,100 3,170 2,971 3,170 3,085
28,100 28,150 3,176 2,977 3,176 3,091
28,150 28,200 3,182 2,983 3,182 3,097
28,200 28,250 3,188 2,989 3,188 3,103
28,250 28,300 3,194 2,995 3,194 3,109
28,300 28,350 3,200 3,001 3,200 3,115
28,350 28,400 3,206 3,007 3,206 3,121
28,400 28,450 3,212 3,013 3,212 3,127
28,450 28,500 3,218 3,019 3,218 3,133
28,500 28,550 3,224 3,025 3,224 3,139
28,550 28,600 3,230 3,031 3,230 3,145
28,600 28,650 3,236 3,037 3,236 3,151
28,650 28,700 3,242 3,043 3,242 3,157
28,700 28,750 3,248 3,049 3,248 3,163
28,750 28,800 3,254 3,055 3,254 3,169
28,800 28,850 3,260 3,061 3,260 3,175
28,850 28,900 3,266 3,067 3,266 3,181
28,900 28,950 3,272 3,073 3,272 3,187
28,950 29,000 3,278 3,079 3,278 3,193
29,000
29,000 29,050 3,284 3,085 3,284 3,199
29,050 29,100 3,290 3,091 3,290 3,205
29,100 29,150 3,296 3,097 3,296 3,211
29,150 29,200 3,302 3,103 3,302 3,217
29,200 29,250 3,308 3,109 3,308 3,223
29,250 29,300 3,314 3,115 3,314 3,229
29,300 29,350 3,320 3,121 3,320 3,235
29,350 29,400 3,326 3,127 3,326 3,241
29,400 29,450 3,332 3,133 3,332 3,247
29,450 29,500 3,338 3,139 3,338 3,253
29,500 29,550 3,344 3,145 3,344 3,259
29,550 29,600 3,350 3,151 3,350 3,265
29,600 29,650 3,356 3,157 3,356 3,271
29,650 29,700 3,362 3,163 3,362 3,277
29,700 29,750 3,368 3,169 3,368 3,283
29,750 29,800 3,374 3,175 3,374 3,289
29,800 29,850 3,380 3,181 3,380 3,295
29,850 29,900 3,386 3,187 3,386 3,301
29,900 29,950 3,392 3,193 3,392 3,307
29,950 30,000 3,398 3,199 3,398 3,313
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
30,000
30,000 30,050 3,404 3,205 3,404 3,319
30,050 30,100 3,410 3,211 3,410 3,325
30,100 30,150 3,416 3,217 3,416 3,331
30,150 30,200 3,422 3,223 3,422 3,337
30,200 30,250 3,428 3,229 3,428 3,343
30,250 30,300 3,434 3,235 3,434 3,349
30,300 30,350 3,440 3,241 3,440 3,355
30,350 30,400 3,446 3,247 3,446 3,361
30,400 30,450 3,452 3,253 3,452 3,367
30,450 30,500 3,458 3,259 3,458 3,373
30,500 30,550 3,464 3,265 3,464 3,379
30,550 30,600 3,470 3,271 3,470 3,385
30,600 30,650 3,476 3,277 3,476 3,391
30,650 30,700 3,482 3,283 3,482 3,397
30,700 30,750 3,488 3,289 3,488 3,403
30,750 30,800 3,494 3,295 3,494 3,409
30,800 30,850 3,500 3,301 3,500 3,415
30,850 30,900 3,506 3,307 3,506 3,421
30,900 30,950 3,512 3,313 3,512 3,427
30,950 31,000 3,518 3,319 3,518 3,433
31,000
31,000 31,050 3,524 3,325 3,524 3,439
31,050 31,100 3,530 3,331 3,530 3,445
31,100 31,150 3,536 3,337 3,536 3,451
31,150 31,200 3,542 3,343 3,542 3,457
31,200 31,250 3,548 3,349 3,548 3,463
31,250 31,300 3,554 3,355 3,554 3,469
31,300 31,350 3,560 3,361 3,560 3,475
31,350 31,400 3,566 3,367 3,566 3,481
31,400 31,450 3,572 3,373 3,572 3,487
31,450 31,500 3,578 3,379 3,578 3,493
31,500 31,550 3,584 3,385 3,584 3,499
31,550 31,600 3,590 3,391 3,590 3,505
31,600 31,650 3,596 3,397 3,596 3,511
31,650 31,700 3,602 3,403 3,602 3,517
31,700 31,750 3,608 3,409 3,608 3,523
31,750 31,800 3,614 3,415 3,614 3,529
31,800 31,850 3,620 3,421 3,620 3,535
31,850 31,900 3,626 3,427 3,626 3,541
31,900 31,950 3,632 3,433 3,632 3,547
31,950 32,000 3,638 3,439 3,638 3,553
32,000
32,000 32,050 3,644 3,445 3,644 3,559
32,050 32,100 3,650 3,451 3,650 3,565
32,100 32,150 3,656 3,457 3,656 3,571
32,150 32,200 3,662 3,463 3,662 3,577
32,200 32,250 3,668 3,469 3,668 3,583
32,250 32,300 3,674 3,475 3,674 3,589
32,300 32,350 3,680 3,481 3,680 3,595
32,350 32,400 3,686 3,487 3,686 3,601
32,400 32,450 3,692 3,493 3,692 3,607
32,450 32,500 3,698 3,499 3,698 3,613
32,500 32,550 3,704 3,505 3,704 3,619
32,550 32,600 3,710 3,511 3,710 3,625
32,600 32,650 3,716 3,517 3,716 3,631
32,650 32,700 3,722 3,523 3,722 3,637
32,700 32,750 3,728 3,529 3,728 3,643
32,750 32,800 3,734 3,535 3,734 3,649
32,800 32,850 3,740 3,541 3,740 3,655
32,850 32,900 3,746 3,547 3,746 3,661
32,900 32,950 3,752 3,553 3,752 3,667
32,950 33,000 3,758 3,559 3,758 3,673
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
33,000
33,000 33,050 3,764 3,565 3,764 3,679
33,050 33,100 3,770 3,571 3,770 3,685
33,100 33,150 3,776 3,577 3,776 3,691
33,150 33,200 3,782 3,583 3,782 3,697
33,200 33,250 3,788 3,589 3,788 3,703
33,250 33,300 3,794 3,595 3,794 3,709
33,300 33,350 3,800 3,601 3,800 3,715
33,350 33,400 3,806 3,607 3,806 3,721
33,400 33,450 3,812 3,613 3,812 3,727
33,450 33,500 3,818 3,619 3,818 3,733
33,500 33,550 3,824 3,625 3,824 3,739
33,550 33,600 3,830 3,631 3,830 3,745
33,600 33,650 3,836 3,637 3,836 3,751
33,650 33,700 3,842 3,643 3,842 3,757
33,700 33,750 3,848 3,649 3,848 3,763
33,750 33,800 3,854 3,655 3,854 3,769
33,800 33,850 3,860 3,661 3,860 3,775
33,850 33,900 3,866 3,667 3,866 3,781
33,900 33,950 3,872 3,673 3,872 3,787
33,950 34,000 3,878 3,679 3,878 3,793
34,000
34,000 34,050 3,884 3,685 3,884 3,799
34,050 34,100 3,890 3,691 3,890 3,805
34,100 34,150 3,896 3,697 3,896 3,811
34,150 34,200 3,902 3,703 3,902 3,817
34,200 34,250 3,908 3,709 3,908 3,823
34,250 34,300 3,914 3,715 3,914 3,829
34,300 34,350 3,920 3,721 3,920 3,835
34,350 34,400 3,926 3,727 3,926 3,841
34,400 34,450 3,932 3,733 3,932 3,847
34,450 34,500 3,938 3,739 3,938 3,853
34,500 34,550 3,944 3,745 3,944 3,859
34,550 34,600 3,950 3,751 3,950 3,865
34,600 34,650 3,956 3,757 3,956 3,871
34,650 34,700 3,962 3,763 3,962 3,877
34,700 34,750 3,968 3,769 3,968 3,883
34,750 34,800 3,974 3,775 3,974 3,889
34,800 34,850 3,980 3,781 3,980 3,895
34,850 34,900 3,986 3,787 3,986 3,901
34,900 34,950 3,992 3,793 3,992 3,907
34,950 35,000 3,998 3,799 3,998 3,913
35,000
35,000 35,050 4,004 3,805 4,004 3,919
35,050 35,100 4,010 3,811 4,010 3,925
35,100 35,150 4,016 3,817 4,016 3,931
35,150 35,200 4,022 3,823 4,022 3,937
35,200 35,250 4,028 3,829 4,028 3,943
35,250 35,300 4,034 3,835 4,034 3,949
35,300 35,350 4,040 3,841 4,040 3,955
35,350 35,400 4,046 3,847 4,046 3,961
35,400 35,450 4,052 3,853 4,052 3,967
35,450 35,500 4,058 3,859 4,058 3,973
35,500 35,550 4,064 3,865 4,064 3,979
35,550 35,600 4,070 3,871 4,070 3,985
35,600 35,650 4,076 3,877 4,076 3,991
35,650 35,700 4,082 3,883 4,082 3,997
35,700 35,750 4,088 3,889 4,088 4,003
35,750 35,800 4,094 3,895 4,094 4,009
35,800 35,850 4,100 3,901 4,100 4,015
35,850 35,900 4,106 3,907 4,106 4,021
35,900 35,950 4,112 3,913 4,112 4,027
35,950 36,000 4,118 3,919 4,118 4,033
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
36,000
36,000 36,050 4,124 3,925 4,124 4,039
36,050 36,100 4,130 3,931 4,130 4,045
36,100 36,150 4,136 3,937 4,136 4,051
36,150 36,200 4,142 3,943 4,142 4,057
36,200 36,250 4,148 3,949 4,148 4,063
36,250 36,300 4,154 3,955 4,154 4,069
36,300 36,350 4,160 3,961 4,160 4,075
36,350 36,400 4,166 3,967 4,166 4,081
36,400 36,450 4,172 3,973 4,172 4,087
36,450 36,500 4,178 3,979 4,178 4,093
36,500 36,550 4,184 3,985 4,184 4,099
36,550 36,600 4,190 3,991 4,190 4,105
36,600 36,650 4,196 3,997 4,196 4,111
36,650 36,700 4,202 4,003 4,202 4,117
36,700 36,750 4,208 4,009 4,208 4,123
36,750 36,800 4,214 4,015 4,214 4,129
36,800 36,850 4,220 4,021 4,220 4,135
36,850 36,900 4,226 4,027 4,226 4,141
36,900 36,950 4,232 4,033 4,232 4,147
36,950 37,000 4,238 4,039 4,238 4,153
37,000
37,000 37,050 4,244 4,045 4,244 4,159
37,050 37,100 4,250 4,051 4,250 4,165
37,100 37,150 4,256 4,057 4,256 4,171
37,150 37,200 4,262 4,063 4,262 4,177
37,200 37,250 4,268 4,069 4,268 4,183
37,250 37,300 4,274 4,075 4,274 4,189
37,300 37,350 4,280 4,081 4,280 4,195
37,350 37,400 4,286 4,087 4,286 4,201
37,400 37,450 4,292 4,093 4,292 4,207
37,450 37,500 4,298 4,099 4,298 4,213
37,500 37,550 4,304 4,105 4,304 4,219
37,550 37,600 4,310 4,111 4,310 4,225
37,600 37,650 4,316 4,117 4,316 4,231
37,650 37,700 4,322 4,123 4,322 4,237
37,700 37,750 4,328 4,129 4,328 4,243
37,750 37,800 4,334 4,135 4,334 4,249
37,800 37,850 4,340 4,141 4,340 4,255
37,850 37,900 4,346 4,147 4,346 4,261
37,900 37,950 4,352 4,153 4,352 4,267
37,950 38,000 4,358 4,159 4,358 4,273
38,000
38,000 38,050 4,364 4,165 4,364 4,279
38,050 38,100 4,370 4,171 4,370 4,285
38,100 38,150 4,376 4,177 4,376 4,291
38,150 38,200 4,382 4,183 4,382 4,297
38,200 38,250 4,388 4,189 4,388 4,303
38,250 38,300 4,394 4,195 4,394 4,309
38,300 38,350 4,400 4,201 4,400 4,315
38,350 38,400 4,406 4,207 4,406 4,321
38,400 38,450 4,412 4,213 4,412 4,327
38,450 38,500 4,418 4,219 4,418 4,333
38,500 38,550 4,424 4,225 4,424 4,339
38,550 38,600 4,430 4,231 4,430 4,345
38,600 38,650 4,436 4,237 4,436 4,351
38,650 38,700 4,442 4,243 4,442 4,357
38,700 38,750 4,448 4,249 4,448 4,363
38,750 38,800 4,454 4,255 4,454 4,369
38,800 38,850 4,460 4,261 4,460 4,375
38,850 38,900 4,466 4,267 4,466 4,381
38,900 38,950 4,472 4,273 4,472 4,387
38,950 39,000 4,478 4,279 4,478 4,393
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
39,000
39,000 39,050 4,484 4,285 4,484 4,399
39,050 39,100 4,490 4,291 4,490 4,405
39,100 39,150 4,496 4,297 4,496 4,411
39,150 39,200 4,502 4,303 4,502 4,417
39,200 39,250 4,508 4,309 4,508 4,423
39,250 39,300 4,514 4,315 4,514 4,429
39,300 39,350 4,520 4,321 4,520 4,435
39,350 39,400 4,526 4,327 4,526 4,441
39,400 39,450 4,532 4,333 4,532 4,447
39,450 39,500 4,538 4,339 4,538 4,453
39,500 39,550 4,544 4,345 4,544 4,459
39,550 39,600 4,550 4,351 4,550 4,465
39,600 39,650 4,556 4,357 4,556 4,471
39,650 39,700 4,562 4,363 4,562 4,477
39,700 39,750 4,568 4,369 4,568 4,483
39,750 39,800 4,574 4,375 4,574 4,489
39,800 39,850 4,580 4,381 4,580 4,495
39,850 39,900 4,586 4,387 4,586 4,501
39,900 39,950 4,592 4,393 4,592 4,507
39,950 40,000 4,598 4,399 4,598 4,513
40,000
40,000 40,050 4,604 4,405 4,604 4,519
40,050 40,100 4,610 4,411 4,610 4,525
40,100 40,150 4,616 4,417 4,616 4,531
40,150 40,200 4,622 4,423 4,622 4,537
40,200 40,250 4,628 4,429 4,628 4,543
40,250 40,300 4,634 4,435 4,634 4,549
40,300 40,350 4,640 4,441 4,640 4,555
40,350 40,400 4,646 4,447 4,646 4,561
40,400 40,450 4,652 4,453 4,652 4,567
40,450 40,500 4,658 4,459 4,658 4,573
40,500 40,550 4,664 4,465 4,664 4,579
40,550 40,600 4,675 4,471 4,675 4,585
40,600 40,650 4,686 4,477 4,686 4,591
40,650 40,700 4,697 4,483 4,697 4,597
40,700 40,750 4,708 4,489 4,708 4,603
40,750 40,800 4,719 4,495 4,719 4,609
40,800 40,850 4,730 4,501 4,730 4,615
40,850 40,900 4,741 4,507 4,741 4,621
40,900 40,950 4,752 4,513 4,752 4,627
40,950 41,000 4,763 4,519 4,763 4,633
41,000
41,000 41,050 4,774 4,525 4,774 4,639
41,050 41,100 4,785 4,531 4,785 4,645
41,100 41,150 4,796 4,537 4,796 4,651
41,150 41,200 4,807 4,543 4,807 4,657
41,200 41,250 4,818 4,549 4,818 4,663
41,250 41,300 4,829 4,555 4,829 4,669
41,300 41,350 4,840 4,561 4,840 4,675
41,350 41,400 4,851 4,567 4,851 4,681
41,400 41,450 4,862 4,573 4,862 4,687
41,450 41,500 4,873 4,579 4,873 4,693
41,500 41,550 4,884 4,585 4,884 4,699
41,550 41,600 4,895 4,591 4,895 4,705
41,600 41,650 4,906 4,597 4,906 4,711
41,650 41,700 4,917 4,603 4,917 4,717
41,700 41,750 4,928 4,609 4,928 4,723
41,750 41,800 4,939 4,615 4,939 4,729
41,800 41,850 4,950 4,621 4,950 4,735
41,850 41,900 4,961 4,627 4,961 4,741
41,900 41,950 4,972 4,633 4,972 4,747
41,950 42,000 4,983 4,639 4,983 4,753
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
42,000
42,000 42,050 4,994 4,645 4,994 4,759
42,050 42,100 5,005 4,651 5,005 4,765
42,100 42,150 5,016 4,657 5,016 4,771
42,150 42,200 5,027 4,663 5,027 4,777
42,200 42,250 5,038 4,669 5,038 4,783
42,250 42,300 5,049 4,675 5,049 4,789
42,300 42,350 5,060 4,681 5,060 4,795
42,350 42,400 5,071 4,687 5,071 4,801
42,400 42,450 5,082 4,693 5,082 4,807
42,450 42,500 5,093 4,699 5,093 4,813
42,500 42,550 5,104 4,705 5,104 4,819
42,550 42,600 5,115 4,711 5,115 4,825
42,600 42,650 5,126 4,717 5,126 4,831
42,650 42,700 5,137 4,723 5,137 4,837
42,700 42,750 5,148 4,729 5,148 4,843
42,750 42,800 5,159 4,735 5,159 4,849
42,800 42,850 5,170 4,741 5,170 4,855
42,850 42,900 5,181 4,747 5,181 4,861
42,900 42,950 5,192 4,753 5,192 4,867
42,950 43,000 5,203 4,759 5,203 4,873
43,000
43,000 43,050 5,214 4,765 5,214 4,879
43,050 43,100 5,225 4,771 5,225 4,885
43,100 43,150 5,236 4,777 5,236 4,891
43,150 43,200 5,247 4,783 5,247 4,897
43,200 43,250 5,258 4,789 5,258 4,903
43,250 43,300 5,269 4,795 5,269 4,909
43,300 43,350 5,280 4,801 5,280 4,915
43,350 43,400 5,291 4,807 5,291 4,921
43,400 43,450 5,302 4,813 5,302 4,927
43,450 43,500 5,313 4,819 5,313 4,933
43,500 43,550 5,324 4,825 5,324 4,939
43,550 43,600 5,335 4,831 5,335 4,945
43,600 43,650 5,346 4,837 5,346 4,951
43,650 43,700 5,357 4,843 5,357 4,957
43,700 43,750 5,368 4,849 5,368 4,963
43,750 43,800 5,379 4,855 5,379 4,969
43,800 43,850 5,390 4,861 5,390 4,975
43,850 43,900 5,401 4,867 5,401 4,981
43,900 43,950 5,412 4,873 5,412 4,987
43,950 44,000 5,423 4,879 5,423 4,993
44,000
44,000 44,050 5,434 4,885 5,434 4,999
44,050 44,100 5,445 4,891 5,445 5,005
44,100 44,150 5,456 4,897 5,456 5,011
44,150 44,200 5,467 4,903 5,467 5,017
44,200 44,250 5,478 4,909 5,478 5,023
44,250 44,300 5,489 4,915 5,489 5,029
44,300 44,350 5,500 4,921 5,500 5,035
44,350 44,400 5,511 4,927 5,511 5,041
44,400 44,450 5,522 4,933 5,522 5,047
44,450 44,500 5,533 4,939 5,533 5,053
44,500 44,550 5,544 4,945 5,544 5,059
44,550 44,600 5,555 4,951 5,555 5,065
44,600 44,650 5,566 4,957 5,566 5,071
44,650 44,700 5,577 4,963 5,577 5,077
44,700 44,750 5,588 4,969 5,588 5,083
44,750 44,800 5,599 4,975 5,599 5,089
44,800 44,850 5,610 4,981 5,610 5,095
44,850 44,900 5,621 4,987 5,621 5,101
44,900 44,950 5,632 4,993 5,632 5,107
44,950 45,000 5,643 4,999 5,643 5,113
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
45,000
45,000 45,050 5,654 5,005 5,654 5,119
45,050 45,100 5,665 5,011 5,665 5,125
45,100 45,150 5,676 5,017 5,676 5,131
45,150 45,200 5,687 5,023 5,687 5,137
45,200 45,250 5,698 5,029 5,698 5,143
45,250 45,300 5,709 5,035 5,709 5,149
45,300 45,350 5,720 5,041 5,720 5,155
45,350 45,400 5,731 5,047 5,731 5,161
45,400 45,450 5,742 5,053 5,742 5,167
45,450 45,500 5,753 5,059 5,753 5,173
45,500 45,550 5,764 5,065 5,764 5,179
45,550 45,600 5,775 5,071 5,775 5,185
45,600 45,650 5,786 5,077 5,786 5,191
45,650 45,700 5,797 5,083 5,797 5,197
45,700 45,750 5,808 5,089 5,808 5,203
45,750 45,800 5,819 5,095 5,819 5,209
45,800 45,850 5,830 5,101 5,830 5,215
45,850 45,900 5,841 5,107 5,841 5,221
45,900 45,950 5,852 5,113 5,852 5,227
45,950 46,000 5,863 5,119 5,863 5,233
46,000
46,000 46,050 5,874 5,125 5,874 5,239
46,050 46,100 5,885 5,131 5,885 5,245
46,100 46,150 5,896 5,137 5,896 5,251
46,150 46,200 5,907 5,143 5,907 5,257
46,200 46,250 5,918 5,149 5,918 5,263
46,250 46,300 5,929 5,155 5,929 5,269
46,300 46,350 5,940 5,161 5,940 5,275
46,350 46,400 5,951 5,167 5,951 5,281
46,400 46,450 5,962 5,173 5,962 5,287
46,450 46,500 5,973 5,179 5,973 5,293
46,500 46,550 5,984 5,185 5,984 5,299
46,550 46,600 5,995 5,191 5,995 5,305
46,600 46,650 6,006 5,197 6,006 5,311
46,650 46,700 6,017 5,203 6,017 5,317
46,700 46,750 6,028 5,209 6,028 5,323
46,750 46,800 6,039 5,215 6,039 5,329
46,800 46,850 6,050 5,221 6,050 5,335
46,850 46,900 6,061 5,227 6,061 5,341
46,900 46,950 6,072 5,233 6,072 5,347
46,950 47,000 6,083 5,239 6,083 5,353
47,000
47,000 47,050 6,094 5,245 6,094 5,359
47,050 47,100 6,105 5,251 6,105 5,365
47,100 47,150 6,116 5,257 6,116 5,371
47,150 47,200 6,127 5,263 6,127 5,377
47,200 47,250 6,138 5,269 6,138 5,383
47,250 47,300 6,149 5,275 6,149 5,389
47,300 47,350 6,160 5,281 6,160 5,395
47,350 47,400 6,171 5,287 6,171 5,401
47,400 47,450 6,182 5,293 6,182 5,407
47,450 47,500 6,193 5,299 6,193 5,413
47,500 47,550 6,204 5,305 6,204 5,419
47,550 47,600 6,215 5,311 6,215 5,425
47,600 47,650 6,226 5,317 6,226 5,431
47,650 47,700 6,237 5,323 6,237 5,437
47,700 47,750 6,248 5,329 6,248 5,443
47,750 47,800 6,259 5,335 6,259 5,449
47,800 47,850 6,270 5,341 6,270 5,455
47,850 47,900 6,281 5,347 6,281 5,461
47,900 47,950 6,292 5,353 6,292 5,467
47,950 48,000 6,303 5,359 6,303 5,473
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
48,000
48,000 48,050 6,314 5,365 6,314 5,479
48,050 48,100 6,325 5,371 6,325 5,485
48,100 48,150 6,336 5,377 6,336 5,491
48,150 48,200 6,347 5,383 6,347 5,497
48,200 48,250 6,358 5,389 6,358 5,503
48,250 48,300 6,369 5,395 6,369 5,509
48,300 48,350 6,380 5,401 6,380 5,515
48,350 48,400 6,391 5,407 6,391 5,521
48,400 48,450 6,402 5,413 6,402 5,527
48,450 48,500 6,413 5,419 6,413 5,533
48,500 48,550 6,424 5,425 6,424 5,539
48,550 48,600 6,435 5,431 6,435 5,545
48,600 48,650 6,446 5,437 6,446 5,551
48,650 48,700 6,457 5,443 6,457 5,557
48,700 48,750 6,468 5,449 6,468 5,563
48,750 48,800 6,479 5,455 6,479 5,569
48,800 48,850 6,490 5,461 6,490 5,575
48,850 48,900 6,501 5,467 6,501 5,581
48,900 48,950 6,512 5,473 6,512 5,587
48,950 49,000 6,523 5,479 6,523 5,593
49,000
49,000 49,050 6,534 5,485 6,534 5,599
49,050 49,100 6,545 5,491 6,545 5,605
49,100 49,150 6,556 5,497 6,556 5,611
49,150 49,200 6,567 5,503 6,567 5,617
49,200 49,250 6,578 5,509 6,578 5,623
49,250 49,300 6,589 5,515 6,589 5,629
49,300 49,350 6,600 5,521 6,600 5,635
49,350 49,400 6,611 5,527 6,611 5,641
49,400 49,450 6,622 5,533 6,622 5,647
49,450 49,500 6,633 5,539 6,633 5,653
49,500 49,550 6,644 5,545 6,644 5,659
49,550 49,600 6,655 5,551 6,655 5,665
49,600 49,650 6,666 5,557 6,666 5,671
49,650 49,700 6,677 5,563 6,677 5,677
49,700 49,750 6,688 5,569 6,688 5,683
49,750 49,800 6,699 5,575 6,699 5,689
49,800 49,850 6,710 5,581 6,710 5,695
49,850 49,900 6,721 5,587 6,721 5,701
49,900 49,950 6,732 5,593 6,732 5,707
49,950 50,000 6,743 5,599 6,743 5,713
50,000
50,000 50,050 6,754 5,605 6,754 5,719
50,050 50,100 6,765 5,611 6,765 5,725
50,100 50,150 6,776 5,617 6,776 5,731
50,150 50,200 6,787 5,623 6,787 5,737
50,200 50,250 6,798 5,629 6,798 5,743
50,250 50,300 6,809 5,635 6,809 5,749
50,300 50,350 6,820 5,641 6,820 5,755
50,350 50,400 6,831 5,647 6,831 5,761
50,400 50,450 6,842 5,653 6,842 5,767
50,450 50,500 6,853 5,659 6,853 5,773
50,500 50,550 6,864 5,665 6,864 5,779
50,550 50,600 6,875 5,671 6,875 5,785
50,600 50,650 6,886 5,677 6,886 5,791
50,650 50,700 6,897 5,683 6,897 5,797
50,700 50,750 6,908 5,689 6,908 5,803
50,750 50,800 6,919 5,695 6,919 5,809
50,800 50,850 6,930 5,701 6,930 5,815
50,850 50,900 6,941 5,707 6,941 5,821
50,900 50,950 6,952 5,713 6,952 5,827
50,950 51,000 6,963 5,719 6,963 5,833
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
51,000
51,000 51,050 6,974 5,725 6,974 5,839
51,050 51,100 6,985 5,731 6,985 5,845
51,100 51,150 6,996 5,737 6,996 5,851
51,150 51,200 7,007 5,743 7,007 5,857
51,200 51,250 7,018 5,749 7,018 5,863
51,250 51,300 7,029 5,755 7,029 5,869
51,300 51,350 7,040 5,761 7,040 5,875
51,350 51,400 7,051 5,767 7,051 5,881
51,400 51,450 7,062 5,773 7,062 5,887
51,450 51,500 7,073 5,779 7,073 5,893
51,500 51,550 7,084 5,785 7,084 5,899
51,550 51,600 7,095 5,791 7,095 5,905
51,600 51,650 7,106 5,797 7,106 5,911
51,650 51,700 7,117 5,803 7,117 5,917
51,700 51,750 7,128 5,809 7,128 5,923
51,750 51,800 7,139 5,815 7,139 5,929
51,800 51,850 7,150 5,821 7,150 5,935
51,850 51,900 7,161 5,827 7,161 5,941
51,900 51,950 7,172 5,833 7,172 5,947
51,950 52,000 7,183 5,839 7,183 5,953
52,000
52,000 52,050 7,194 5,845 7,194 5,959
52,050 52,100 7,205 5,851 7,205 5,965
52,100 52,150 7,216 5,857 7,216 5,971
52,150 52,200 7,227 5,863 7,227 5,977
52,200 52,250 7,238 5,869 7,238 5,983
52,250 52,300 7,249 5,875 7,249 5,989
52,300 52,350 7,260 5,881 7,260 5,995
52,350 52,400 7,271 5,887 7,271 6,001
52,400 52,450 7,282 5,893 7,282 6,007
52,450 52,500 7,293 5,899 7,293 6,013
52,500 52,550 7,304 5,905 7,304 6,019
52,550 52,600 7,315 5,911 7,315 6,025
52,600 52,650 7,326 5,917 7,326 6,031
52,650 52,700 7,337 5,923 7,337 6,037
52,700 52,750 7,348 5,929 7,348 6,043
52,750 52,800 7,359 5,935 7,359 6,049
52,800 52,850 7,370 5,941 7,370 6,055
52,850 52,900 7,381 5,947 7,381 6,061
52,900 52,950 7,392 5,953 7,392 6,067
52,950 53,000 7,403 5,959 7,403 6,073
53,000
53,000 53,050 7,414 5,965 7,414 6,079
53,050 53,100 7,425 5,971 7,425 6,085
53,100 53,150 7,436 5,977 7,436 6,091
53,150 53,200 7,447 5,983 7,447 6,097
53,200 53,250 7,458 5,989 7,458 6,103
53,250 53,300 7,469 5,995 7,469 6,109
53,300 53,350 7,480 6,001 7,480 6,115
53,350 53,400 7,491 6,007 7,491 6,121
53,400 53,450 7,502 6,013 7,502 6,127
53,450 53,500 7,513 6,019 7,513 6,133
53,500 53,550 7,524 6,025 7,524 6,139
53,550 53,600 7,535 6,031 7,535 6,145
53,600 53,650 7,546 6,037 7,546 6,151
53,650 53,700 7,557 6,043 7,557 6,157
53,700 53,750 7,568 6,049 7,568 6,163
53,750 53,800 7,579 6,055 7,579 6,169
53,800 53,850 7,590 6,061 7,590 6,175
53,850 53,900 7,601 6,067 7,601 6,181
53,900 53,950 7,612 6,073 7,612 6,187
53,950 54,000 7,623 6,079 7,623 6,193
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
54,000
54,000 54,050 7,634 6,085 7,634 6,199
54,050 54,100 7,645 6,091 7,645 6,205
54,100 54,150 7,656 6,097 7,656 6,211
54,150 54,200 7,667 6,103 7,667 6,217
54,200 54,250 7,678 6,109 7,678 6,226
54,250 54,300 7,689 6,115 7,689 6,237
54,300 54,350 7,700 6,121 7,700 6,248
54,350 54,400 7,711 6,127 7,711 6,259
54,400 54,450 7,722 6,133 7,722 6,270
54,450 54,500 7,733 6,139 7,733 6,281
54,500 54,550 7,744 6,145 7,744 6,292
54,550 54,600 7,755 6,151 7,755 6,303
54,600 54,650 7,766 6,157 7,766 6,314
54,650 54,700 7,777 6,163 7,777 6,325
54,700 54,750 7,788 6,169 7,788 6,336
54,750 54,800 7,799 6,175 7,799 6,347
54,800 54,850 7,810 6,181 7,810 6,358
54,850 54,900 7,821 6,187 7,821 6,369
54,900 54,950 7,832 6,193 7,832 6,380
54,950 55,000 7,843 6,199 7,843 6,391
55,000
55,000 55,050 7,854 6,205 7,854 6,402
55,050 55,100 7,865 6,211 7,865 6,413
55,100 55,150 7,876 6,217 7,876 6,424
55,150 55,200 7,887 6,223 7,887 6,435
55,200 55,250 7,898 6,229 7,898 6,446
55,250 55,300 7,909 6,235 7,909 6,457
55,300 55,350 7,920 6,241 7,920 6,468
55,350 55,400 7,931 6,247 7,931 6,479
55,400 55,450 7,942 6,253 7,942 6,490
55,450 55,500 7,953 6,259 7,953 6,501
55,500 55,550 7,964 6,265 7,964 6,512
55,550 55,600 7,975 6,271 7,975 6,523
55,600 55,650 7,986 6,277 7,986 6,534
55,650 55,700 7,997 6,283 7,997 6,545
55,700 55,750 8,008 6,289 8,008 6,556
55,750 55,800 8,019 6,295 8,019 6,567
55,800 55,850 8,030 6,301 8,030 6,578
55,850 55,900 8,041 6,307 8,041 6,589
55,900 55,950 8,052 6,313 8,052 6,600
55,950 56,000 8,063 6,319 8,063 6,611
56,000
56,000 56,050 8,074 6,325 8,074 6,622
56,050 56,100 8,085 6,331 8,085 6,633
56,100 56,150 8,096 6,337 8,096 6,644
56,150 56,200 8,107 6,343 8,107 6,655
56,200 56,250 8,118 6,349 8,118 6,666
56,250 56,300 8,129 6,355 8,129 6,677
56,300 56,350 8,140 6,361 8,140 6,688
56,350 56,400 8,151 6,367 8,151 6,699
56,400 56,450 8,162 6,373 8,162 6,710
56,450 56,500 8,173 6,379 8,173 6,721
56,500 56,550 8,184 6,385 8,184 6,732
56,550 56,600 8,195 6,391 8,195 6,743
56,600 56,650 8,206 6,397 8,206 6,754
56,650 56,700 8,217 6,403 8,217 6,765
56,700 56,750 8,228 6,409 8,228 6,776
56,750 56,800 8,239 6,415 8,239 6,787
56,800 56,850 8,250 6,421 8,250 6,798
56,850 56,900 8,261 6,427 8,261 6,809
56,900 56,950 8,272 6,433 8,272 6,820
56,950 57,000 8,283 6,439 8,283 6,831
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
57,000
57,000 57,050 8,294 6,445 8,294 6,842
57,050 57,100 8,305 6,451 8,305 6,853
57,100 57,150 8,316 6,457 8,316 6,864
57,150 57,200 8,327 6,463 8,327 6,875
57,200 57,250 8,338 6,469 8,338 6,886
57,250 57,300 8,349 6,475 8,349 6,897
57,300 57,350 8,360 6,481 8,360 6,908
57,350 57,400 8,371 6,487 8,371 6,919
57,400 57,450 8,382 6,493 8,382 6,930
57,450 57,500 8,393 6,499 8,393 6,941
57,500 57,550 8,404 6,505 8,404 6,952
57,550 57,600 8,415 6,511 8,415 6,963
57,600 57,650 8,426 6,517 8,426 6,974
57,650 57,700 8,437 6,523 8,437 6,985
57,700 57,750 8,448 6,529 8,448 6,996
57,750 57,800 8,459 6,535 8,459 7,007
57,800 57,850 8,470 6,541 8,470 7,018
57,850 57,900 8,481 6,547 8,481 7,029
57,900 57,950 8,492 6,553 8,492 7,040
57,950 58,000 8,503 6,559 8,503 7,051
58,000
58,000 58,050 8,514 6,565 8,514 7,062
58,050 58,100 8,525 6,571 8,525 7,073
58,100 58,150 8,536 6,577 8,536 7,084
58,150 58,200 8,547 6,583 8,547 7,095
58,200 58,250 8,558 6,589 8,558 7,106
58,250 58,300 8,569 6,595 8,569 7,117
58,300 58,350 8,580 6,601 8,580 7,128
58,350 58,400 8,591 6,607 8,591 7,139
58,400 58,450 8,602 6,613 8,602 7,150
58,450 58,500 8,613 6,619 8,613 7,161
58,500 58,550 8,624 6,625 8,624 7,172
58,550 58,600 8,635 6,631 8,635 7,183
58,600 58,650 8,646 6,637 8,646 7,194
58,650 58,700 8,657 6,643 8,657 7,205
58,700 58,750 8,668 6,649 8,668 7,216
58,750 58,800 8,679 6,655 8,679 7,227
58,800 58,850 8,690 6,661 8,690 7,238
58,850 58,900 8,701 6,667 8,701 7,249
58,900 58,950 8,712 6,673 8,712 7,260
58,950 59,000 8,723 6,679 8,723 7,271
59,000
59,000 59,050 8,734 6,685 8,734 7,282
59,050 59,100 8,745 6,691 8,745 7,293
59,100 59,150 8,756 6,697 8,756 7,304
59,150 59,200 8,767 6,703 8,767 7,315
59,200 59,250 8,778 6,709 8,778 7,326
59,250 59,300 8,789 6,715 8,789 7,337
59,300 59,350 8,800 6,721 8,800 7,348
59,350 59,400 8,811 6,727 8,811 7,359
59,400 59,450 8,822 6,733 8,822 7,370
59,450 59,500 8,833 6,739 8,833 7,381
59,500 59,550 8,844 6,745 8,844 7,392
59,550 59,600 8,855 6,751 8,855 7,403
59,600 59,650 8,866 6,757 8,866 7,414
59,650 59,700 8,877 6,763 8,877 7,425
59,700 59,750 8,888 6,769 8,888 7,436
59,750 59,800 8,899 6,775 8,899 7,447
59,800 59,850 8,910 6,781 8,910 7,458
59,850 59,900 8,921 6,787 8,921 7,469
59,900 59,950 8,932 6,793 8,932 7,480
59,950 60,000 8,943 6,799 8,943 7,491
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
60,000
60,000 60,050 8,954 6,805 8,954 7,502
60,050 60,100 8,965 6,811 8,965 7,513
60,100 60,150 8,976 6,817 8,976 7,524
60,150 60,200 8,987 6,823 8,987 7,535
60,200 60,250 8,998 6,829 8,998 7,546
60,250 60,300 9,009 6,835 9,009 7,557
60,300 60,350 9,020 6,841 9,020 7,568
60,350 60,400 9,031 6,847 9,031 7,579
60,400 60,450 9,042 6,853 9,042 7,590
60,450 60,500 9,053 6,859 9,053 7,601
60,500 60,550 9,064 6,865 9,064 7,612
60,550 60,600 9,075 6,871 9,075 7,623
60,600 60,650 9,086 6,877 9,086 7,634
60,650 60,700 9,097 6,883 9,097 7,645
60,700 60,750 9,108 6,889 9,108 7,656
60,750 60,800 9,119 6,895 9,119 7,667
60,800 60,850 9,130 6,901 9,130 7,678
60,850 60,900 9,141 6,907 9,141 7,689
60,900 60,950 9,152 6,913 9,152 7,700
60,950 61,000 9,163 6,919 9,163 7,711
61,000
61,000 61,050 9,174 6,925 9,174 7,722
61,050 61,100 9,185 6,931 9,185 7,733
61,100 61,150 9,196 6,937 9,196 7,744
61,150 61,200 9,207 6,943 9,207 7,755
61,200 61,250 9,218 6,949 9,218 7,766
61,250 61,300 9,229 6,955 9,229 7,777
61,300 61,350 9,240 6,961 9,240 7,788
61,350 61,400 9,251 6,967 9,251 7,799
61,400 61,450 9,262 6,973 9,262 7,810
61,450 61,500 9,273 6,979 9,273 7,821
61,500 61,550 9,284 6,985 9,284 7,832
61,550 61,600 9,295 6,991 9,295 7,843
61,600 61,650 9,306 6,997 9,306 7,854
61,650 61,700 9,317 7,003 9,317 7,865
61,700 61,750 9,328 7,009 9,328 7,876
61,750 61,800 9,339 7,015 9,339 7,887
61,800 61,850 9,350 7,021 9,350 7,898
61,850 61,900 9,361 7,027 9,361 7,909
61,900 61,950 9,372 7,033 9,372 7,920
61,950 62,000 9,383 7,039 9,383 7,931
62,000
62,000 62,050 9,394 7,045 9,394 7,942
62,050 62,100 9,405 7,051 9,405 7,953
62,100 62,150 9,416 7,057 9,416 7,964
62,150 62,200 9,427 7,063 9,427 7,975
62,200 62,250 9,438 7,069 9,438 7,986
62,250 62,300 9,449 7,075 9,449 7,997
62,300 62,350 9,460 7,081 9,460 8,008
62,350 62,400 9,471 7,087 9,471 8,019
62,400 62,450 9,482 7,093 9,482 8,030
62,450 62,500 9,493 7,099 9,493 8,041
62,500 62,550 9,504 7,105 9,504 8,052
62,550 62,600 9,515 7,111 9,515 8,063
62,600 62,650 9,526 7,117 9,526 8,074
62,650 62,700 9,537 7,123 9,537 8,085
62,700 62,750 9,548 7,129 9,548 8,096
62,750 62,800 9,559 7,135 9,559 8,107
62,800 62,850 9,570 7,141 9,570 8,118
62,850 62,900 9,581 7,147 9,581 8,129
62,900 62,950 9,592 7,153 9,592 8,140
62,950 63,000 9,603 7,159 9,603 8,151
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
63,000
63,000 63,050 9,614 7,165 9,614 8,162
63,050 63,100 9,625 7,171 9,625 8,173
63,100 63,150 9,636 7,177 9,636 8,184
63,150 63,200 9,647 7,183 9,647 8,195
63,200 63,250 9,658 7,189 9,658 8,206
63,250 63,300 9,669 7,195 9,669 8,217
63,300 63,350 9,680 7,201 9,680 8,228
63,350 63,400 9,691 7,207 9,691 8,239
63,400 63,450 9,702 7,213 9,702 8,250
63,450 63,500 9,713 7,219 9,713 8,261
63,500 63,550 9,724 7,225 9,724 8,272
63,550 63,600 9,735 7,231 9,735 8,283
63,600 63,650 9,746 7,237 9,746 8,294
63,650 63,700 9,757 7,243 9,757 8,305
63,700 63,750 9,768 7,249 9,768 8,316
63,750 63,800 9,779 7,255 9,779 8,327
63,800 63,850 9,790 7,261 9,790 8,338
63,850 63,900 9,801 7,267 9,801 8,349
63,900 63,950 9,812 7,273 9,812 8,360
63,950 64,000 9,823 7,279 9,823 8,371
64,000
64,000 64,050 9,834 7,285 9,834 8,382
64,050 64,100 9,845 7,291 9,845 8,393
64,100 64,150 9,856 7,297 9,856 8,404
64,150 64,200 9,867 7,303 9,867 8,415
64,200 64,250 9,878 7,309 9,878 8,426
64,250 64,300 9,889 7,315 9,889 8,437
64,300 64,350 9,900 7,321 9,900 8,448
64,350 64,400 9,911 7,327 9,911 8,459
64,400 64,450 9,922 7,333 9,922 8,470
64,450 64,500 9,933 7,339 9,933 8,481
64,500 64,550 9,944 7,345 9,944 8,492
64,550 64,600 9,955 7,351 9,955 8,503
64,600 64,650 9,966 7,357 9,966 8,514
64,650 64,700 9,977 7,363 9,977 8,525
64,700 64,750 9,988 7,369 9,988 8,536
64,750 64,800 9,999 7,375 9,999 8,547
64,800 64,850 10,010 7,381 10,010 8,558
64,850 64,900 10,021 7,387 10,021 8,569
64,900 64,950 10,032 7,393 10,032 8,580
64,950 65,000 10,043 7,399 10,043 8,591
65,000
65,000 65,050 10,054 7,405 10,054 8,602
65,050 65,100 10,065 7,411 10,065 8,613
65,100 65,150 10,076 7,417 10,076 8,624
65,150 65,200 10,087 7,423 10,087 8,635
65,200 65,250 10,098 7,429 10,098 8,646
65,250 65,300 10,109 7,435 10,109 8,657
65,300 65,350 10,120 7,441 10,120 8,668
65,350 65,400 10,131 7,447 10,131 8,679
65,400 65,450 10,142 7,453 10,142 8,690
65,450 65,500 10,153 7,459 10,153 8,701
65,500 65,550 10,164 7,465 10,164 8,712
65,550 65,600 10,175 7,471 10,175 8,723
65,600 65,650 10,186 7,477 10,186 8,734
65,650 65,700 10,197 7,483 10,197 8,745
65,700 65,750 10,208 7,489 10,208 8,756
65,750 65,800 10,219 7,495 10,219 8,767
65,800 65,850 10,230 7,501 10,230 8,778
65,850 65,900 10,241 7,507 10,241 8,789
65,900 65,950 10,252 7,513 10,252 8,800
65,950 66,000 10,263 7,519 10,263 8,811
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
66,000
66,000 66,050 10,274 7,525 10,274 8,822
66,050 66,100 10,285 7,531 10,285 8,833
66,100 66,150 10,296 7,537 10,296 8,844
66,150 66,200 10,307 7,543 10,307 8,855
66,200 66,250 10,318 7,549 10,318 8,866
66,250 66,300 10,329 7,555 10,329 8,877
66,300 66,350 10,340 7,561 10,340 8,888
66,350 66,400 10,351 7,567 10,351 8,899
66,400 66,450 10,362 7,573 10,362 8,910
66,450 66,500 10,373 7,579 10,373 8,921
66,500 66,550 10,384 7,585 10,384 8,932
66,550 66,600 10,395 7,591 10,395 8,943
66,600 66,650 10,406 7,597 10,406 8,954
66,650 66,700 10,417 7,603 10,417 8,965
66,700 66,750 10,428 7,609 10,428 8,976
66,750 66,800 10,439 7,615 10,439 8,987
66,800 66,850 10,450 7,621 10,450 8,998
66,850 66,900 10,461 7,627 10,461 9,009
66,900 66,950 10,472 7,633 10,472 9,020
66,950 67,000 10,483 7,639 10,483 9,031
67,000
67,000 67,050 10,494 7,645 10,494 9,042
67,050 67,100 10,505 7,651 10,505 9,053
67,100 67,150 10,516 7,657 10,516 9,064
67,150 67,200 10,527 7,663 10,527 9,075
67,200 67,250 10,538 7,669 10,538 9,086
67,250 67,300 10,549 7,675 10,549 9,097
67,300 67,350 10,560 7,681 10,560 9,108
67,350 67,400 10,571 7,687 10,571 9,119
67,400 67,450 10,582 7,693 10,582 9,130
67,450 67,500 10,593 7,699 10,593 9,141
67,500 67,550 10,604 7,705 10,604 9,152
67,550 67,600 10,615 7,711 10,615 9,163
67,600 67,650 10,626 7,717 10,626 9,174
67,650 67,700 10,637 7,723 10,637 9,185
67,700 67,750 10,648 7,729 10,648 9,196
67,750 67,800 10,659 7,735 10,659 9,207
67,800 67,850 10,670 7,741 10,670 9,218
67,850 67,900 10,681 7,747 10,681 9,229
67,900 67,950 10,692 7,753 10,692 9,240
67,950 68,000 10,703 7,759 10,703 9,251
68,000
68,000 68,050 10,714 7,765 10,714 9,262
68,050 68,100 10,725 7,771 10,725 9,273
68,100 68,150 10,736 7,777 10,736 9,284
68,150 68,200 10,747 7,783 10,747 9,295
68,200 68,250 10,758 7,789 10,758 9,306
68,250 68,300 10,769 7,795 10,769 9,317
68,300 68,350 10,780 7,801 10,780 9,328
68,350 68,400 10,791 7,807 10,791 9,339
68,400 68,450 10,802 7,813 10,802 9,350
68,450 68,500 10,813 7,819 10,813 9,361
68,500 68,550 10,824 7,825 10,824 9,372
68,550 68,600 10,835 7,831 10,835 9,383
68,600 68,650 10,846 7,837 10,846 9,394
68,650 68,700 10,857 7,843 10,857 9,405
68,700 68,750 10,868 7,849 10,868 9,416
68,750 68,800 10,879 7,855 10,879 9,427
68,800 68,850 10,890 7,861 10,890 9,438
68,850 68,900 10,901 7,867 10,901 9,449
68,900 68,950 10,912 7,873 10,912 9,460
68,950 69,000 10,923 7,879 10,923 9,471
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
69,000
69,000 69,050 10,934 7,885 10,934 9,482
69,050 69,100 10,945 7,891 10,945 9,493
69,100 69,150 10,956 7,897 10,956 9,504
69,150 69,200 10,967 7,903 10,967 9,515
69,200 69,250 10,978 7,909 10,978 9,526
69,250 69,300 10,989 7,915 10,989 9,537
69,300 69,350 11,000 7,921 11,000 9,548
69,350 69,400 11,011 7,927 11,011 9,559
69,400 69,450 11,022 7,933 11,022 9,570
69,450 69,500 11,033 7,939 11,033 9,581
69,500 69,550 11,044 7,945 11,044 9,592
69,550 69,600 11,055 7,951 11,055 9,603
69,600 69,650 11,066 7,957 11,066 9,614
69,650 69,700 11,077 7,963 11,077 9,625
69,700 69,750 11,088 7,969 11,088 9,636
69,750 69,800 11,099 7,975 11,099 9,647
69,800 69,850 11,110 7,981 11,110 9,658
69,850 69,900 11,121 7,987 11,121 9,669
69,900 69,950 11,132 7,993 11,132 9,680
69,950 70,000 11,143 7,999 11,143 9,691
70,000
70,000 70,050 11,154 8,005 11,154 9,702
70,050 70,100 11,165 8,011 11,165 9,713
70,100 70,150 11,176 8,017 11,176 9,724
70,150 70,200 11,187 8,023 11,187 9,735
70,200 70,250 11,198 8,029 11,198 9,746
70,250 70,300 11,209 8,035 11,209 9,757
70,300 70,350 11,220 8,041 11,220 9,768
70,350 70,400 11,231 8,047 11,231 9,779
70,400 70,450 11,242 8,053 11,242 9,790
70,450 70,500 11,253 8,059 11,253 9,801
70,500 70,550 11,264 8,065 11,264 9,812
70,550 70,600 11,275 8,071 11,275 9,823
70,600 70,650 11,286 8,077 11,286 9,834
70,650 70,700 11,297 8,083 11,297 9,845
70,700 70,750 11,308 8,089 11,308 9,856
70,750 70,800 11,319 8,095 11,319 9,867
70,800 70,850 11,330 8,101 11,330 9,878
70,850 70,900 11,341 8,107 11,341 9,889
70,900 70,950 11,352 8,113 11,352 9,900
70,950 71,000 11,363 8,119 11,363 9,911
71,000
71,000 71,050 11,374 8,125 11,374 9,922
71,050 71,100 11,385 8,131 11,385 9,933
71,100 71,150 11,396 8,137 11,396 9,944
71,150 71,200 11,407 8,143 11,407 9,955
71,200 71,250 11,418 8,149 11,418 9,966
71,250 71,300 11,429 8,155 11,429 9,977
71,300 71,350 11,440 8,161 11,440 9,988
71,350 71,400 11,451 8,167 11,451 9,999
71,400 71,450 11,462 8,173 11,462 10,010
71,450 71,500 11,473 8,179 11,473 10,021
71,500 71,550 11,484 8,185 11,484 10,032
71,550 71,600 11,495 8,191 11,495 10,043
71,600 71,650 11,506 8,197 11,506 10,054
71,650 71,700 11,517 8,203 11,517 10,065
71,700 71,750 11,528 8,209 11,528 10,076
71,750 71,800 11,539 8,215 11,539 10,087
71,800 71,850 11,550 8,221 11,550 10,098
71,850 71,900 11,561 8,227 11,561 10,109
71,900 71,950 11,572 8,233 11,572 10,120
71,950 72,000 11,583 8,239 11,583 10,131
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
72,000
72,000 72,050 11,594 8,245 11,594 10,142
72,050 72,100 11,605 8,251 11,605 10,153
72,100 72,150 11,616 8,257 11,616 10,164
72,150 72,200 11,627 8,263 11,627 10,175
72,200 72,250 11,638 8,269 11,638 10,186
72,250 72,300 11,649 8,275 11,649 10,197
72,300 72,350 11,660 8,281 11,660 10,208
72,350 72,400 11,671 8,287 11,671 10,219
72,400 72,450 11,682 8,293 11,682 10,230
72,450 72,500 11,693 8,299 11,693 10,241
72,500 72,550 11,704 8,305 11,704 10,252
72,550 72,600 11,715 8,311 11,715 10,263
72,600 72,650 11,726 8,317 11,726 10,274
72,650 72,700 11,737 8,323 11,737 10,285
72,700 72,750 11,748 8,329 11,748 10,296
72,750 72,800 11,759 8,335 11,759 10,307
72,800 72,850 11,770 8,341 11,770 10,318
72,850 72,900 11,781 8,347 11,781 10,329
72,900 72,950 11,792 8,353 11,792 10,340
72,950 73,000 11,803 8,359 11,803 10,351
73,000
73,000 73,050 11,814 8,365 11,814 10,362
73,050 73,100 11,825 8,371 11,825 10,373
73,100 73,150 11,836 8,377 11,836 10,384
73,150 73,200 11,847 8,383 11,847 10,395
73,200 73,250 11,858 8,389 11,858 10,406
73,250 73,300 11,869 8,395 11,869 10,417
73,300 73,350 11,880 8,401 11,880 10,428
73,350 73,400 11,891 8,407 11,891 10,439
73,400 73,450 11,902 8,413 11,902 10,450
73,450 73,500 11,913 8,419 11,913 10,461
73,500 73,550 11,924 8,425 11,924 10,472
73,550 73,600 11,935 8,431 11,935 10,483
73,600 73,650 11,946 8,437 11,946 10,494
73,650 73,700 11,957 8,443 11,957 10,505
73,700 73,750 11,968 8,449 11,968 10,516
73,750 73,800 11,979 8,455 11,979 10,527
73,800 73,850 11,990 8,461 11,990 10,538
73,850 73,900 12,001 8,467 12,001 10,549
73,900 73,950 12,012 8,473 12,012 10,560
73,950 74,000 12,023 8,479 12,023 10,571
74,000
74,000 74,050 12,034 8,485 12,034 10,582
74,050 74,100 12,045 8,491 12,045 10,593
74,100 74,150 12,056 8,497 12,056 10,604
74,150 74,200 12,067 8,503 12,067 10,615
74,200 74,250 12,078 8,509 12,078 10,626
74,250 74,300 12,089 8,515 12,089 10,637
74,300 74,350 12,100 8,521 12,100 10,648
74,350 74,400 12,111 8,527 12,111 10,659
74,400 74,450 12,122 8,533 12,122 10,670
74,450 74,500 12,133 8,539 12,133 10,681
74,500 74,550 12,144 8,545 12,144 10,692
74,550 74,600 12,155 8,551 12,155 10,703
74,600 74,650 12,166 8,557 12,166 10,714
74,650 74,700 12,177 8,563 12,177 10,725
74,700 74,750 12,188 8,569 12,188 10,736
74,750 74,800 12,199 8,575 12,199 10,747
74,800 74,850 12,210 8,581 12,210 10,758
74,850 74,900 12,221 8,587 12,221 10,769
74,900 74,950 12,232 8,593 12,232 10,780
74,950 75,000 12,243 8,599 12,243 10,791
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
75,000
75,000 75,050 12,254 8,605 12,254 10,802
75,050 75,100 12,265 8,611 12,265 10,813
75,100 75,150 12,276 8,617 12,276 10,824
75,150 75,200 12,287 8,623 12,287 10,835
75,200 75,250 12,298 8,629 12,298 10,846
75,250 75,300 12,309 8,635 12,309 10,857
75,300 75,350 12,320 8,641 12,320 10,868
75,350 75,400 12,331 8,647 12,331 10,879
75,400 75,450 12,342 8,653 12,342 10,890
75,450 75,500 12,353 8,659 12,353 10,901
75,500 75,550 12,364 8,665 12,364 10,912
75,550 75,600 12,375 8,671 12,375 10,923
75,600 75,650 12,386 8,677 12,386 10,934
75,650 75,700 12,397 8,683 12,397 10,945
75,700 75,750 12,408 8,689 12,408 10,956
75,750 75,800 12,419 8,695 12,419 10,967
75,800 75,850 12,430 8,701 12,430 10,978
75,850 75,900 12,441 8,707 12,441 10,989
75,900 75,950 12,452 8,713 12,452 11,000
75,950 76,000 12,463 8,719 12,463 11,011
76,000
76,000 76,050 12,474 8,725 12,474 11,022
76,050 76,100 12,485 8,731 12,485 11,033
76,100 76,150 12,496 8,737 12,496 11,044
76,150 76,200 12,507 8,743 12,507 11,055
76,200 76,250 12,518 8,749 12,518 11,066
76,250 76,300 12,529 8,755 12,529 11,077
76,300 76,350 12,540 8,761 12,540 11,088
76,350 76,400 12,551 8,767 12,551 11,099
76,400 76,450 12,562 8,773 12,562 11,110
76,450 76,500 12,573 8,779 12,573 11,121
76,500 76,550 12,584 8,785 12,584 11,132
76,550 76,600 12,595 8,791 12,595 11,143
76,600 76,650 12,606 8,797 12,606 11,154
76,650 76,700 12,617 8,803 12,617 11,165
76,700 76,750 12,628 8,809 12,628 11,176
76,750 76,800 12,639 8,815 12,639 11,187
76,800 76,850 12,650 8,821 12,650 11,198
76,850 76,900 12,661 8,827 12,661 11,209
76,900 76,950 12,672 8,833 12,672 11,220
76,950 77,000 12,683 8,839 12,683 11,231
77,000
77,000 77,050 12,694 8,845 12,694 11,242
77,050 77,100 12,705 8,851 12,705 11,253
77,100 77,150 12,716 8,857 12,716 11,264
77,150 77,200 12,727 8,863 12,727 11,275
77,200 77,250 12,738 8,869 12,738 11,286
77,250 77,300 12,749 8,875 12,749 11,297
77,300 77,350 12,760 8,881 12,760 11,308
77,350 77,400 12,771 8,887 12,771 11,319
77,400 77,450 12,782 8,893 12,782 11,330
77,450 77,500 12,793 8,899 12,793 11,341
77,500 77,550 12,804 8,905 12,804 11,352
77,550 77,600 12,815 8,911 12,815 11,363
77,600 77,650 12,826 8,917 12,826 11,374
77,650 77,700 12,837 8,923 12,837 11,385
77,700 77,750 12,848 8,929 12,848 11,396
77,750 77,800 12,859 8,935 12,859 11,407
77,800 77,850 12,870 8,941 12,870 11,418
77,850 77,900 12,881 8,947 12,881 11,429
77,900 77,950 12,892 8,953 12,892 11,440
77,950 78,000 12,903 8,959 12,903 11,451
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
78,000
78,000 78,050 12,914 8,965 12,914 11,462
78,050 78,100 12,925 8,971 12,925 11,473
78,100 78,150 12,936 8,977 12,936 11,484
78,150 78,200 12,947 8,983 12,947 11,495
78,200 78,250 12,958 8,989 12,958 11,506
78,250 78,300 12,969 8,995 12,969 11,517
78,300 78,350 12,980 9,001 12,980 11,528
78,350 78,400 12,991 9,007 12,991 11,539
78,400 78,450 13,002 9,013 13,002 11,550
78,450 78,500 13,013 9,019 13,013 11,561
78,500 78,550 13,024 9,025 13,024 11,572
78,550 78,600 13,035 9,031 13,035 11,583
78,600 78,650 13,046 9,037 13,046 11,594
78,650 78,700 13,057 9,043 13,057 11,605
78,700 78,750 13,068 9,049 13,068 11,616
78,750 78,800 13,079 9,055 13,079 11,627
78,800 78,850 13,090 9,061 13,090 11,638
78,850 78,900 13,101 9,067 13,101 11,649
78,900 78,950 13,112 9,073 13,112 11,660
78,950 79,000 13,123 9,079 13,123 11,671
79,000
79,000 79,050 13,134 9,085 13,134 11,682
79,050 79,100 13,145 9,091 13,145 11,693
79,100 79,150 13,156 9,097 13,156 11,704
79,150 79,200 13,167 9,103 13,167 11,715
79,200 79,250 13,178 9,109 13,178 11,726
79,250 79,300 13,189 9,115 13,189 11,737
79,300 79,350 13,200 9,121 13,200 11,748
79,350 79,400 13,211 9,127 13,211 11,759
79,400 79,450 13,222 9,133 13,222 11,770
79,450 79,500 13,233 9,139 13,233 11,781
79,500 79,550 13,244 9,145 13,244 11,792
79,550 79,600 13,255 9,151 13,255 11,803
79,600 79,650 13,266 9,157 13,266 11,814
79,650 79,700 13,277 9,163 13,277 11,825
79,700 79,750 13,288 9,169 13,288 11,836
79,750 79,800 13,299 9,175 13,299 11,847
79,800 79,850 13,310 9,181 13,310 11,858
79,850 79,900 13,321 9,187 13,321 11,869
79,900 79,950 13,332 9,193 13,332 11,880
79,950 80,000 13,343 9,199 13,343 11,891
80,000
80,000 80,050 13,354 9,205 13,354 11,902
80,050 80,100 13,365 9,211 13,365 11,913
80,100 80,150 13,376 9,217 13,376 11,924
80,150 80,200 13,387 9,223 13,387 11,935
80,200 80,250 13,398 9,229 13,398 11,946
80,250 80,300 13,409 9,235 13,409 11,957
80,300 80,350 13,420 9,241 13,420 11,968
80,350 80,400 13,431 9,247 13,431 11,979
80,400 80,450 13,442 9,253 13,442 11,990
80,450 80,500 13,453 9,259 13,453 12,001
80,500 80,550 13,464 9,265 13,464 12,012
80,550 80,600 13,475 9,271 13,475 12,023
80,600 80,650 13,486 9,277 13,486 12,034
80,650 80,700 13,497 9,283 13,497 12,045
80,700 80,750 13,508 9,289 13,508 12,056
80,750 80,800 13,519 9,295 13,519 12,067
80,800 80,850 13,530 9,301 13,530 12,078
80,850 80,900 13,541 9,307 13,541 12,089
80,900 80,950 13,552 9,313 13,552 12,100
80,950 81,000 13,563 9,319 13,563 12,111
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
81,000
81,000 81,050 13,574 9,325 13,574 12,122
81,050 81,100 13,585 9,334 13,585 12,133
81,100 81,150 13,596 9,345 13,596 12,144
81,150 81,200 13,607 9,356 13,607 12,155
81,200 81,250 13,618 9,367 13,618 12,166
81,250 81,300 13,629 9,378 13,629 12,177
81,300 81,350 13,640 9,389 13,640 12,188
81,350 81,400 13,651 9,400 13,651 12,199
81,400 81,450 13,662 9,411 13,662 12,210
81,450 81,500 13,673 9,422 13,673 12,221
81,500 81,550 13,684 9,433 13,684 12,232
81,550 81,600 13,695 9,444 13,695 12,243
81,600 81,650 13,706 9,455 13,706 12,254
81,650 81,700 13,717 9,466 13,717 12,265
81,700 81,750 13,728 9,477 13,728 12,276
81,750 81,800 13,739 9,488 13,739 12,287
81,800 81,850 13,750 9,499 13,750 12,298
81,850 81,900 13,761 9,510 13,761 12,309
81,900 81,950 13,772 9,521 13,772 12,320
81,950 82,000 13,783 9,532 13,783 12,331
82,000
82,000 82,050 13,794 9,543 13,794 12,342
82,050 82,100 13,805 9,554 13,805 12,353
82,100 82,150 13,816 9,565 13,816 12,364
82,150 82,200 13,827 9,576 13,827 12,375
82,200 82,250 13,838 9,587 13,838 12,386
82,250 82,300 13,849 9,598 13,849 12,397
82,300 82,350 13,860 9,609 13,860 12,408
82,350 82,400 13,871 9,620 13,871 12,419
82,400 82,450 13,882 9,631 13,882 12,430
82,450 82,500 13,893 9,642 13,893 12,441
82,500 82,550 13,904 9,653 13,904 12,452
82,550 82,600 13,915 9,664 13,915 12,463
82,600 82,650 13,926 9,675 13,926 12,474
82,650 82,700 13,937 9,686 13,937 12,485
82,700 82,750 13,948 9,697 13,948 12,496
82,750 82,800 13,959 9,708 13,959 12,507
82,800 82,850 13,970 9,719 13,970 12,518
82,850 82,900 13,981 9,730 13,981 12,529
82,900 82,950 13,992 9,741 13,992 12,540
82,950 83,000 14,003 9,752 14,003 12,551
83,000
83,000 83,050 14,014 9,763 14,014 12,562
83,050 83,100 14,025 9,774 14,025 12,573
83,100 83,150 14,036 9,785 14,036 12,584
83,150 83,200 14,047 9,796 14,047 12,595
83,200 83,250 14,058 9,807 14,058 12,606
83,250 83,300 14,069 9,818 14,069 12,617
83,300 83,350 14,080 9,829 14,080 12,628
83,350 83,400 14,091 9,840 14,091 12,639
83,400 83,450 14,102 9,851 14,102 12,650
83,450 83,500 14,113 9,862 14,113 12,661
83,500 83,550 14,124 9,873 14,124 12,672
83,550 83,600 14,135 9,884 14,135 12,683
83,600 83,650 14,146 9,895 14,146 12,694
83,650 83,700 14,157 9,906 14,157 12,705
83,700 83,750 14,168 9,917 14,168 12,716
83,750 83,800 14,179 9,928 14,179 12,727
83,800 83,850 14,190 9,939 14,190 12,738
83,850 83,900 14,201 9,950 14,201 12,749
83,900 83,950 14,212 9,961 14,212 12,760
83,950 84,000 14,223 9,972 14,223 12,771
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
84,000
84,000 84,050 14,234 9,983 14,234 12,782
84,050 84,100 14,245 9,994 14,245 12,793
84,100 84,150 14,256 10,005 14,256 12,804
84,150 84,200 14,267 10,016 14,267 12,815
84,200 84,250 14,278 10,027 14,278 12,826
84,250 84,300 14,289 10,038 14,289 12,837
84,300 84,350 14,300 10,049 14,300 12,848
84,350 84,400 14,311 10,060 14,311 12,859
84,400 84,450 14,322 10,071 14,322 12,870
84,450 84,500 14,333 10,082 14,333 12,881
84,500 84,550 14,344 10,093 14,344 12,892
84,550 84,600 14,355 10,104 14,355 12,903
84,600 84,650 14,366 10,115 14,366 12,914
84,650 84,700 14,377 10,126 14,377 12,925
84,700 84,750 14,388 10,137 14,388 12,936
84,750 84,800 14,399 10,148 14,399 12,947
84,800 84,850 14,410 10,159 14,410 12,958
84,850 84,900 14,421 10,170 14,421 12,969
84,900 84,950 14,432 10,181 14,432 12,980
84,950 85,000 14,443 10,192 14,443 12,991
85,000
85,000 85,050 14,454 10,203 14,454 13,002
85,050 85,100 14,465 10,214 14,465 13,013
85,100 85,150 14,476 10,225 14,476 13,024
85,150 85,200 14,487 10,236 14,487 13,035
85,200 85,250 14,498 10,247 14,498 13,046
85,250 85,300 14,509 10,258 14,509 13,057
85,300 85,350 14,520 10,269 14,520 13,068
85,350 85,400 14,531 10,280 14,531 13,079
85,400 85,450 14,542 10,291 14,542 13,090
85,450 85,500 14,553 10,302 14,553 13,101
85,500 85,550 14,564 10,313 14,564 13,112
85,550 85,600 14,575 10,324 14,575 13,123
85,600 85,650 14,586 10,335 14,586 13,134
85,650 85,700 14,597 10,346 14,597 13,145
85,700 85,750 14,608 10,357 14,608 13,156
85,750 85,800 14,619 10,368 14,619 13,167
85,800 85,850 14,630 10,379 14,630 13,178
85,850 85,900 14,641 10,390 14,641 13,189
85,900 85,950 14,652 10,401 14,652 13,200
85,950 86,000 14,663 10,412 14,663 13,211
86,000
86,000 86,050 14,674 10,423 14,674 13,222
86,050 86,100 14,685 10,434 14,685 13,233
86,100 86,150 14,696 10,445 14,696 13,244
86,150 86,200 14,707 10,456 14,707 13,255
86,200 86,250 14,718 10,467 14,718 13,266
86,250 86,300 14,729 10,478 14,729 13,277
86,300 86,350 14,740 10,489 14,740 13,288
86,350 86,400 14,751 10,500 14,751 13,299
86,400 86,450 14,763 10,511 14,763 13,311
86,450 86,500 14,775 10,522 14,775 13,323
86,500 86,550 14,787 10,533 14,787 13,335
86,550 86,600 14,799 10,544 14,799 13,347
86,600 86,650 14,811 10,555 14,811 13,359
86,650 86,700 14,823 10,566 14,823 13,371
86,700 86,750 14,835 10,577 14,835 13,383
86,750 86,800 14,847 10,588 14,847 13,395
86,800 86,850 14,859 10,599 14,859 13,407
86,850 86,900 14,871 10,610 14,871 13,419
86,900 86,950 14,883 10,621 14,883 13,431
86,950 87,000 14,895 10,632 14,895 13,443
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
87,000
87,000 87,050 14,907 10,643 14,907 13,455
87,050 87,100 14,919 10,654 14,919 13,467
87,100 87,150 14,931 10,665 14,931 13,479
87,150 87,200 14,943 10,676 14,943 13,491
87,200 87,250 14,955 10,687 14,955 13,503
87,250 87,300 14,967 10,698 14,967 13,515
87,300 87,350 14,979 10,709 14,979 13,527
87,350 87,400 14,991 10,720 14,991 13,539
87,400 87,450 15,003 10,731 15,003 13,551
87,450 87,500 15,015 10,742 15,015 13,563
87,500 87,550 15,027 10,753 15,027 13,575
87,550 87,600 15,039 10,764 15,039 13,587
87,600 87,650 15,051 10,775 15,051 13,599
87,650 87,700 15,063 10,786 15,063 13,611
87,700 87,750 15,075 10,797 15,075 13,623
87,750 87,800 15,087 10,808 15,087 13,635
87,800 87,850 15,099 10,819 15,099 13,647
87,850 87,900 15,111 10,830 15,111 13,659
87,900 87,950 15,123 10,841 15,123 13,671
87,950 88,000 15,135 10,852 15,135 13,683
88,000
88,000 88,050 15,147 10,863 15,147 13,695
88,050 88,100 15,159 10,874 15,159 13,707
88,100 88,150 15,171 10,885 15,171 13,719
88,150 88,200 15,183 10,896 15,183 13,731
88,200 88,250 15,195 10,907 15,195 13,743
88,250 88,300 15,207 10,918 15,207 13,755
88,300 88,350 15,219 10,929 15,219 13,767
88,350 88,400 15,231 10,940 15,231 13,779
88,400 88,450 15,243 10,951 15,243 13,791
88,450 88,500 15,255 10,962 15,255 13,803
88,500 88,550 15,267 10,973 15,267 13,815
88,550 88,600 15,279 10,984 15,279 13,827
88,600 88,650 15,291 10,995 15,291 13,839
88,650 88,700 15,303 11,006 15,303 13,851
88,700 88,750 15,315 11,017 15,315 13,863
88,750 88,800 15,327 11,028 15,327 13,875
88,800 88,850 15,339 11,039 15,339 13,887
88,850 88,900 15,351 11,050 15,351 13,899
88,900 88,950 15,363 11,061 15,363 13,911
88,950 89,000 15,375 11,072 15,375 13,923
89,000
89,000 89,050 15,387 11,083 15,387 13,935
89,050 89,100 15,399 11,094 15,399 13,947
89,100 89,150 15,411 11,105 15,411 13,959
89,150 89,200 15,423 11,116 15,423 13,971
89,200 89,250 15,435 11,127 15,435 13,983
89,250 89,300 15,447 11,138 15,447 13,995
89,300 89,350 15,459 11,149 15,459 14,007
89,350 89,400 15,471 11,160 15,471 14,019
89,400 89,450 15,483 11,171 15,483 14,031
89,450 89,500 15,495 11,182 15,495 14,043
89,500 89,550 15,507 11,193 15,507 14,055
89,550 89,600 15,519 11,204 15,519 14,067
89,600 89,650 15,531 11,215 15,531 14,079
89,650 89,700 15,543 11,226 15,543 14,091
89,700 89,750 15,555 11,237 15,555 14,103
89,750 89,800 15,567 11,248 15,567 14,115
89,800 89,850 15,579 11,259 15,579 14,127
89,850 89,900 15,591 11,270 15,591 14,139
89,900 89,950 15,603 11,281 15,603 14,151
89,950 90,000 15,615 11,292 15,615 14,163
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
90,000
90,000 90,050 15,627 11,303 15,627 14,175
90,050 90,100 15,639 11,314 15,639 14,187
90,100 90,150 15,651 11,325 15,651 14,199
90,150 90,200 15,663 11,336 15,663 14,211
90,200 90,250 15,675 11,347 15,675 14,223
90,250 90,300 15,687 11,358 15,687 14,235
90,300 90,350 15,699 11,369 15,699 14,247
90,350 90,400 15,711 11,380 15,711 14,259
90,400 90,450 15,723 11,391 15,723 14,271
90,450 90,500 15,735 11,402 15,735 14,283
90,500 90,550 15,747 11,413 15,747 14,295
90,550 90,600 15,759 11,424 15,759 14,307
90,600 90,650 15,771 11,435 15,771 14,319
90,650 90,700 15,783 11,446 15,783 14,331
90,700 90,750 15,795 11,457 15,795 14,343
90,750 90,800 15,807 11,468 15,807 14,355
90,800 90,850 15,819 11,479 15,819 14,367
90,850 90,900 15,831 11,490 15,831 14,379
90,900 90,950 15,843 11,501 15,843 14,391
90,950 91,000 15,855 11,512 15,855 14,403
91,000
91,000 91,050 15,867 11,523 15,867 14,415
91,050 91,100 15,879 11,534 15,879 14,427
91,100 91,150 15,891 11,545 15,891 14,439
91,150 91,200 15,903 11,556 15,903 14,451
91,200 91,250 15,915 11,567 15,915 14,463
91,250 91,300 15,927 11,578 15,927 14,475
91,300 91,350 15,939 11,589 15,939 14,487
91,350 91,400 15,951 11,600 15,951 14,499
91,400 91,450 15,963 11,611 15,963 14,511
91,450 91,500 15,975 11,622 15,975 14,523
91,500 91,550 15,987 11,633 15,987 14,535
91,550 91,600 15,999 11,644 15,999 14,547
91,600 91,650 16,011 11,655 16,011 14,559
91,650 91,700 16,023 11,666 16,023 14,571
91,700 91,750 16,035 11,677 16,035 14,583
91,750 91,800 16,047 11,688 16,047 14,595
91,800 91,850 16,059 11,699 16,059 14,607
91,850 91,900 16,071 11,710 16,071 14,619
91,900 91,950 16,083 11,721 16,083 14,631
91,950 92,000 16,095 11,732 16,095 14,643
92,000
92,000 92,050 16,107 11,743 16,107 14,655
92,050 92,100 16,119 11,754 16,119 14,667
92,100 92,150 16,131 11,765 16,131 14,679
92,150 92,200 16,143 11,776 16,143 14,691
92,200 92,250 16,155 11,787 16,155 14,703
92,250 92,300 16,167 11,798 16,167 14,715
92,300 92,350 16,179 11,809 16,179 14,727
92,350 92,400 16,191 11,820 16,191 14,739
92,400 92,450 16,203 11,831 16,203 14,751
92,450 92,500 16,215 11,842 16,215 14,763
92,500 92,550 16,227 11,853 16,227 14,775
92,550 92,600 16,239 11,864 16,239 14,787
92,600 92,650 16,251 11,875 16,251 14,799
92,650 92,700 16,263 11,886 16,263 14,811
92,700 92,750 16,275 11,897 16,275 14,823
92,750 92,800 16,287 11,908 16,287 14,835
92,800 92,850 16,299 11,919 16,299 14,847
92,850 92,900 16,311 11,930 16,311 14,859
92,900 92,950 16,323 11,941 16,323 14,871
92,950 93,000 16,335 11,952 16,335 14,883
(Continued)
* This column must also be used by a qualifying widow(er).
2021 Tax Table — Continued
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
93,000
93,000 93,050 16,347 11,963 16,347 14,895
93,050 93,100 16,359 11,974 16,359 14,907
93,100 93,150 16,371 11,985 16,371 14,919
93,150 93,200 16,383 11,996 16,383 14,931
93,200 93,250 16,395 12,007 16,395 14,943
93,250 93,300 16,407 12,018 16,407 14,955
93,300 93,350 16,419 12,029 16,419 14,967
93,350 93,400 16,431 12,040 16,431 14,979
93,400 93,450 16,443 12,051 16,443 14,991
93,450 93,500 16,455 12,062 16,455 15,003
93,500 93,550 16,467 12,073 16,467 15,015
93,550 93,600 16,479 12,084 16,479 15,027
93,600 93,650 16,491 12,095 16,491 15,039
93,650 93,700 16,503 12,106 16,503 15,051
93,700 93,750 16,515 12,117 16,515 15,063
93,750 93,800 16,527 12,128 16,527 15,075
93,800 93,850 16,539 12,139 16,539 15,087
93,850 93,900 16,551 12,150 16,551 15,099
93,900 93,950 16,563 12,161 16,563 15,111
93,950 94,000 16,575 12,172 16,575 15,123
94,000
94,000 94,050 16,587 12,183 16,587 15,135
94,050 94,100 16,599 12,194 16,599 15,147
94,100 94,150 16,611 12,205 16,611 15,159
94,150 94,200 16,623 12,216 16,623 15,171
94,200 94,250 16,635 12,227 16,635 15,183
94,250 94,300 16,647 12,238 16,647 15,195
94,300 94,350 16,659 12,249 16,659 15,207
94,350 94,400 16,671 12,260 16,671 15,219
94,400 94,450 16,683 12,271 16,683 15,231
94,450 94,500 16,695 12,282 16,695 15,243
94,500 94,550 16,707 12,293 16,707 15,255
94,550 94,600 16,719 12,304 16,719 15,267
94,600 94,650 16,731 12,315 16,731 15,279
94,650 94,700 16,743 12,326 16,743 15,291
94,700 94,750 16,755 12,337 16,755 15,303
94,750 94,800 16,767 12,348 16,767 15,315
94,800 94,850 16,779 12,359 16,779 15,327
94,850 94,900 16,791 12,370 16,791 15,339
94,900 94,950 16,803 12,381 16,803 15,351
94,950 95,000 16,815 12,392 16,815 15,363
95,000
95,000 95,050 16,827 12,403 16,827 15,375
95,050 95,100 16,839 12,414 16,839 15,387
95,100 95,150 16,851 12,425 16,851 15,399
95,150 95,200 16,863 12,436 16,863 15,411
95,200 95,250 16,875 12,447 16,875 15,423
95,250 95,300 16,887 12,458 16,887 15,435
95,300 95,350 16,899 12,469 16,899 15,447
95,350 95,400 16,911 12,480 16,911 15,459
95,400 95,450 16,923 12,491 16,923 15,471
95,450 95,500 16,935 12,502 16,935 15,483
95,500 95,550 16,947 12,513 16,947 15,495
95,550 95,600 16,959 12,524 16,959 15,507
95,600 95,650 16,971 12,535 16,971 15,519
95,650 95,700 16,983 12,546 16,983 15,531
95,700 95,750 16,995 12,557 16,995 15,543
95,750 95,800 17,007 12,568 17,007 15,555
95,800 95,850 17,019 12,579 17,019 15,567
95,850 95,900 17,031 12,590 17,031 15,579
95,900 95,950 17,043 12,601 17,043 15,591
95,950 96,000 17,055 12,612 17,055 15,603
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
96,000
96,000 96,050 17,067 12,623 17,067 15,615
96,050 96,100 17,079 12,634 17,079 15,627
96,100 96,150 17,091 12,645 17,091 15,639
96,150 96,200 17,103 12,656 17,103 15,651
96,200 96,250 17,115 12,667 17,115 15,663
96,250 96,300 17,127 12,678 17,127 15,675
96,300 96,350 17,139 12,689 17,139 15,687
96,350 96,400 17,151 12,700 17,151 15,699
96,400 96,450 17,163 12,711 17,163 15,711
96,450 96,500 17,175 12,722 17,175 15,723
96,500 96,550 17,187 12,733 17,187 15,735
96,550 96,600 17,199 12,744 17,199 15,747
96,600 96,650 17,211 12,755 17,211 15,759
96,650 96,700 17,223 12,766 17,223 15,771
96,700 96,750 17,235 12,777 17,235 15,783
96,750 96,800 17,247 12,788 17,247 15,795
96,800 96,850 17,259 12,799 17,259 15,807
96,850 96,900 17,271 12,810 17,271 15,819
96,900 96,950 17,283 12,821 17,283 15,831
96,950 97,000 17,295 12,832 17,295 15,843
97,000
97,000 97,050 17,307 12,843 17,307 15,855
97,050 97,100 17,319 12,854 17,319 15,867
97,100 97,150 17,331 12,865 17,331 15,879
97,150 97,200 17,343 12,876 17,343 15,891
97,200 97,250 17,355 12,887 17,355 15,903
97,250 97,300 17,367 12,898 17,367 15,915
97,300 97,350 17,379 12,909 17,379 15,927
97,350 97,400 17,391 12,920 17,391 15,939
97,400 97,450 17,403 12,931 17,403 15,951
97,450 97,500 17,415 12,942 17,415 15,963
97,500 97,550 17,427 12,953 17,427 15,975
97,550 97,600 17,439 12,964 17,439 15,987
97,600 97,650 17,451 12,975 17,451 15,999
97,650 97,700 17,463 12,986 17,463 16,011
97,700 97,750 17,475 12,997 17,475 16,023
97,750 97,800 17,487 13,008 17,487 16,035
97,800 97,850 17,499 13,019 17,499 16,047
97,850 97,900 17,511 13,030 17,511 16,059
97,900 97,950 17,523 13,041 17,523 16,071
97,950 98,000 17,535 13,052 17,535 16,083
98,000
98,000 98,050 17,547 13,063 17,547 16,095
98,050 98,100 17,559 13,074 17,559 16,107
98,100 98,150 17,571 13,085 17,571 16,119
98,150 98,200 17,583 13,096 17,583 16,131
98,200 98,250 17,595 13,107 17,595 16,143
98,250 98,300 17,607 13,118 17,607 16,155
98,300 98,350 17,619 13,129 17,619 16,167
98,350 98,400 17,631 13,140 17,631 16,179
98,400 98,450 17,643 13,151 17,643 16,191
98,450 98,500 17,655 13,162 17,655 16,203
98,500 98,550 17,667 13,173 17,667 16,215
98,550 98,600 17,679 13,184 17,679 16,227
98,600 98,650 17,691 13,195 17,691 16,239
98,650 98,700 17,703 13,206 17,703 16,251
98,700 98,750 17,715 13,217 17,715 16,263
98,750 98,800 17,727 13,228 17,727 16,275
98,800 98,850 17,739 13,239 17,739 16,287
98,850 98,900 17,751 13,250 17,751 16,299
98,900 98,950 17,763 13,261 17,763 16,311
98,950 99,000 17,775 13,272 17,775 16,323
If line 15
(taxable
income) is—
And you are—
At
least
But
less
than
Single Married
filing
jointly *
Married
filing
sepa-
rately
Head of
a
house-
hold
Your tax is—
99,000
99,000 99,050 17,787 13,283 17,787 16,335
99,050 99,100 17,799 13,294 17,799 16,347
99,100 99,150 17,811 13,305 17,811 16,359
99,150 99,200 17,823 13,316 17,823 16,371
99,200 99,250 17,835 13,327 17,835 16,383
99,250 99,300 17,847 13,338 17,847 16,395
99,300 99,350 17,859 13,349 17,859 16,407
99,350 99,400 17,871 13,360 17,871 16,419
99,400 99,450 17,883 13,371 17,883 16,431
99,450 99,500 17,895 13,382 17,895 16,443
99,500 99,550 17,907 13,393 17,907 16,455
99,550 99,600 17,919 13,404 17,919 16,467
99,600 99,650 17,931 13,415 17,931 16,479
99,650 99,700 17,943 13,426 17,943 16,491
99,700 99,750 17,955 13,437 17,955 16,503
99,750 99,800 17,967 13,448 17,967 16,515
99,800 99,850 17,979 13,459 17,979 16,527
99,850 99,900 17,991 13,470 17,991 16,539
99,900 99,950 18,003 13,481 18,003 16,551
99,950 100,000 18,015 13,492 18,015 16,563
$100,000
or over
use the Tax
Computation
Worksheet
* This column must also be used by a qualifying widow(er).
2021 Tax Computation Worksheet—Line 16CAUTION
!
See Line 16 in the Instructions for Form 1040 to see if you must use the worksheet below to figure your tax.
Note. If you’re required to use this worksheet to figure the tax on an amount from another form or worksheet, such as the Qualified
Dividends and Capital Gain Tax Worksheet, the Schedule D Tax Worksheet, Schedule J, Form 8615, or the Foreign Earned Income Tax
Worksheet, enter the amount from that form or worksheet in column (a) of the row that applies to the amount you’re looking up. Enter the
result on the appropriate line of the form or worksheet that you’re completing.
Section A—Use if your filing status is Single. Complete the row below that applies to you.
Taxable income.
If line 15 is—
(a)
Enter the amount from
line 15
(b)
Multiplication
amount
(c)
Multiply
(a) by (b)
(d)
Subtraction amount
Tax.
Subtract (d) from (c).
Enter the result here and
on Form 1040 or
1040-SR, line 16
At least $100,000 but not over $164,925 $ × 24% (0.24) $ $ 5,979.00 $
Over $164,925 but not over $209,425 $ × 32% (0.32) $ $ 19,173.00 $
Over $209,425 but not over $523,600 $ × 35% (0.35) $ $ 25,455.75 $
Over $523,600 $ × 37% (0.37) $ $ 35,927.75 $
Section B—Use if your filing status is Married filing jointly or Qualifying widow(er). Complete the row below that applies to you.
Taxable income.
If line 15 is—
(a)
Enter the amount
from line 15
(b)
Multiplication
amount
(c)
Multiply
(a) by (b)
(d)
Subtraction amount
Tax.
Subtract (d) from (c).
Enter the result here and
on Form 1040 or
1040-SR, line 16
At least $100,000 but not over $172,750 $ × 22% (0.22) $ $ 8,503.00 $
Over $172,750 but not over $329,850 $ × 24% (0.24) $ $ 11,958.00 $
Over $329,850 but not over $418,850 $ × 32% (0.32) $ $ 38,346.00 $
Over $418,850 but not over $628,300 $ × 35% (0.35) $ $ 50,911.50 $
Over $628,300 $ × 37% (0.37) $ $ 63,477.50 $
Section C—Use if your filing status is Married filing separately. Complete the row below that applies to you.
Taxable income.
If line 15 is—
(a)
Enter the amount from
line 15
(b)
Multiplication
amount
(c)
Multiply
(a) by (b)
(d)
Subtraction amount
Tax.
Subtract (d) from (c).
Enter the result here and
on Form 1040 or
1040-SR, line 16
At least $100,000 but not over $164,925 $ × 24% (0.24) $ $ 5,979.00 $
Over $164,925 but not over $209,425 $ × 32% (0.32) $ $ 19,173.00 $
Over $209,425 but not over $314,150 $ × 35% (0.35) $ $ 25,455.75 $
Over $314,150 $ × 37% (0.37) $ $ 31,738.75 $
Section D—Use if your filing status is Head of household. Complete the row below that applies to you.
Taxable income.
If line 15 is—
(a)
Enter the amount
from line 15
(b)
Multiplication amount
(c)
Multiply
(a) by (b)
(d)
Subtraction amount
Tax.
Subtract (d) from (c).
Enter the result here and
on Form 1040 or
1040-SR, line 16
At least $100,000 but not over $164,900 $ × 24% (0.24) $ $ 7,431.00 $
Over $164,900 but not over $209,400 $ × 32% (0.32) $ $ 20,623.00 $
Over $209,400 but not over $523,600 $ × 35% (0.35) $ $ 26,905.00 $
Over $523,600 $ × 37% (0.37) $ $ 37,377.00 $
Publication 17 (2021) Page 123
2021 Tax Rate SchedulesCAUTION
!
The Tax Rate Schedules are shown so you can see the tax rate that applies to all levels of taxable income. Don’t use them to figure your tax.
Instead, see Chapter 13.
Schedule X —If your filing status is Single
If your taxable income is: The tax is:
Over— But not over— of the amount over—
$0 $9,950 - - - - - - - 10% $0
9,950 40,525 $995.00 + 12% 9,950
40,525 86,375 4,664.00 + 22% 40,525
86,375 164,925 14,751.00 + 24% 86,375
164,925 209,425 33,603.00 + 32% 164,925
209,425 523,600 47,843.00 + 35% 209,425
523,600 - - - - - - - 157,804.25 + 37% 523,600
Schedule Y-1 —If your filing status is Married filing jointly or Qualifying widow(er)
If your taxable income is: The tax is:
Over— But not over— of the amount over—
$0 $19,900 - - - - - - - 10% $0
19,900 81,050 $1,990.00 + 12% 19,900
81,050 172,750 9,328.00 + 22% 81,050
172,750 329,850 29,502.00 + 24% 172,750
329,850 418,850 67,206.00 + 32% 329,850
418,850 628,300 95,686.00 + 35% 418,850
628,300 - - - - - - - 168,993.50 + 37% 628,300
Schedule Y-2 —If your filing status is Married filing separately
If your taxable income is: The tax is:
Over— But not over— of the amount over—
$0 $9,950 - - - - - - - 10% $0
9,950 40,525 $995.00 + 12% 9,950
40,525 86,375 4,664.00 + 22% 40,525
86,375 164,925 14,751.00 + 24% 86,375
164,925 209,425 33,603.00 + 32% 164,925
209,425 314,150 47,843.00 + 35% 209,425
314,150 - - - - - - - 84,496.75 + 37% 314,150
Schedule Z —If your filing status is Head of household
If your taxable income is: The tax is:
Over— But not over— of the amount over—
$0 $14,200 - - - - - - - 10% $0
14,200 54,200 $1,420.00 + 12% 14,200
54,200 86,350 6,220.00 + 22% 54,200
86,350 164,900 13,293.00 + 24% 86,350
164,900 209,400 32,145.00 + 32% 164,900
209,400 523,600 46,385.00 + 35% 209,400
523,600 - - - - - - - 156,355.00 + 37% 523,600
Page 124 Publication 17 (2021)
Your Rights as a Taxpayer
This section explains your rights as
a taxpayer and the processes for
examination, appeal, collection,
and refunds.
The Taxpayer Bill
of Rights
1. The Right to Be Informed.
Taxpayers have the right to know
what they need to do to comply
with the tax laws. They are entitled
to clear explanations of the laws
and IRS procedures in all tax
forms, instructions, publications,
notices, and correspondence.
They have the right to be informed
of IRS decisions about their tax ac-
counts and to receive clear explan-
ations of the outcomes.
2. The Right to Quality Service.
Taxpayers have the right to receive
prompt, courteous, and professio-
nal assistance in their dealings with
the IRS, to be spoken to in a way
they can easily understand, to re-
ceive clear and easily understand-
able communications from the IRS,
and to speak to a supervisor about
inadequate service.
3. The Right to Pay No More
than the Correct Amount of Tax.
Taxpayers have the right to pay
only the amount of tax legally due,
including interest and penalties,
and to have the IRS apply all tax
payments properly.
4. The Right to Challenge the
IRS’s Position and Be Heard.
Taxpayers have the right to raise
objections and provide additional
documentation in response to for-
mal IRS actions or proposed ac-
tions, to expect that the IRS will
consider their timely objections
and documentation promptly and
fairly, and to receive a response if
the IRS does not agree with their
position.
5. The Right to Appeal an IRS
Decision in an Independent Fo-
rum. Taxpayers are entitled to a
fair and impartial administrative ap-
peal of most IRS decisions, includ-
ing many penalties, and have the
right to receive a written response
regarding the Office of Appeals'
decision. Taxpayers generally
have the right to take their cases to
court.
6. The Right to Finality. Taxpay-
ers have the right to know the max-
imum amount of time they have to
challenge the IRS’s position as well
as the maximum amount of time
the IRS has to audit a particular tax
year or collect a tax debt. Taxpay-
ers have the right to know when
the IRS has finished an audit.
7. The Right to Privacy. Taxpay-
ers have the right to expect that
any IRS inquiry, examination, or
enforcement action will comply
with the law and be no more intru-
sive than necessary, and will re-
spect all due process rights, in-
cluding search and seizure
protections, and will provide,
where applicable, a collection due
process hearing.
8. The Right to Confidentiality.
Taxpayers have the right to expect
that any information they provide to
the IRS will not be disclosed unless
authorized by the taxpayer or by
law. Taxpayers have the right to
expect appropriate action will be
taken against employees, return
preparers, and others who wrong-
fully use or disclose taxpayer re-
turn information.
9. The Right to Retain Repre-
sentation. Taxpayers have the
right to retain an authorized repre-
sentative of their choice to repre-
sent them in their dealings with the
IRS. Taxpayers have the right to
seek assistance from a Low In-
come Taxpayer Clinic if they can-
not afford representation.
10. The Right to a Fair and Just
Tax System. Taxpayers have the
right to expect the tax system to
consider facts and circumstances
that might affect their underlying li-
abilities, ability to pay, or ability to
provide information timely. Taxpay-
ers have the right to receive assis-
tance from the Taxpayer Advocate
Service if they are experiencing fi-
nancial difficulty or if the IRS has
not resolved their tax issues prop-
erly and timely through its normal
channels.
Examinations
(Audits)
We accept most taxpayers’ returns
as filed. If we inquire about your re-
turn or select it for examination, it
does not suggest that you are dis-
honest. The inquiry or examination
may or may not result in more tax.
We may close your case without
change; or, you may receive a re-
fund.
The process of selecting a re-
turn for examination usually begins
in one of two ways. First, we use
computer programs to identify re-
turns that may have incorrect
amounts. These programs may be
based on information returns, such
as Forms 1099 and W-2, on stud-
ies of past examinations, or on cer-
tain issues identified by compli-
ance projects. Second, we use
information from outside sources
that indicates that a return may
have incorrect amounts. These
sources may include newspapers,
public records, and individuals. If
we determine that the information
is accurate and reliable, we may
use it to select a return for exami-
nation.
Publication 556, Examination of
Returns, Appeal Rights, and
Claims for Refund, explains the
rules and procedures that we fol-
low in examinations. The following
sections give an overview of how
we conduct examinations.
By mail. We handle many exami-
nations and inquiries by mail. We
will send you a letter with either a
request for more information or a
reason why we believe a change to
your return may be needed. You
can respond by mail or you can re-
quest a personal interview with an
examiner. If you mail us the re-
quested information or provide an
explanation, we may or may not
agree with you, and we will explain
the reasons for any changes.
Please do not hesitate to write to
us about anything you do not un-
derstand.
By interview. If we notify you that
we will conduct your examination
through a personal interview, or
you request such an interview, you
have the right to ask that the ex-
amination take place at a reasona-
ble time and place that is conven-
ient for both you and the IRS. If our
examiner proposes any changes to
your return, he or she will explain
the reasons for the changes. If you
do not agree with these changes,
you can meet with the examiner's
supervisor.
Repeat examinations. If we ex-
amined your return for the same
items in either of the 2 previous
years and proposed no change to
your tax liability, please contact us
as soon as possible so we can see
if we should discontinue the exami-
nation.
Appeals
If you do not agree with the exam-
iner's proposed changes, you can
appeal them to the Appeals Office
of the IRS. Most differences can be
settled without expensive and
time-consuming court trials. Your
appeal rights are explained in de-
tail in both Publication 5, Your Ap-
peal Rights and How To Prepare a
Protest If You Don't Agree, and
Publication 556, Examination of
Returns, Appeal Rights, and
Claims for Refund.
If you do not wish to use the
Appeals Office or disagree with its
findings, you may be able to take
your case to the U.S. Tax Court,
U.S. Court of Federal Claims, or
the U.S. District Court where you
live. If you take your case to court,
the IRS will have the burden of
proving certain facts if you kept ad-
equate records to show your tax li-
ability, cooperated with the IRS,
and meet certain other conditions.
If the court agrees with you on
most issues in your case and finds
that our position was largely unjus-
tified, you may be able to recover
some of your administrative and lit-
igation costs. You will not be eligi-
ble to recover these costs unless
you tried to resolve your case ad-
ministratively, including going
through the appeals system, and
you gave us the information neces-
sary to resolve the case.
Collections
Publication 594, The IRS Collec-
tion Process, explains your rights
and responsibilities regarding pay-
ment of federal taxes. It describes:
• What to do when you owe
taxes. It describes what to do
if you get a tax bill and what to
do if you think your bill is
wrong. It also covers making
installment payments, delay-
ing collection action, and sub-
mitting an offer in compro-
mise.
• IRS collection actions. It cov-
ers liens, releasing a lien, lev-
ies, releasing a levy, seizures
and sales, and release of
property.
• IRS certification to the State
Department of a seriously de-
linquent tax debt, which will
generally result in denial of a
passport application and may
lead to revocation of a pass-
port.
Your collection appeal rights
are explained in detail in Publica-
tion 1660, Collection Appeal
Rights.
Innocent spouse relief. Gener-
ally, both you and your spouse are
each responsible for paying the full
amount of tax, interest, and
Publication 17 (2021) Page 125
penalties due on your joint return.
However, if you qualify for innocent
spouse relief, you may be relieved
of part or all of the joint liability. To
request relief, you must file Form
8857, Request for Innocent
Spouse Relief. For more informa-
tion on innocent spouse relief, see
Publication 971, Innocent Spouse
Relief, and Form 8857.
Potential third party contacts.
Generally, the IRS will deal directly
with you or your duly authorized
representative. However, we
sometimes talk with other persons
if we need information that you
have been unable to provide, or to
verify information we have re-
ceived. If we do contact other per-
sons, such as a neighbor, bank,
employer, or employees, we will
generally need to tell them limited
information, such as your name.
The law prohibits us from disclos-
ing any more information than is
necessary to obtain or verify the in-
formation we are seeking. Our
need to contact other persons may
continue as long as there is activity
in your case. If we do contact other
persons, you have a right to re-
quest a list of those contacted.
Your request can be made by tele-
phone, in writing, or during a per-
sonal interview.
Refunds
You may file a claim for refund if
you think you paid too much tax.
You must generally file the claim
within 3 years from the date you
filed your original return or 2 years
from the date you paid the tax,
whichever is later. The law gener-
ally provides for interest on your re-
fund if it is not paid within 45 days
of the date you filed your return or
claim for refund. Publication 556,
Examination of Returns, Appeal
Rights, and Claims for Refund, has
more information on refunds.
If you were due a refund but
you did not file a return, you gener-
ally must file your return within 3
years from the date the return was
due (including extensions) to get
that refund.
Taxpayer Advocate
Service
TAS is an independent organiza-
tion within the IRS that can help
protect your taxpayer rights. We
can offer you help if your tax prob-
lem is causing a hardship, or
you've tried but haven't been able
to resolve your problem with the
IRS. If you qualify for our assis-
tance, which is always free, we will
do everything possible to help you.
Visit TaxpayerAdvocate.IRS.gov or
call 1-877-777-4778.
Tax Information
The IRS provides the following
sources for forms, publications,
and additional information.
• Internet: IRS.gov.
• Tax Questions:
IRS.gov/help/tax-law-
questions and
How To Get Tax Help.
• Forms and Publications:
IRS.gov/Forms and
IRS.gov/OrderForms.
• Small Business Ombudsman:
A small business entity can
participate in the regulatory
process and comment on en-
forcement actions of the IRS
by calling 1-888-REG-FAIR.
• Treasury Inspector General
for Tax Administration: You
can confidentially report mis-
conduct, waste, fraud, or
abuse by an IRS employee by
calling 1-800-366-4484. Peo-
ple who are deaf, hard of
hearing, or have a speech dis-
ability and who have access
to TTY/TDD equipment can
call 1-800-877-8339. You can
remain anonymous.
How To Get Tax Help
If you have questions about a tax
issue; need help preparing your tax
return; or want to download free
publications, forms, or instructions,
go to IRS.gov to find resources that
can help you right away.
Preparing and filing your tax re-
turn. After receiving all your wage
and earnings statements (Forms
W-2, W-2G, 1099-R, 1099-MISC,
1099-NEC, etc.); unemployment
compensation statements (by mail
or in a digital format) or other gov-
ernment payment statements
(Form 1099-G); and interest, divi-
dend, and retirement statements
from banks and investment firms
(Forms 1099), you have several
options to choose from to prepare
and file your tax return. You can
prepare the tax return yourself, see
if you qualify for free tax prepara-
tion, or hire a tax professional to
prepare your return.
For 2021, if you received
an Economic Impact Pay-
ment (EIP), refer to your
Notice 1444-C, Your 2021 Eco-
nomic Impact Payment. If you re-
ceived Advance Child Tax Credit
payments, refer to your Letter
6419.
Free options for tax prepara-
tion. Go to IRS.gov to see your
options for preparing and filing
your return online or in your localCAUTION
!
community, if you qualify, which in-
clude the following.
• Free File. This program lets
you prepare and file your fed-
eral individual income tax re-
turn for free using brand-name
tax-preparation-and-filing soft-
ware or Free File fillable
forms. However, state tax
preparation may not be availa-
ble through Free File. Go to
IRS.gov/FreeFile to see if you
qualify for free online federal
tax preparation, e-filing, and
direct deposit or payment op-
tions.
• VITA. The Volunteer Income
Tax Assistance (VITA) pro-
gram offers free tax help to
people with low-to-moderate
incomes, persons with disabil-
ities, and limited-Eng-
lish-speaking taxpayers who
need help preparing their own
tax returns. Go to IRS.gov/
VITA, download the free
IRS2Go app, or call
800-906-9887 for information
on free tax return preparation.
• TCE. The Tax Counseling for
the Elderly (TCE) program of-
fers free tax help for all tax-
payers, particularly those who
are 60 years of age and older.
TCE volunteers specialize in
answering questions about
pensions and retirement-rela-
ted issues unique to seniors.
Go to IRS.gov/TCE, download
the free IRS2Go app, or call
888-227-7669 for information
on free tax return preparation.
• MilTax. Members of the U.S.
Armed Forces and qualified
veterans may use MilTax, a
free tax service offered by the
Department of Defense
through Military OneSource.
For more information, go to
MilitaryOneSource
(MilitaryOneSource.mil/Tax).
Also, the IRS offers Free
Fillable Forms, which can be
completed online and then
filed electronically regardless
of income.
Using online tools to help pre-
pare your return. Go to IRS.gov/
Tools for the following.
• The Earned Income Tax
Credit Assistant (IRS.gov/
EITCAssistant) determines if
you’re eligible for the earned
income credit (EIC).
• The Online EIN Application
(IRS.gov/EIN) helps you get
an employer identification
number (EIN) at no cost.
• The Tax Withholding
Estimator (IRS.gov/W4app)
makes it easier for everyone
to pay the correct amount of
tax during the year. The tool is
a convenient, online way to
check and tailor your with-
holding. It’s more user-friendly
for taxpayers, including retir-
ees and self-employed indi-
viduals. The features include
the following.
▶ Easy to understand lan-
guage.
▶ The ability to switch be-
tween screens, correct previ-
ous entries, and skip screens
that don’t apply.
▶ Tips and links to help
you determine if you qualify
for tax credits and deductions.
▶ A progress tracker.
▶ A self-employment tax
feature.
▶ Automatic calculation of
taxable social security bene-
fits.
• The First-Time Homebuyer
Credit Account Look-up
(IRS.gov/HomeBuyer) tool
provides information on your
repayments and account bal-
ance.
• The Sales Tax Deduction
Calculator (IRS.gov/SalesTax)
figures the amount you can
claim if you itemize deduc-
tions on Schedule A (Form
1040).
Getting answers to your
tax questions. On
IRS.gov, you can get
up-to-date information on current
events and changes in tax law.
Page 126 Publication 17 (2021)
• IRS.gov/Help: A variety of
tools to help you get answers
to some of the most common
tax questions.
• IRS.gov/ITA: The Interactive
Tax Assistant, a tool that will
ask you questions and, based
on your input, provide an-
swers on a number of tax law
topics.
• IRS.gov/Forms: Find forms,
instructions, and publications.
You will find details on 2021
tax changes and hundreds of
interactive links to help you
find answers to your ques-
tions.
• You may also be able to ac-
cess tax law information in
your electronic filing software.
Need someone to prepare your
tax return? There are various
types of tax return preparers, in-
cluding tax preparers, enrolled
agents, certified public account-
ants (CPAs), attorneys, and many
others who don’t have professional
credentials. If you choose to have
someone prepare your tax return,
choose that preparer wisely. A paid
tax preparer is:
• Primarily responsible for the
overall substantive accuracy
of your return,
• Required to sign the return,
and
• Required to include their pre-
parer tax identification number
(PTIN).
Although the tax preparer al-
ways signs the return, you're ulti-
mately responsible for providing all
the information required for the
preparer to accurately prepare
your return. Anyone paid to pre-
pare tax returns for others should
have a thorough understanding of
tax matters. For more information
on how to choose a tax preparer,
go to Tips for Choosing a Tax
Preparer on IRS.gov.
Advance child tax credit pay-
ments. From July through Decem-
ber 2021, advance payments were
sent automatically to taxpayers
with qualifying children who met
certain criteria. The advance child
tax credit payments were early
payments of up to 50% of the esti-
mated child tax credit that taxpay-
ers may properly claim on their
2021 returns. Go to IRS.gov/
AdvCTC for more information
about these payments and how
they can affect your taxes.
Coronavirus. Go to IRS.gov/
Coronavirus for links to information
on the impact of the coronavirus,
as well as tax relief available for in-
dividuals and families, small and
large businesses, and tax-exempt
organizations.
Employers can register to use
Business Services Online. The
Social Security Administration
(SSA) offers online service at
SSA.gov/employer for fast, free,
and secure online W-2 filing op-
tions to CPAs, accountants, enrol-
led agents, and individuals who
process Form W-2, Wage and Tax
Statement, and Form W-2c, Cor-
rected Wage and Tax Statement.
IRS social media. Go to IRS.gov/
SocialMedia to see the various so-
cial media tools the IRS uses to
share the latest information on tax
changes, scam alerts, initiatives,
products, and services. At the IRS,
privacy and security are our high-
est priority. We use these tools to
share public information with you.
Don’t post your social security
number (SSN) or other confidential
information on social media sites.
Always protect your identity when
using any social networking site.
The following IRS YouTube
channels provide short, informative
videos on various tax-related top-
ics in English, Spanish, and ASL.
• Youtube.com/irsvideos.
• Youtube.com/
irsvideosmultilingua.
• Youtube.com/irsvideosASL.
Watching IRS videos. The IRS
Video portal (IRSVideos.gov) con-
tains video and audio presenta-
tions for individuals, small busi-
nesses, and tax professionals.
Online tax information in other
languages. You can find informa-
tion on IRS.gov/MyLanguage if
English isn’t your native language.
Free Over-the-Phone Interpreter
(OPI) Service. The IRS is com-
mitted to serving our multilingual
customers by offering OPI serv-
ices. The OPI Service is a federally
funded program and is available at
Taxpayer Assistance Centers
(TACs), other IRS offices, and ev-
ery VITA/TCE return site. OPI
Service is accessible in more than
350 languages.
Accessibility Helpline available
for taxpayers with disabilities.
Taxpayers who need information
about accessibility services can
call 833-690-0598. The Accessibil-
ity Helpline can answer questions
related to current and future acces-
sibility products and services avail-
able in alternative media formats
(for example, braille, large print,
audio, etc.).
Getting tax forms and publica-
tions. Go to IRS.gov/Forms to
view, download, or print all of the
forms, instructions, and publica-
tions you may need. Or, you can
go to IRS.gov/OrderForms to place
an order.
Getting tax publications and in-
structions in eBook format. You
can also download and view popu-
lar tax publications and instructions
(including the Instructions for Form
1040) on mobile devices as
eBooks at IRS.gov/eBooks.
Note. IRS eBooks have been
tested using Apple's iBooks for
iPad. Our eBooks haven’t been
tested on other dedicated eBook
readers, and eBook functionality
may not operate as intended.
Access your online account (in-
dividual taxpayers only). Go to
IRS.gov/Account to securely ac-
cess information about your federal
tax account.
• View the amount you owe and
a breakdown by tax year.
• See payment plan details or
apply for a new payment plan.
• Make a payment or view 5
years of payment history and
any pending or scheduled
payments.
• Access your tax records, in-
cluding key data from your
most recent tax return, your
EIP amounts, and transcripts.
• View digital copies of select
notices from the IRS.
• Approve or reject authoriza-
tion requests from tax profes-
sionals.
• View your address on file or
manage your communication
preferences.
Tax Pro Account. This tool lets
your tax professional submit an au-
thorization request to access your
individual taxpayer IRS online
account. For more information, go
to IRS.gov/TaxProAccount.
Using direct deposit. The fastest
way to receive a tax refund is to file
electronically and choose direct
deposit, which securely and elec-
tronically transfers your refund di-
rectly into your financial account.
Direct deposit also avoids the pos-
sibility that your check could be
lost, stolen, or returned undelivera-
ble to the IRS. Eight in 10 taxpay-
ers use direct deposit to receive
their refunds. If you don’t have a
bank account, go to IRS.gov/
DirectDeposit for more information
on where to find a bank or credit
union that can open an account on-
line.
Getting a transcript of your re-
turn. The quickest way to get a
copy of your tax transcript is to go
to IRS.gov/Transcripts. Click on ei-
ther “Get Transcript Online” or “Get
Transcript by Mail” to order a free
copy of your transcript. If you pre-
fer, you can order your transcript
by calling 800-908-9946.
Reporting and resolving your
tax-related identity theft issues.
• Tax-related identity theft hap-
pens when someone steals
your personal information to
commit tax fraud. Your taxes
can be affected if your SSN is
used to file a fraudulent return
or to claim a refund or credit.
• The IRS doesn’t initiate con-
tact with taxpayers by email,
text messages, telephone
calls, or social media chan-
nels to request personal or fi-
nancial information. This in-
cludes requests for personal
identification numbers (PINs),
passwords, or similar informa-
tion for credit cards, banks, or
other financial accounts.
• Go to IRS.gov/IdentityTheft,
the IRS Identity Theft Central
webpage, for information on
identity theft and data security
protection for taxpayers, tax
professionals, and busi-
nesses. If your SSN has been
lost or stolen or you suspect
you’re a victim of tax-related
identity theft, you can learn
what steps you should take.
• Get an Identity Protection PIN
(IP PIN). IP PINs are six-digit
numbers assigned to taxpay-
ers to help prevent the misuse
of their SSNs on fraudulent
federal income tax returns.
When you have an IP PIN, it
prevents someone else from
filing a tax return with your
SSN. To learn more, go to
IRS.gov/IPPIN.
Ways to check on the status of
your refund.
• Go to IRS.gov/Refunds.
• Download the official IRS2Go
app to your mobile device to
check your refund status.
• Call the automated refund hot-
line at 800-829-1954.
Note. The IRS can’t issue re-
funds before mid-February 2022
for returns that claimed the EIC or
the additional child tax credit
(ACTC). This applies to the entire
refund, not just the portion associ-
ated with these credits.
Making a tax payment. Go to
IRS.gov/Payments for information
Publication 17 (2021) Page 127
on how to make a payment using
any of the following options.
• IRS Direct Pay: Pay your indi-
vidual tax bill or estimated tax
payment directly from your
checking or savings account
at no cost to you.
• Debit or Credit Card: Choose
an approved payment pro-
cessor to pay online or by
phone.
• Electronic Funds Withdrawal:
Schedule a payment when fil-
ing your federal taxes using
tax return preparation soft-
ware or through a tax profes-
sional.
• Electronic Federal Tax
Payment System: Best option
for businesses. Enrollment is
required.
• Check or Money Order: Mail
your payment to the address
listed on the notice or instruc-
tions.
• Cash: You may be able to pay
your taxes with cash at a par-
ticipating retail store.
• Same-Day Wire: You may be
able to do same-day wire from
your financial institution. Con-
tact your financial institution
for availability, cost, and time
frames.
Note. The IRS uses the latest
encryption technology to ensure
that the electronic payments you
make online, by phone, or from a
mobile device using the IRS2Go
app are safe and secure. Paying
electronically is quick, easy, and
faster than mailing in a check or
money order.
What if I can’t pay now? Go to
IRS.gov/Payments for more infor-
mation about your options.
• Apply for an online payment
agreement (IRS.gov/OPA) to
meet your tax obligation in
monthly installments if you
can’t pay your taxes in full to-
day. Once you complete the
online process, you will re-
ceive immediate notification of
whether your agreement has
been approved.
• Use the Offer in Compromise
Pre-Qualifier to see if you can
settle your tax debt for less
than the full amount you owe.
For more information on the
Offer in Compromise pro-
gram, go to IRS.gov/OIC.
Filing an amended return. You
can now file Form 1040-X electron-
ically with tax filing software to
amend 2019 or 2020 Forms 1040
and 1040-SR. To do so, you must
have e-filed your original 2019 or
2020 return. Amended returns for
all prior years must be mailed. Go
to IRS.gov/Form1040X for informa-
tion and updates.
Checking the status of your
amended return. Go to IRS.gov/
WMAR to track the status of Form
1040-X amended returns.
Note. It can take up to 3 weeks
from the date you filed your amen-
ded return for it to show up in our
system, and processing it can take
up to 16 weeks.
Understanding an IRS notice or
letter you’ve received. Go to
IRS.gov/Notices to find additional
information about responding to an
IRS notice or letter.
You can use Schedule LEP,
Request for Change in Language
Preference, to state a preference
to receive notices, letters, or other
written communications from the
IRS in an alternative language,
when these are available. Once
your Schedule LEP is processed,
the IRS will determine your transla-
tion needs and provide you transla-
tions when available. If you have a
disability requiring notices in an ac-
cessible format, see Form 9000.
Contacting your local IRS office.
Keep in mind, many questions can
be answered on IRS.gov without
visiting an IRS TAC. Go to
IRS.gov/LetUsHelp for the topics
people ask about most. If you still
need help, IRS TACs provide tax
help when a tax issue can’t be han-
dled online or by phone. All TACs
now provide service by appoint-
ment, so you’ll know in advance
that you can get the service you
need without long wait times. Be-
fore you visit, go to IRS.gov/
TACLocator to find the nearest
TAC and to check hours, available
services, and appointment options.
Or, on the IRS2Go app, under the
Stay Connected tab, choose the
Contact Us option and click on “Lo-
cal Offices.”
The Taxpayer
Advocate Service
(TAS) Is Here To
Help You
What Is TAS?
TAS is an independent organiza-
tion within the IRS that helps tax-
payers and protects taxpayer
rights. Their job is to ensure that
every taxpayer is treated fairly and
that you know and understand your
rights under the Taxpayer Bill of
Rights.
How Can You Learn
About Your Taxpayer
Rights?
The Taxpayer Bill of Rights de-
scribes 10 basic rights that all tax-
payers have when dealing with the
IRS. Go to
TaxpayerAdvocate.IRS.gov to help
you understand what these rights
mean to you and how they apply.
These are your rights. Know them.
Use them.
What Can TAS Do for
You?
TAS can help you resolve prob-
lems that you can’t resolve with the
IRS. And their service is free. If you
qualify for their assistance, you will
be assigned to one advocate who
will work with you throughout the
process and will do everything pos-
sible to resolve your issue. TAS
can help you if:
• Your problem is causing finan-
cial difficulty for you, your fam-
ily, or your business;
• You face (or your business is
facing) an immediate threat of
adverse action; or
• You’ve tried repeatedly to
contact the IRS but no one
has responded, or the IRS
hasn’t responded by the date
promised.
How Can You Reach
TAS?
TAS has offices in every state, the
District of Columbia, and Puerto
Rico. Your local advocate’s num-
ber is in your local directory and at
TaxpayerAdvocate.IRS.gov/
Contact-Us. You can also call them
at 877-777-4778.
How Else Does TAS Help
Taxpayers?
TAS works to resolve large-scale
problems that affect many taxpay-
ers. If you know of one of these
broad issues, report it to them at
IRS.gov/SAMS.
TAS for Tax
Professionals
TAS can provide a variety of infor-
mation for tax professionals, in-
cluding tax law updates and guid-
ance, TAS programs, and ways to
let TAS know about systemic prob-
lems you’ve seen in your practice.
Low Income
Taxpayer Clinics
(LITCs)
LITCs are independent from the
IRS. LITCs represent individuals
whose income is below a certain
level and need to resolve tax prob-
lems with the IRS, such as audits,
appeals, and tax collection dis-
putes. In addition, LITCs can pro-
vide information about taxpayer
rights and responsibilities in differ-
ent languages for individuals who
speak English as a second lan-
guage. Services are offered for
free or a small fee for eligible tax-
payers. To find an LITC near you,
go to TaxpayerAdvocate.IRS.gov/
about-us/Low-Income-Taxpayer-
Clinics-LITC or see IRS Pub. 4134,
Low Income Taxpayer Clinic List.
To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.Index
10% tax for early withdrawal from
IRA or retirement
plan (See Early withdrawal from
deferred interest account,
subheading: Tax on)
2021 Tax Rate Schedules 124
401(k) plans:
Tax treatment of contributions 50
403(b) plans:
Rollovers 83, 89
529 plans (See Qualified tuition
programs)
59 1/2 rule:
Age 59 1/2 rule 86
60-day rule 82
72 rule:
Age 72 rule 84
A
Abroad, citizens traveling or
working 8, 52
(See also Foreign employment)
Absence, temporary 29, 34
Accelerated death benefits 69
Accidental death benefits 49
Accident insurance 48
Cafeteria plans 53
Long-term care 48, 54
Accounting methods 13
Accrual method (See Accrual
method taxpayers)
Cash method (See Cash method
taxpayers)
Page 128 Publication 17 (2021)
Accounting periods 13
Calendar year 11, 13, 48
Change in, standard deduction
not allowed 91
Fiscal year 13, 42
Fringe benefits 48
Accrual method taxpayers 13
Taxes paid during tax year,
deduction of 95
Accuracy-related penalties 20
Activities not for profit 73
Address 17
Change of 19
Foreign 17
P.O. box 17
Adjusted gross income (AGI):
Modified (See Modified adjusted
gross income (MAGI))
Retirement savings contribution
credit 23
Adjustments 106
Administrators,
estate (See Executors and
administrators)
Adopted child 28, 34, 37
Adoption:
ATIN 14
Child tax credit 109
Credits:
Married filing separately 23
Employer assistance 49
Taxpayer identification
number 14, 37
Age:
Children's
investments (See Children,
subheading: Investment
income of child under age 18)
Gross income and filing
requirements (Table 1-1) 6
IRAs:
Distribution prior to age
59 1/2 86
Distribution required at age
72 84, 86
Roth IRAs 87, 90
Standard deduction for age 65 or
older 91
Agents:
Income paid to 13
Signing return 15
Age test 28
Agricultural workers (See Farmers)
Agriculture (See Farming)
Alaska Permanent Fund
dividends 73
Alaska Unemployment
Compensation Fund 96
Alcoholic beverages:
IRA prohibited transactions in 85
Aliens:
Dual-status (See Dual-status
taxpayers)
Filing required 8
Nonresident (See Nonresident
aliens)
Resident (See Resident aliens)
Alimony:
Reporting of income 73
Alternative filing methods:
Electronic (See E-file)
Alternative minimum tax
(AMT) 106
Ambulance service personnel:
Life insurance proceeds when
death in line of duty 69
Amended returns 19
(See also Form 1040-X)
Itemized deduction, change to
standard deduction 93
Standard deduction, change to
itemized deductions 93
American citizens abroad 7
(See also Citizens outside U.S.)
Employment (See Foreign
employment)
American Indians (See Indians)
American Samoa:
Income from 8
Annuities:
Decedent's unrecovered
investment in 14
IRAs as 77
Unrecovered investment 104
Withholding 14, 40
Annulled marriages:
Filing status 22
Anthrax incidents (See Terrorist
attacks)
Antiques (See Collectibles)
Appraisal fees 100
Archer MSAs 75
Contributions 48
Armed Forces:
(See also Veterans benefits)
Combat zone:
Extension to file return 12
Signing return for spouse 23
Dependency allotments 35
Disability pay 52
Disability pensions 53
GI Bill benefits 36
Military quarters allotments 35
Real estate taxes when receiving
housing allowance 97
Rehabilitative program
payments 52
Retiree's pay withholding 38
Retirees' pay:
Taxable income 52
Wages 52
Assistance (See Tax help)
Assistance, tax (See Tax help)
ATIN (Adoption taxpayer
identification number) 14
Attachment of wages 13
Attachments to return 14
Attorney contingency fee:
As income 73
Attorney fees, whistleblower
awards:
As income 73
Attorneys' fees 101, 102
Automatic extension of time to
file 11, 12
Form 4868 11
Awards (See Prizes and awards)
B
Babysitting 47
Back pay, award for 47
Emotional distress damages
under title VII of Civil Rights
Act of 1964 73
Backup withholding 40, 44, 55
Penalties 41
Bad debts:
Claim for refund 20
Recovery 69
Balance due 106
Bankruptcy:
Canceled debt not deemed to be
income 68
Banks:
IRAs with 77
Barter income 67
Definition of bartering 67
Form 1099-B 67
Basis:
Cost basis:
IRAs for nondeductible
contributions 81, 84
Beneficiaries 74
(See also Trust beneficiaries)
(See also Estate beneficiaries)
Bequests 74, 75
(See also Estate beneficiaries)
(See also Inheritance)
Birth of child 29
Head of household, qualifying
person to file as 25, 26
Social security number to be
obtained 37
Birth of dependent 34
Blind persons:
Exemption from withholding 39
Standard deduction for 91, 92
Bonds:
Amortization of premium 103
Issued at discount 60
Original issue discount 60
Sale of 60
Savings 57
Tax-exempt 60
Bonuses 39, 47, 75
Bookkeeping (See Recordkeeping
requirements)
Breach of contract:
Damages as income 73
Bribes 73, 101
Brokers:
IRAs with 77
Commissions 78
Burial expenses 101
Business expenses:
Job search expenses 75
Reimbursements 39, 47
Returning excess business
expenses 39
Business tax credits:
Claim for refund 20
C
Cafeteria plans 53
Calendar year taxpayers:
Accounting periods 11, 13, 48
Filing due date 11
California Nonoccupational
Disability Benefit Fund 96
Campaign contributions 73
Presidential Election Campaign
Fund 14
Campaign expenses 102
Canada:
Resident of 28, 34
Cancellation of debt 67
Exceptions to treatment as
income 68
Capital assets:
Coal and iron ore 71
Capital expenses 36
Capital gains or losses:
Hobbies, sales from
collections 75
Sale of personal items 76
Carpools 73
Carrybacks:
Business tax credit
carrybacks 20
Cars 50, 76
(See also Travel and transportation)
Personal property taxes on,
deduction of 99
Cash:
Rebates 73
Cash method taxpayers 13
Real estate transactions, tax
allocation 96
Taxes paid during tax year,
deduction of 95
Cash rebates 73
Casualty insurance:
Reimbursements from 73
Casualty losses 101, 103
Certificates of deposit (CDs) 61,
(See also Individual retirement
arrangements (IRAs))
Change of address 19
Change of name 13, 44
Chaplains:
Life insurance proceeds when
death in line of duty 69
Charitable contribution deduction:
Standard deduction 91
Charitable contributions:
Gifts to reduce public debt 17
Charitable distributions,
qualified 84
Checks:
Constructive receipt of 13
Check-writing fees 102
Child, qualifying 28
Child and dependent care credit:
Married filing separately 23
Child born alive 29
Child care:
Babysitting 47
Care providers 47
Expenses 36
Child custody 29
Children 49
(See also Adoption)
Additional child tax credit 110
Adoption (See Adopted child)
Babysitters 47
Birth of child:
Head of household, qualifying
person to file as 25, 26
Social security number to be
obtained 37
Care providers 47
Credit for 8
(See also Child tax credit)
Custody of 29
Death of child:
Head of household, qualifying
person to file as 25, 26
Dividends of (See this heading:
Investment income of child
under age 18)
Earnings of 8
Filing requirements:
As dependents (Table 1-2) 7
Gifts to 55
Investment income of child under
age 18:
Dependent filing requirements
(Table 1-2) 7
Interest and dividends 8
Parents' election to report on
Form 1040 or 1040-SR 8
Kidnapped 29, 33
Signing return, parent for
child 15
Standard deduction for 91, 92
Stillborn 29
Support of (See Child support)
Tax credit (See Child tax credit)
Transporting school children 76
Unearned income of 55
Child support 73
Child tax credit 8, 27, 107, 109,
Claiming the credit 110
Limit on credit 109
Limits 23
Married filing separately 23
Chronic illness:
Accelerated payment of life
insurance
proceeds (See Accelerated
death benefits)
Long-term care (See Long-term
care insurance contracts)
Citizen or resident test 28
Citizens outside U.S.:
Earned income exclusion 3
Employment (See Foreign
employment)
Extension of time to file 12
Filing requirements 7
Withholding from IRA
distributions 85
Civil suits 73
(See also Damages from lawsuits)
Civil tax penalties (See Penalties)
Clergy 8
Housing 51
Real estate taxes when
receiving housing
allowance 97
Life insurance proceeds when
chaplain died in line of
duty 69
Pensions 51
Special income rules 51
Clerical help, deductibility of 101
Coal and iron ore 71
Collectibles:
IRA investment in 85
Colleges and universities:
Education costs 75
(See also Qualified tuition
programs)
Combat zone:
Extension to file return 12
Signing return for spouse 23
Commissions 39
Advance 47
IRAs with brokers 78
Sharing of (kickbacks) 75
Unearned, deduction for
repayment of 47
Common law marriage 22
Community property 7, 58
IRAs 78
Married filing separately 24
Commuting expenses 102
Employer-provided commuter
vehicle 50
Publication 17 (2021) Page 129
Compensation 47
(See also Wages and salaries)
Defined for IRA purposes 77
Defined for Roth IRA
purposes 87
Employee 47
Miscellaneous compensation 47
Nonemployee 74
Unemployment 71
Computation of tax 14
Equal amounts 14
Negative amounts 14
Rounding off dollars 14
Confidential information:
Privacy Act and paperwork
reduction information 3
Constructive receipt of
income 13, 61
Contributions 17, 73
(See also Charitable contributions)
(See also Campaign contributions)
Nontaxable combat pay 77
Political 103
Reservist repayments 78
Convenience fees 101
Conversion (See specific retirement
or IRA plan)
Cooperative housing:
Real estate taxes, deduction
of 96
Taxes that are deductible
(Table 11-1) 98
Copyrights:
Infringement damages 73
Royalties 71
Corporations 69
(See also S corporations)
Director fees as self-employment
income 74
Corrections (See Errors)
Cost basis:
IRAs for nondeductible
contributions 81, 84
Cost-of-living allowances 48
Coupon bonds 61
Court awards and
damages (See Damages from
lawsuits)
Cousin 34
Credit cards:
Benefits, taxability of
insurance 73
Payment of taxes 3
Credit for child and dependent
care expenses 107
Credit for other dependents 107,
Claiming the credit 110
Limit on credit 109
Qualifying person 109
Credit for the elderly or the
disabled 107
Credit or debit cards:
Payment of taxes 12
Credits 105, 107
American opportunity 23
Child tax (See Child tax credit)
Credit for other dependents 107
Earned income (See Earned
income credit)
Lifetime learning (See Lifetime
learning credit)
Custodial fees 101
Custody of child 29
D
Damages from lawsuits 73
Dating your return 15
Daycare centers 47
(See also Child care)
Deadlines (See Due dates)
Death (See Decedents)
Death benefits:
Accelerated 69
Life insurance proceeds (See Life
insurance)
Public safety officers who died or
were killed in line of duty, tax
exclusion 69
Death of child 29
Death of dependent 34
Debt instruments (See Bonds or
Notes)
Debts 20, 69
(See also Bad debts)
Canceled (See Cancellation of
debt)
Nonrecourse 67
Paid by another 13
Public, gifts to reduce 17
Recourse 67
Refund offset against 10, 15
Deceased
taxpayers (See Decedents)
Decedents 7
(See also Executors and
administrators)
Deceased spouse 7
Due dates 11
Filing requirements 7
Savings bonds 58
Spouse's death 22
Standard deduction 91
Declaration of rights of taxpayers:
IRS request for information 3
Deductions 69, 91
(See also Recovery of amounts
previously deducted)
Casualty losses 103
Changing claim after filing, need
to amend 19
Itemizing (See Itemized
deductions)
Pass-through entities 101
Repayments 70
Social security and railroad
retirement benefits 66
Standard deduction 91, 93
Student loan interest
deduction (See Student
loans)
Theft loss 103
Deferred compensation:
Limit 50
Nonqualified plans 48
Delinquent taxes:
Real estate transactions, tax
allocation 97
Delivery services 11
De minimis benefits 49
Dependents 8, 27
(See also Child tax credit)
Birth of 34
Born and died within year 13, 37
Death of 34
Filing requirements:
Earned income, unearned
income, and gross income
levels (Table 1-2) 7
Married, filing joint return 28, 30
Qualifying child 28
Qualifying relative 33
Social security number 13
Adoption taxpayer
identification number 14,
Alien dependents 37
Standard deduction for 92
Dependents not allowed to claim
dependents 28
Dependent taxpayer test 28
Depletion allowance 71
Deposits:
Loss on 101
Depreciation:
Home computer 101
Differential wage payments 48
Differential wages:
Wages for reservists:
Military reserves 52
Direct deposit of refunds 15
Directors' fees 74
Disabilities, persons with:
Accrued leave payment 53
Armed Forces 52
Blind (See Blind persons)
Cafeteria plans 53
Credit for (See Elderly or
disabled, credit for)
Insurance costs 53
Military and government
pensions 53
Public assistance benefits 72
Reporting of disability pension
income 53
Retirement, pensions, and
profit-sharing plans 53
Signing of return by
court-appointed
representative 15
Social security and railroad
retirement benefits,
deductions for 66
Workers' compensation 54
Disabled:
Child 29
Dependent 34
Disaster Assistance Act of 1988:
Withholding 40
Disaster relief 53, 72
(See also Terrorist attacks)
Disaster Relief and Emergency
Assistance Act:
Grants 72
Unemployment
assistance 71
Grants or payments 72
Disclosure statement 21
Discount, bonds and notes issued
at 60
Distributions:
Qualified charitable 84
Required minimum
distributions 82, 84
(See also Individual retirement
arrangements (IRAs))
Dividends:
Alaska Permanent
Fund (See Alaska Permanent
Fund dividends)
Fees to collect 101
Stockholder debts when canceled
as 68
Divorced parents 29, 33
Divorced taxpayers 73
(See also Alimony)
Child custody 29
Estimated tax payments 45
Filing status 22, 23
IRAs 78, 83
Real estate taxes, allocation
of 97
Domestic help, can’t be claimed
as dependent 27
Domestic help:
Withholding 38
Donations (See Charitable
contributions)
Down payment assistance 73
Dual-status taxpayers 8
Joint returns not available 23
Standard deduction 91
Due dates 10, 11
2020 dates (Table 1-5) 11
Extension (See Extension of time
to file)
Nonresident aliens' returns 11
Dues:
Club 102
Dwelling units:
Cooperative (See Cooperative
housing)
E
Early withdrawal from deferred
interest account:
Higher education expenses,
exception from penalty 77
IRAs:
Early distributions,
defined 86
Penalties 84, 86
Earned income:
Defined:
For purposes of standard
deduction 92
Dependent filing requirements
(Table 1-2) 7
Earned income credit 107
Filing claim 8
Married filing separately 23
Education:
Savings bond program 59
Educational assistance:
Employer-provided 49
Scholarships (See Scholarships
and fellowships)
Tuition (See Qualified tuition
programs)
Education credits:
Married filing separately 23
Education expenses:
Employer-provided (See Educatio
nal assistance)
Tuition (See Qualified tuition
programs)
E-file 3, 6, 9
Extensions of time to file 11
On time filing 11
EIC (See Earned income credit)
Elderly or disabled, credit for:
Married filing separately 23
Elderly persons:
Credit for (See Elderly or
disabled, credit for)
Exemption from withholding 39
Home for the aged 35
Long-term care (See Long-term
care insurance contracts)
Nutrition Program for the
Elderly 73
Standard deduction for age 65 or
older 91
Tax Counseling for the
Elderly 10
Election precinct officials:
Fees, reporting of 74
Elective deferrals:
Limits 50
Electronic filing (See E-file)
Electronic payment options 3
Electronic reporting:
Returns (See E-file)
Embezzlement:
Reporting embezzled funds 75
Emergency medical service
personnel:
Life insurance proceeds when
death in line of duty 69
Emotional distress damages 73
Employee benefits 48, 49
(See also Fringe benefits)
Employee business expenses:
Reimbursements 39, 47
Returning excess 39
Employee expenses:
Home computer 101
Miscellaneous 100
Employees 39, 48, 49
(See also Fringe benefits)
Awards for service 47
Business
expenses (See Employee
business expenses)
Form W-4 to be filled out when
starting new job 39
Fringe benefits 40
Jury duty pay 75
Overseas
employment (See Foreign
employment)
Employers:
Educational assistance
from (See Educational
assistance)
E-file options 10
Form W-4, having new
employees fill out 39
Overseas
employment (See Foreign
employment)
Withholding rules 39
Employment:
Agency fees 74
Taxes:
FICA withholding 12
(See also Withholding)
Employment taxes 37, 38, 44
Endowment proceeds 69
Energy assistance 73
Energy conservation:
Measures and modifications 74
Subsidies 74
Utility rebates 76
Equitable relief (See Innocent
spouse relief)
Errors:
Corrected wage and tax
statement 44
Discovery after filing, need to
amend return 19
Page 130 Publication 17 (2021)
Errors (Cont.)
Refunds 18
Escrow:
Taxes placed in, when
deductible 97
Estate beneficiaries:
IRAs (See Individual retirement
arrangements (IRAs))
Losses of estate 74
Receiving income from estate 74
Estates 74
(See also Estate beneficiaries)
Income 74
Tax 99, 103
(See also Estate tax)
Estate tax:
Deduction 99
Estimated:
Credit for 44
Payment vouchers 43
Estimated tax 37
Amount to pay to avoid
penalty 42
Avoiding 41
Change in estimated tax 43
Credit for 37, 44
Definition 37
Divorced taxpayers 45
Figuring amount of tax 41
First period, no income subject to
estimated tax in 42
Fiscal year taxpayers 42
Married taxpayers 41
Name change 44
Not required 41
Overpayment applied to 15
Payments 16, 43
Figuring amount of each
payment 43
Schedule 42
When to start 42
Who must make 41
Payment vouchers 43
Penalty for underpayment 37,
43, 45
Saturday, Sunday, holiday
rule 42
Separate returns 45
Social security or railroad
retirement benefits 64
State and local income taxes,
deduction of 95
Unemployment
compensation 72
Excise taxes 84
(See also Penalties)
Deductibility (Table 11-1) 98
IRAs for failure to take minimum
distributions 84
Roth IRAs 89
Exclusions from gross income:
Accelerated death benefits 69
Canceled debt 68
Commuting benefits for
employees 50
De minimis benefits 49
Disability pensions of federal
employees and military 53
Educational assistance from
employer 49
Education Savings Bond
Program 75
Elective deferrals, limit on
exclusion 50
Employee awards 47
Energy conservation
subsidies 74, 76
Foreign earned income 3
Frozen deposit interest 75
Group-term life insurance 50
Long-term care insurance
contracts 54
Parking fees,
employer-provided 50
Public safety officers who died or
were killed in line of duty,
death benefits 69
Sale of home 76
Scholarships 76
Strike benefits 76
Executors and administrators 7
Exempt-interest dividends 56
Exemptions:
From withholding 39
Expenses paid by another 74
Extension of time to file 11
Automatic 11, 12
Citizens outside U.S. 12
E-file options 11
Inclusion on return 12
F
Failure to comply with tax
laws (See Penalties)
Fair rental value 36
Family 8, 109
(See also Children)
(See also Child tax credit)
Farmers:
Estimated tax 41
Withholding 38
Farming:
Activity not for profit 73
Canceled debt, treatment of 68
Federal employees:
Accrued leave payment 48
Cost-of-living allowances 48
Disability pensions 53
Based on years of service 53
Exclusion, conditions for 53
Terrorist attack 53
FECA payments 54
Federal Employees'
Compensation Act (FECA)
payments 54
Federal government:
Employees (See Federal
employees)
Federal income tax:
Not deductible:
Deductibility (Table 11-1) 98
Federal judges:
Employer retirement plan
coverage 79
Fees 74
(See also specific types of
deductions and income)
Professional license 103
Fellowships (See Scholarships and
fellowships)
FICA withholding 12, 37, 48
(See also Withholding)
(See also Social security and
Medicare taxes)
Fiduciaries 7, 78
(See also Executors and
administrators)
(See also Trustees)
Fees for services 74
Prohibited transactions 85
Figuring taxes and credits 63, 105
(See also Worksheets)
Filing requirements 6–21, 23
(See also Married filing separately)
Calendar year filers 11
Citizens outside U.S. 7
Dependents 7, 8
Electronic (See E-file)
Extensions 11
Gross income levels
(Table 1-1) 6
Individual taxpayers 7
Joint filing 22, 23
(See also Joint returns)
Late filing
penalties (See Penalties)
Most taxpayers (Table 1-1) 6
Unmarried persons (See Single
taxpayers)
When to file 11
Where to file 17
Who must file 7, 8
Filing status 7, 22–26
Annulled marriages 22
Change to, after time of filing 19
Divorced taxpayers 22
Head of household 22, 24
Qualifying person to file
as 25
Joint returns 22
Married filing separately 23
Surviving spouse 22
Unmarried persons 7, 22
(See also Single taxpayers)
Final return for decedent:
Standard deduction 91
Financial institutions 77
(See also Banks)
Financially disabled persons 19
Fines 11, 20, 21
(See also Penalties)
Deductibility 102
Firefighters:
Life insurance proceeds when
death in line of duty 69
Volunteer firefighters:
IRAs 79
Fiscal year 13, 42
Fishermen:
Estimated tax 41
Indian fishing rights 75
Food benefits:
Nutrition program for the
elderly 73
Food stamps 35
Foreign employment 8, 52
Employment abroad 52
Social security and Medicare
taxes 52
U.S. citizen 52
Waiver of alien status 52
Foreign governments, employees
of 52
Foreign income:
Earned income exclusion 3
Reporting of 3
Foreign income taxes:
Deduction of 96
Form 1116 to claim credit 99
Schedule A or Form 1040 or
1040-SR reporting 99
Definition of 95
Foreign nationals (See Resident
aliens)
Foreign students 28
Forgiveness of
debt (See Cancellation of debt)
Form 11, 51, 62
1040 26, 107
1040, Schedule A:
Unearned commission,
deduction for repayment
of 47
1040, Schedule C:
Barter income 67
Child care providers 47
Corporate director fees 74
Forgiveness of debts 67
Foster-care providers 74
Kickbacks 75
Notary fees 74
Oil, gas, or mineral interest
royalties 71
Rental income and
expenses 70
1040, Schedule E:
Royalties 71
1040, Schedule SE 51
Alien taxpayer identification
numbers 37
Armed Forces' retirement
pay 52
Child care providers 47
Clergy pension 51
Corporate director fees 74
Disability retirement pay 53
FECA benefits 54
Foster-care providers 74
Kickbacks 75
Notary fees 74
Oil, gas, or mineral interest
royalties 71
Rental income and
expenses 70
Wages and salary
reporting 47
Workers' compensation 54
1040-NR:
Nonresident alien return 11
1040 or 1040-SR:
1040 or 1040-SR, Schedule A:
Charitable contributions 17
1040 or 1040-SR,
Schedule SE 8
Address 17
Attachments to 14
IRAs 85, 86
Presidential Election
Campaign Fund 14
Railroad retirement benefits,
reporting on 64
Social security benefits,
reporting on 64
Use of 22, 23
1040-X:
Amended individual
return 19
Annulled marriages 22
Change of filing status 24
Completing 19
Filing 19
Itemized deduction, change to
standard deduction 93
Standard deduction, change
to itemized deductions 93
1065:
Partnership income 69
1098:
Mortgage interest
statement 70
1099:
Taxable income report 13
1099-B:
Barter income 67
1099-C:
Cancellation of debt 67
1099-DIV:
Dividend income
statement 51
1099-G:
State tax refunds 69
1099-INT 55, 62
1099-MISC:
Nonemployee
compensation 74
1099-OID 60
1099-R:
IRA distributions 85, 87
Life insurance policy
surrendered for cash 68
Retirement plan
distributions 14
1120S:
S corporation income 69
2555 110
2848:
Power of attorney and
declaration of
representative 15, 23
3115 57
3800:
General business credit 20
4506 18
4506-T:
Tax return transcript
request 18
4868 11, 37
Automatic extension of time to
file 11, 37
Filing electronic form 12
Filing paper form 12
5329:
Required minimum
distributions, failure to
take 86, 87
56: Notice Concerning Fiduciary
Relationship 15
6251 106
8275:
Disclosure statement 21
8275-R:
Regulation disclosure
statement 21
8379:
Injured spouse claim 16
8606:
IRA contributions,
Nondeductible 77, 81, 85
IRA contributions,
Recharacterization of 84
8615 55
8814 55
8815 59
8818 59
8822:
Change of address 19
8839:
Qualified adoption
expenses 49
8853:
Accelerated death
benefits 69
Publication 17 (2021) Page 131
Form (Cont.)
Archer MSAs and long-term
care insurance
contracts 48
8857:
Innocent spouse relief 23
8879:
Authorization for E-file
provider to use
self-selected PIN 11
9465:
Installment agreement
request 17
Form 8919:
Uncollected social security
and Medicare tax on
wages 47
RRB-1042S:
Railroad retirement benefits
for nonresident aliens 62
RRB-1099:
Railroad retirement
benefits 62
SS-5:
Social security number
request 14, 37
SSA-1042S:
Social security benefits for
nonresident aliens 62
SSA-1099:
Social security benefits 62
W-2:
Election precinct officials'
fees 74
Employer-reported income
statement 12, 14, 47, 48,
Employer retirement plan
participation indicated 78
Fringe benefits 48, 49
W-2G:
Gambling winnings
withholding statement 75
W-4V:
Voluntary withholding
request 72
W-7:
Individual taxpayer
identification number
request 37
W-7A:
Adoption taxpayer
identification number
request 14, 37
Form(s) 1099 44
Form 1040:
Estimated tax payments 44
Gambling winnings 40
Overpayment offset against next
year's tax 43
Form 1040-ES:
Estimated tax 41, 44
Form 1040 or 1040-SR:
Foreign income taxes, deduction
of 99
Schedule A:
State and local income taxes,
deduction of 99
State benefit funds,
mandatory contributions
to 96
Taxes, deduction of 99
Schedule C:
Real estate or personal
property taxes on property
used in business,
deduction of 99
Schedule E:
Real estate or personal
property taxes on rental
property, deduction of 99
Schedule F:
Real estate or personal
property taxes on property
used in business,
deduction of 99
Self-employment tax, deduction
of 99
Form 1099-K:
Payment card and third-party
network transactions 76
Form 1099-MISC:
Withheld state and local
taxes 95
Form 1099-NEC:
Withheld state and local
taxes 95
Form 1099-R:
Withheld state and local taxes
shown on 95
Form 1099-S:
Real estate transactions
proceeds 97
Form 1116:
Foreign tax credit 99
Form 8332:
Release of exemption to
noncustodial parent 30
Form W-2:
Employer-reported income
statement 44
Filing with return 44
Separate form from each
employer 44
Withheld state and local
taxes 95
Form W-2c:
Corrected wage and tax
statement 44
Form W-2G:
Gambling winnings withholding
statement 40, 44
Withheld state and local taxes
shown on 95
Form W-4:
Employee withholding allowance
certificate 38, 39, 41
Form W-4S:
Sick pay withholding request 40
Form W-4V 40
Unemployment compensation,
voluntary withholding
request 40
Foster care:
Care providers' payments 74
Child tax credit 109
Difficulty-of-care payments 74
Emergency foster care,
maintaining space in home
for 74
Foster care payments and
expenses 30, 35
Foster child 28, 30, 34, 35
Foster Grandparent Program 52
Found property 74
Fraud:
Penalties 20, 39
Reporting anonymously to IRS 3
Fringe benefits:
Accident and health
insurance 48
Accounting period 48
Adoption, employer
assistance 49
Archer MSA contributions 48
De minimis benefits 49
Education assistance 49
Form W-2 48
Group-term life insurance
premiums 49
Holiday gifts 49
Retirement planning services 50
Taxable income 48
Transportation 50
Withholding 40
Frozen deposits:
Interest on 75
IRA rollover period extension 82
Funeral expenses 36
Funerals:
Clergy, payment for 51
Expenses 101
G
Gains and losses 23
(See also Losses)
Claim for refund for loss 20
Gambling (See Gambling
winnings and losses)
Hobby losses 75
Passive activity 24
(See also Passive activity)
Gambling winnings and
losses 75, 103
Withholding 40, 44
Garbage pickup:
Deductibility (Table 11-1) 98
Garnishment and attachment 13
Gas royalties 71
Gems:
IRA prohibited transactions in 85
General due dates, estimated
tax 42
GI Bill benefits 36
Gifts:
Holiday gifts 49
Not taxed 75
To reduce the public debt 17
Gift taxes:
Not deductible 99
Gold and silver:
IRA investments in 85
Government employees:
Federal (See Federal employees)
Grants, disaster relief 72
Gratuities (See Tip income)
Gross income:
Age, higher filing threshold after
65 7
Defined:
Filing requirements
(Table 1-1) 6
Dependent filing requirements
(Table 1-2) 7
Gross income test 34
Group-term life insurance:
Accidental death benefits 49
Definition 49
Exclusion from income:
Limitation on 49
Permanent benefits 49
Taxable cost, calculation of 49
Guam:
Income from 8
H
HAMP:
Home affordable modification:
Pay-for-performance 72
Handicapped
persons (See Disabilities,
persons with)
Head of household 22, 24
Health:
Flexible spending
arrangement 48
Health insurance 48
(See also Accident insurance)
Reimbursement arrangement 49
Savings account 49
Health coverage tax credit 8
Health insurance premiums 36
Health Spa 102
Help (See Tax help)
High income taxpayers:
Estimated tax 41
Hobbies 101
Activity not for profit 73
Losses 75
Holiday, deadline falling on 42
Holiday gifts 49
Home:
Aged, home for 35
Cost of keeping up 25
Worksheet 25
Security system 102
Homeowners' associations:
Charges:
Deductibility (Table 11-1) 98
Hope credit:
Married filing separately 23
Host or hostess 68
Household furnishings:
Antiques (See Collectibles)
Household members 22
(See also Head of household)
Household workers (See Domestic
help)
Household workers, can’t claim as
dependent 27
Housing 25
(See also Home)
Clergy 51
Cooperative (See Cooperative
housing)
I
Icons, use of 4, 5
Identity theft 3, 21
Illegal activities:
Reporting of 75
Income 47, 67, 73
(See also Wages and salaries)
(See also Alimony)
Bartering 67
Canceled debts 67
Constructive receipt of 13, 61
Gross 34
Illegal activities 76
Interest 54
Jury duty pay 75
Life insurance proceeds 68
Nonemployee compensation 74
Paid to agent 13
Paid to third party 13
Partnership 69
Prepaid 13
Recovery 69
Royalties 71
S corporation 69
Tax exempt 35
Underreported 19
Income-producing expenses 100
Income taxes:
Federal (See Federal income tax)
Foreign (See Foreign income
taxes)
State or local (See State or local
income taxes)
Indians:
Fishing rights 75
Taxes collected by tribal
governments, deduction
of 95
Individual retirement
arrangements (IRAs) 76, 77,
82, 87
(See also Rollovers)
(See also Roth IRAs)
Administrative fees 78, 101
Age 59 1/2 for distribution 86
Exception to rule 86
Age 72:
Distributions required at 84,
Compensation, defined 77
Contribution limits 78
Age 50 or older, 78
Under age 50, 78
Contributions 23, 24
Designating year for which
contribution is made 78
Excess 85
Filing before contribution is
made 78
Nondeductible 81
Not required annually 78
Roth IRA contribution for
same year 88
Time of 78
Withdrawal before filing due
date 84
Cost basis 81, 84
Deduction for 78
Participant covered by
employer retirement plan
(Table 9-1) 79
Participant not covered by
employer retirement plan
(Table 9-2) 80
Phaseout 79
Definition of 77
Distributions:
At age 59 1/2 86
Required minimum
distributions (See this
heading: Required
distributions)
Divorced taxpayers 83
Early distributions (See Early
withdrawal from deferred
interest account)
Employer retirement plan
participants 78, 79
Establishing account 77
Time of 77
Where to open account 77
Page 132 Publication 17 (2021)
Individual retirement arrangements (IRAs) (Cont.)
Excess contributions 85
Figuring modified AGI
(Worksheet 9-1) 81
Forms to use:
Form 1099-R for reporting
distributions 85
Form 8606 for nondeductible
contributions 77
Inherited IRAs 75, 81, 82
Required distributions 84
Interest on, treatment of 77
Kay Bailey Hutchison Spousal
IRAs 78, 79
Married couples (See this
heading: Kay Bailey
Hutchison Spousal IRAs)
Modified adjusted gross income
(MAGI):
Computation of 80
Effect on deduction if covered
by employer retirement
plan (Table 9-1) 79
Effect on deduction if not
covered by employer
retirement plan
(Table 9-2) 80
Worksheet 9-1 81
Nondeductible contributions 81
Early withdrawal 86
Tax on earnings on 81
Ordinary income, distributions
as 84
Penalties:
Early distributions (See Early
withdrawal from deferred
interest account)
Excess contributions 85
Form 8606 not filed for
nondeductible
contributions 77, 81
Overstatement of
nondeductible
contributions 81
Prohibited transactions 85
Required distributions, failure
to take 84, 86
Prohibited transactions 85
Recharacterization of
contribution 83
Reporting of:
Distributions 85
Recharacterization of
contributions 84
Required distributions 82, 84
Excess accumulations 86
Retirement savings contribution
credit 23
Self-employed persons 77
Taxability:
Distributions 84
Time of taxation 77
Transfers permitted 82
To Roth IRAs 82, 83
Trustee administrative fees 101
Trustee-to-trustee transfers 82
IRA to Roth IRA 89
Types of 77
Withdrawals:
Early (See Early withdrawal
from deferred interest
account)
Required (See this heading:
Required distributions)
Withholding 14, 40, 85
Individual taxpayer identification
number (ITIN) 14, 37
Individual taxpayers (See Single
taxpayers)
Information returns 12–14, 47, 48,
(See also Form W-2)
(See also Form 1099)
Partnerships to provide 69
Inheritance 74
(See also Estate beneficiaries)
IRAs (See Individual retirement
arrangements (IRAs))
Not taxed 75
Inheritance tax:
Deductibility of 99
Deduction 99
Injured spouse 16
Claim for refund 16
Innocent spouse relief:
Form 8857 23
Joint returns 23
Insolvency:
Canceled debt not deemed to be
income 68
Installment agreements 17
Insurance:
Accident (See Accident
insurance)
Life 40, 49
(See also Life insurance)
(See also Group-term life
insurance)
Reimbursements:
From casualty insurance 73
Insurance companies:
State delinquency proceedings,
IRA distributions not made
due to 86
Insurance premiums:
Life 36, 102
Medical 36
Paid in advance 56
Insurance proceeds:
Dividends, interest on 56
Installment payments 60
Life 60
Interest:
Fees to collect 101
Frozen deposits 56
Usurious 56
Interest income 54
Form 1099-INT 13
Frozen deposits, from 75
Recovery of income, on 70
Savings bonds 75
Tax refunds, from 18
Interest payments 70
(See also Mortgages)
Canceled debt including 67
Student loans deduction 23
Interference with business
operations:
Damages as income 73
Internal Revenue Service (IRS):
Fraud or misconduct of
employee, reporting
anonymously 3
International
employment (See Foreign
employment)
International organizations,
employees of 52
Internet:
Electronic filing over (See E-file)
Investments:
Fees 101
Seminars 102
IRAs (See Individual retirement
arrangements (IRAs))
Itemized deductions:
Changing from standard to
itemized deduction (or vice
versa) 93
Choosing to itemize 92, 93
Form 1040 to be used 70
Married filing separately 23, 93
One spouse has itemized 91
Recovery 70
Standard deduction to be
compared with 92
State tax, for 93
ITIN (See Individual taxpayer
identification number (ITIN))
ITINs (See Individual taxpayer
identification number (ITIN))
J
Job search:
Deduction of expenses for
Interviews 75
Joint accounts 55
Joint returns:
Accounting period 23
After separate return 24
Deceased spouse 22
Dependents on 34
Divorced taxpayers 23
Estimated tax 41
Extension for citizens outside
U.S. 12
Filing status 22
Fraud penalty 21
Guardian of spouse, signing
as 23
Injured spouse 16
Innocent spouse 23
Nonresident or dual-status alien
spouse 23
Responsibility for 23
Separate return after joint 24
Signing 15, 23
Social security and railroad
retirement benefits 66
State and local income taxes,
deduction of 96
Joint return test 28, 30
Judges, federal:
Employer retirement plan
coverage 79
Jury duty pay 75
K
Kickbacks 75
Kiddie tax (See Children,
subheading: Unearned income
of)
Kidnapped children:
Qualifying child 29
Qualifying relative 33
L
Labor unions 40
Dues and fees 76
Sick pay withholding under union
agreements 40
Strike and lockout benefits 76
Unemployment compensation
payments from 72
Late filing 3
Penalties 11, 20
Late payment:
Penalties on tax payments 20
Law enforcement officers:
Life insurance proceeds when
death in line of duty 69
Legal expenses 101, 102
Liability insurance:
Reimbursements from 73
License fees:
Deductibility of 99
Nondeductibility of 101
Life insurance 49, 69
(See also Group-term life insurance)
(See also Accelerated death
benefits)
Form 1099-R for surrender of
policy for cash 68
Premiums 102
Proceeds 60
As income 68
Public safety officers who died or
were killed in line of duty, tax
exclusion 69
Surrender of policy for cash 68
Withholding 40
Life insurance premiums 36
Lifetime learning credit:
Married filing separately 23
Limits:
Miscellaneous deductions 100
Loans 20
(See also Debts)
Lobbying expenses 102
Local assessments:
Deductibility of 98
Local income taxes, itemized
deductions 93
Local law violated 34
Lockout benefits 76
Lodging 36
Long-term care insurance
contracts 54
Chronically ill individual 54, 69
Exclusion, limit of 54
Qualified services defined 54
Losses 20, 24
(See also Gains and losses)
Capital 24
Casualty 101, 103
Gambling (See Gambling
winnings and losses)
Theft 101, 103
Lost property 102
Lotteries and raffles 75
(See also Gambling winnings and
losses)
M
MAGI (See Modified adjusted gross
income (MAGI))
Mailing returns (See Tax returns)
Married dependents, filing joint
return 28, 30
Married filing separately 23
Community property states 24
Credits, treatment of 23
Deductions:
Changing method from or to
itemized deductions 93
Treatment of 23
Earned income credit 23
How to file 23
Itemized deductions 23, 93
One spouse has itemized so
other must as well 91
Joint state and local income taxes
filed, but separate federal
returns 95
Rollovers 23
Social security and railroad
retirement benefits 64
State and local income taxes 95
Tenants by the entirety, allocation
of real estate taxes 97
Married taxpayers 22–24
(See also Joint returns)
(See also Married filing separately)
(See also Tenants by the entirety)
Age 65 or older spouse:
Standard deduction 92
Blind spouse:
Standard deduction 92
Deceased spouse 6, 7, 22
(See also Surviving spouse)
Dual-status alien spouse 23
Estimated tax 41
Filing status 6, 7, 22
IRAs 78
Spouse covered by employer
plan 78, 79
Living apart 22
Nonresident alien spouse 14, 23
Roth IRAs 87
Signatures when spouse unable
to sign 15
Social security or railroad
retirement benefits,
taxability 63
Mass transit passes,
employer-provided 50
Maximum age. The age restriction
for contributions to a
traditional IRA has been
eliminated.:
Traditional IRA contributions 76
Medical and dental expenses:
Reimbursements, treatment
of 54
Medical insurance (See Accident
insurance)
Medical insurance premiums 36
Medical savings accounts
(MSAs) 48, 75
(See also Archer MSAs)
Medicare Advantage MSA 75
Medicare 48, 52
(See also Social security and
Medicare taxes)
Benefits 73
Medicare Advantage
MSA (See Medical savings
accounts (MSAs))
Medicare taxes, not support 36
Member of household or
relationship test 34
Mentally incompetent persons 53
(See also Disabilities, persons with)
Signing of return by
court-appointed
representative 15
Publication 17 (2021) Page 133
Mexico:
Resident of 28, 34
Military (See Armed forces)
Mineral royalties 71
Ministers (See Clergy)
Miscellaneous deductions 99
Missing children:
Photographs of, included in IRS
publications 3
Mistakes (See Errors)
Modified adjusted gross income
(MAGI):
IRAs, computation for:
Effect on deduction if covered
by employer retirement
plan (Table 9-1) 79, 81
Effect on deduction if not
covered by employer
retirement plan
(Table 9-2) 80
Worksheet 9-1 81
Roth IRAs, computation for:
Phaseout (Table 9-3) 87
Worksheet 9-2 86
Money market certificates 56
Mortgage:
Relief 67
Mortgages:
Assistance payments 73
Discounted mortgage loan 67
Interest:
Refund of 70
MSAs (See Medical savings
accounts (MSAs))
Multiple support agreement 36
Municipal bonds 60
Mutual funds:
Nonpublicly offered 101
N
Name change 13, 44
National Housing Act:
Mortgage assistance 73
National of the United States 28
Native Americans (See Indians)
Negligence penalties 20
Net operating losses:
Refund of carryback 20
New Jersey Nonoccupational
Disability Benefit Fund 96
New Jersey Unemployment
Compensation Fund 96
New York Nonoccupational
Disability Benefit Fund 96
Nobel Prize 75
Nominees 55, 61
Nonemployee compensation 74
Nonresident aliens 8
Due dates 11
Estimated tax 41
Individual taxpayer identification
number (ITIN) 14
Spouse 14
Joint returns not available 23
Separated 24
Standard deduction 91
Taxpayer identification
number 37
Waiver of alien status 52
Northern Mariana Islands:
Income from 8
Notary fees 74
Notes:
Discounted 48, 60
Received for services 48
Not-for-profit activities 73
Nursing homes:
Insurance for care
in (See Long-term care
insurance contracts)
Nutrition Program for the
Elderly 73
O
OASDI 73
Occupational taxes:
Deduction of:
Taxes that are deductible
(Table 11-1) 98
Office rent, deductibility of 101
Offset against debts 10, 15
Oil, gas, and minerals:
Future production sold 71
Royalties from:
Schedule C or C-EZ 71
Sale of property interest 71
Options 51
Ordinary gain and loss (See Gains
and losses)
Original issue discount (OID) 60
Other taxes 106
Outplacement services 48
Overpayment of tax 15
(See also Tax refunds)
Overseas work (See Foreign
employment)
Overtime pay 39
P
Paper vs. electronic
return (See E-file)
Paperwork Reduction Act of
1980 3
Parental
responsibility (See Children)
Parents, divorced or
separated 29
Parents who never married 30
Parking fees:
Employer-provided fringe benefit:
Exclusion from income 50
Partners and partnerships 101
Income 69
Passive activity:
Losses 24
Pass-through entities 101
Patents:
Infringement damages 73
Royalties 71
Payment of estimated tax 43
By check or money order 43
Credit an overpayment 43
Payment of tax 3, 10, 16, 17, 19,
By credit or debit card 12
Delivery services 11
Estimated tax 16
Installment
agreements (See Installment
agreements)
Late payment penalties 20
Payments 106, 107
Disaster relief 72
Payroll deductions 99
Payroll taxes 48
(See also Social security and
Medicare taxes)
Peace Corps allowances 52
Penalties 43, 45
Accuracy-related 20
Backup withholding 41
Civil penalties 20
Criminal 21
Deductibility 102
Defenses 21
Estimated tax (See this heading:
Underpayment of estimated
tax)
Failure to include social security
number 14, 21
Failure to pay tax 20
Form 8606 not filed for
nondeductible IRA
contributions 77, 81
Fraud 20, 21
Frivolous tax submission 21
Interest on 16
IRAs:
Early distributions 86
Excess contributions 85
Form 8606 not filed for
nondeductible
contributions 77, 81
Overstatement of
nondeductible
contributions 81
Required distributions, failure
to take 84
Late filing 11, 20
Exception 20
Late payment 20
Negligence 20
Reportable transaction
understatements 21
Roth IRAs:
Conversion contributions
withdrawn in 5-year
period 90
Excess contributions 89
Substantial understatement of
income tax 21
Tax evasion 21
Underpayment of estimated
tax 37, 43, 45
Willful failure to file 21
Withholding 39, 41
Pennsylvania Unemployment
Compensation Fund 96
Pensions 38, 62
(See also Railroad retirement
benefits)
Clergy 51
Contributions:
Retirement savings
contribution credit 23
Taxation of 50
Decedent's unrecovered
investment in 14
Disability pensions 53
Elective deferral limitation 50
Employer plans:
Benefits from previous
employer's plan 79
Rollover to IRA 83, 89
Situations in which no
coverage 79
Inherited pensions 75
Military (See Armed Forces)
Unrecovered investment in 104
Withholding 14, 40
Per capita taxes:
Deductibility of 99
Personal exemption 37
Personal injury suits:
Damages from 73
Personal property:
Rental income from 70
Personal property taxes:
Deduction of 99
Schedule A, C, E, or F (Form
1040) 99
Taxes (See Personal property
taxes)
Personal
representatives (See Fiduciarie
s)
Persons with
disabilities (See Disabilities,
persons with)
Place for filing 17
Political campaign
expenses 102, 103
Political
contributions (See Campaign
contributions)
Power of attorney 15, 23
Premature distributions (See Early
withdrawal from deferred interest
account)
Prepaid:
Insurance 56
Preparers of tax returns 15
Presidential Election Campaign
Fund 14
Price reduced after purchase 68
Principal residence (See Home)
Privacy Act and paperwork
reduction information 3
Private delivery services 11
Prizes and awards 47, 75
(See also Bonuses)
Exclusion from income 47
Pulitzer, Nobel, and similar
prizes 75
Scholarship prizes 76
Professional license fees 103
Professional Reputation 103
Profit-sharing plans:
Withholding 14, 40
Property:
Found 74
Stolen 76
Public assistance benefits 72
Publications (See Tax help)
Public debt:
Gifts to reduce 17
Public transportation passes,
employer-provided 50
Puerto Rico:
Residents of 8
Pulitzer Prize 75
Punitive damages:
As income 73
Q
Qualified opportunity fund 75
Qualified plans 82
(See also Rollovers)
Qualified tuition programs 75
Qualifying child 28
Qualifying relative 33
R
Raffles 75
Railroad retirement
benefits 62–66, 75
Deductions related to 66
Employer retirement plans
different from 79
Equivalent tier 1 (social security
equivalent benefit
(SSEB)) 62, 75
Estimated tax 64
Form RRB-1042S for nonresident
aliens 62
Form RRB-1099 62
Joint returns 66
Lump-sum election 64
Married filing separately 23, 64
Repayment of benefits 63
Reporting of 64
Taxability of 63, 64
Withholding 40
Not tax deductible 99
Withholding for 64
Railroad Unemployment
Insurance Act 54
Real estate:
Canceled business debt,
treatment of 68
Division of real estate taxes 96
Form 1099-S to report sale
proceeds 97
Itemized charges for services not
deductible 98
Real estate-related items not
deductible 98
Transfer taxes 99
Real estate taxes:
Assessments (See Local
assessments)
Cooperative
housing (See Cooperative
housing)
deduction of 96
Deduction of:
List of deductible taxes
(Table 11-1) 98
Schedule A, C, E, or F (Form
1040) 99
Refund, treatment of 97
Rebates (See Refunds)
Recharacterization:
IRA contributions 83
Recordkeeping:
Gambling 104
Savings bonds used for
education 59
Recordkeeping requirements 17
Basic records 18
Copies of returns 17
Electronic records 17
Gambling 75
Period of retention 18
Proof of payments 18
Why keep records 17
Recovery of amounts previously
deducted 69
Itemized deductions 70
Mortgage interest refund 70
Over multiple years 70
Tax refunds 69
Refunds 106
State tax 69
Taxes (See Tax refunds)
Page 134 Publication 17 (2021)
Rehabilitative program
payments 52
Reimbursement 69
(See also Recovery of amounts
previously deducted)
Employee business
expenses 47
Relationship test 28, 34
Relative, qualifying 33
Relief fund contributions 103
Religious organizations 8, 51
(See also Clergy)
Rental income and expenses:
Increase due to higher real estate
taxes:
Deductibility (Table 11-1) 98
Losses from rental real estate
activities 24
Personal property rental 70
Repayments 70
Amount previously included in
income 104
Railroad retirement benefits 63
Social security benefits 63, 71
Unemployment
compensation 72
Reporting:
Rollovers 83
Required minimum
distributions 82, 84
(See also Individual retirement
arrangements (IRAs))
Required minimum distributions
(RMDs) 76
Rescue squad members:
Life insurance proceeds when
death in line of duty 69
Reservists:
IRAs 79
Repayments 78
Residency:
Home outside U.S. (See Citizens
outside U.S.)
Residency test 29
Resident aliens:
Estimated tax 41
IRA distributions, withholding
from 85
Social security number (SSN) 14
Spouse treated as 24
Retired Senior Volunteer
Program 52
Retirees:
Armed Forces:
Taxable income 52
Retirement planning services 50
Retirement plans 23, 38, 62
(See also Roth IRAs)
(See also Railroad retirement
benefits)
Clergy 51
Contributions:
Credit for (See Retirement
savings contribution
credit)
Taxation of 50
Decedent's unrecovered
investment in 14
Disability pensions 53
Elective deferral limitation 50
Employer plans:
Benefits from previous
employer's plan 79
Rollover to IRA 83, 89
Situations in which no
coverage 79
Inherited pensions 75
IRAs (See Individual retirement
arrangements (IRAs))
Military (See Armed Forces)
Withholding 14, 40
Retirement savings contribution
credit:
Adjusted gross income limit 23
Returns, tax (See Tax returns)
Rewards 76
Rhode Island Temporary
Disability Benefit Fund 96
Rollovers 82
Definition of 82
Excess due to incorrect rollover
information 86
From 403 plan to IRA 82
From employer's plan to IRA 82,
From IRA to IRA 82
From IRA to Roth IRA 89
From Roth IRA to Roth IRA 90
From section 457 plan to IRA 82
From SIMPLE IRA to Roth
IRA 90
Inherited IRAs 82
Married filing separately 23
Partial rollovers 82
Reporting:
From employer's plan to
IRA 83
IRA to IRA 82
Taxability 82, 87
Time limits (60-day rule) 82
Treatment of 82
Waiting period between 82
Roth IRAs 87–90
(See also Rollovers)
Age:
Distributions after age
59 1/2 90
No limit for contributions 87
No required distribution
age 90
Compensation, defined 87
Contribution limits 88
Age 50 or older, 88
Under age 50, 88
Contributions:
No deduction for 87
Roth IRA only 88
Time to make 89
To traditional IRA for same
year 88
Conversion 89
Definition of 87
Distributions:
Qualified distributions 90
Effect of modified AGI on
contributions (Table 9-3) 87
Establishing account 87
Excess contributions 89
IRA transfer to 82, 83
Modified adjusted gross income
(MAGI):
Computation (Worksheet
9-2) 86
Phaseout (Table 9-3) 87
Penalties:
Conversion contributions
withdrawn in 5-year
period 90
Excess contributions 89
Recharacterizations 83
Spousal contributions 87
Taxability 90
Withdrawals:
Excess contributions 89
Not taxable 90
Rounding off dollars 14
Royalties 71
S
Safe deposit box 101
Salaries (See Wages and salaries)
Sale of home 76
Division of real estate taxes 96
Sale of property:
Personal items 76
Sales and exchanges:
Bonds 60
Saturday, deadline falling on 42
Savings:
Bonds 57, 62
Bonds used for education 59
Certificate 56, 61
Schedule 17, 47, 51, 54
(See also Form 1040 or 1040-SR)
(See also Form 1040)
Form 1040, A-F, R, SE (See Form
1040)
K-1:
K-1, Form 1041 55
Partnership income 69
S corporation income 69
Schedule A (Form 1040):
Itemized deductions 93
Schedules A–F, R, SE (Form
1040) (See Form 1040)
Scholarships 30, 34, 36
Scholarships and fellowships:
Earned income including 92
Exclusion from gross income 76
Teaching or research
fellowships 76
S corporations 101
Shareholders 69
Section 457 deferred
compensation plans:
Rollovers:
To IRAs 83, 89
Securities:
Claim for refund 20
Options 51
Stock appreciation rights 48
Self-employed persons 99
(See also Self-employment tax)
Corporate directors as 74
Definition 8
Foreign government or
international organizations,
U.S. citizens employed by 8
Gross income 7
IRAs 77
Ministers 8
Nonemployee compensation 74
Self-employment tax:
Deduction of:
List of deductible taxes
(Table 11-1) 98
Seminars:
Investment-related 102
Senior Companion Program 52
Separated parents 29, 33
Separated taxpayers 22
Filing status 23, 24
IRAs 78
Nonresident alien spouse 24
Separate returns (See Married filing
separately)
SEPs (See Simplified employee
pensions (SEPs))
Series EE and E savings
bonds 57
Series HH and H savings
bonds 57
Series I savings bonds 57
Service charges 101
Service Corps of Retired
Executives (SCORE) 52
Severance pay 48
Accrued leave payment 48
Outplacement services 48
Short tax year:
Change in annual accounting
period 91
Sick pay:
Collective bargaining
agreements 40
FECA payments 54
Income 48
Railroad Unemployment
Insurance Act 54
Withholding 39, 40
Signatures 15
Agent, use of 15
Joint returns 23
Mentally incompetent 15
Parent for child 15
Physically disabled 15
Signing your return 9
Silver (See Gold and silver)
SIMPLE plans:
Rollover to Roth IRA 90
Simplified employee pensions
(SEPs):
IRAs as 77
Single taxpayers 22
Filing requirements 7
Filing status 7, 22
Gross income filing requirements
(Table 1-1) 6
Social security and Medicare
taxes:
Support, not included in 36
Social security benefits 35, 62, 66
Deductions related to 66
Employer retirement plans
different from 79
Estimated tax 64
Foreign employer 52
Form SSA-1042S for nonresident
aliens 62
Form SSA-1099 62
IRAs for recipients of benefits 79
Joint returns 66
Lump-sum election 64
Married filing separately 23, 64
Paid by employer 48
Repayment of benefits 63, 71
Repayments 101
Reporting of 64
Taxability of 63, 64
Withholding 40
Withholding for 64
Not deductible 99
Social security number (SSN) 13
Child's 3
Number to be obtained at
birth 37
Correspondence with IRS,
include SSN 14
Dependents 3, 13
Exception 13
Failure to include penalty 14
Form SS-5 to request number 14
Nonresident alien spouse 14
Resident aliens 14
Spouse 7, 14, 15, 22, 23, 68
(See also Married taxpayers)
(See also Surviving spouse)
Spouse's death 92
SSN (See Social security number
(SSN))
Stamps (See Collectibles)
Stamp taxes:
Real estate transactions and 99
Standard deduction 91, 93
State:
Obligations, interest on 60
State or local governments:
Employees:
Unemployment
compensation 72
State or local income taxes 93
Deduction of 95
List of deductible taxes
(Table 11-1) 98
Schedule A (Form 1040) 99
Electronic returns filed with
federal 10
Exception to deduction 95
Federal changes, effect on 20
Form W-2 to show withheld
taxes 95
Joint state and local returns but
federal returns filed
separately 95
Married filing separately 95
Refunds, treatment of 95, 96
State or local taxes:
Refunds 69
Statute of limitations:
Claim for refund 16
Claim for refunds 19
Stillborn child 29
Stock appreciation rights 48
Stock bonus plans 40
Stockholders 20
(See also Securities)
Debts 68
Stockholders' meeting
expenses 103
Stock options 51
Stocks 20
(See also Securities)
Stolen funds:
Reporting of 76
Stolen property 76
Strike benefits 76
Student loans:
Cancellation of debt 68
Interest deduction:
Married filing separately 23
Students:
Defined 28
Exemption from withholding 39
Foreign 28
Loans (See Student loans)
Scholarships (See Scholarships
and fellowships)
Tuition programs,
qualified (See Qualified tuition
programs)
Substitute forms 12
Sunday, deadline falling on 42
Supplemental wages 39
Publication 17 (2021) Page 135
Support test:
Qualifying child 30
Qualifying relative 35
Surviving spouse:
Filing status 22
With dependent child 25
Gross income filing requirements
(Table 1-1) 6
Life insurance proceeds paid
to 68
Single filing status 22
Tax (See Estate tax)
T
Tables and figures:
Estimated tax, who must make
payments (Figure 4-A) 42
Filing requirements:
Dependents (Table 1-2) 7
Gross income levels
(Table 1-1) 6
Head of household, qualifying
person (Table 2-1) 24
Individual retirement
arrangements (IRAs):
Figuring modified AGI
(Worksheet 9-1) 81
Modified AGI, effect on
deduction if covered by
retirement plan at work
(Table 9 -1) 79
Modified AGI, effect on
deduction if not covered
by retirement plan at work
(Table 9-2) 80
Roth IRAs, effect of modified
AGI on contributions
(Table 9-3) 87
Roth IRAs, modified AGI
(Worksheet 9-2) 86
Roth IRA and modified adjusted
gross income (MAGI)
phaseout (Table 9-3) 87
Standard deduction tables 94
Taxes that are deductible
(Table 11-1) 98
Tax returns:
Due dates (Table 1-5) 11
Steps to prepare
(Table 1-6) 12
Tax computation worksheet 123
Tax Counseling for the Elderly 10
Tax credits (See Credits)
Taxes, not support 36
Taxes 38, 95–99, 105
Alternative minimum 106
Business taxes, deduction of 95
Deduction of 95
Schedules to use 99
Types of taxes deductible
(Table 11-1) 98
Estate (See Estate tax)
Excise (See Excise taxes)
Federal income taxes, not
deductible 99
Foreign taxes 95
Income tax, deduction of 96
Gift taxes 99
How to figure
Income taxes, deduction of 95
Indian tribal government taxes,
deduction of 95
Inheritance tax 99
Kiddie tax (See Children,
subheading: Unearned
income of)
Not deductible 99
Personal property taxes:
Deduction of 99
Real estate taxes (See Real
estate taxes)
Tax evasion 21
Tax-exempt:
Bonds and other obligations 60
Income 103
Interest 60
Tax-exempt income 35
Tax figured by IRS 106
Tax help 5, 10, 126
Tax Counseling for the
Elderly 10
Volunteer counseling (Volunteer
Income Tax Assistance
program) 10, 52
Taxpayer identification number
(TIN):
Adoption (ATIN) 14
Individual (ITIN) 14, 37
Social security
number (See Social security
number (SSN))
Tax preference items 106
Tax rates 22
Married filing separately
(Schedule Y-2) 23
Tax refunds:
Agreement with IRS extending
assessment period, claim
based on 20
Bad debts 20
Business tax credit
carrybacks 20
Cashing check 15
Check's expiration date 15
Claim for 18–20
Limitations period 19
Litigation 20
Direct deposit 15
Erroneous refunds 18
Federal income tax refunds 69
Financially disabled 19
Foreign tax paid or accrued 20
General rules 10
Inquiries 10
Interest on 18, 20, 56
Late filed returns 3
Limits 19
Exceptions 20
More or less than expected 15
Net operating loss carryback 20
Offset:
Against debts 10, 15
Against next year's tax 15
Offset against next year's tax 43
Past-due 10, 18
Real estate taxes, treatment
of 97
Reduced 20
State and local income tax
refunds 95, 96
State liability, effect on 20
Under $1 15
Withholding 8
Worthless securities 20
Tax returns 11, 15, 23
(See also Due dates)
(See also Signatures)
(See also Joint Returns)
Tax Returns:
Aliens 8
Amended 19, 93
Attachments to returns 14
Child 15
Copies of 17
Dating of 15
Filing of 6
(See also Filing requirements)
Forms to use 8
Free preparation help 10
How to file 12
Mailing of 17
Paid preparer 15
Payment with 16
Private delivery services 11
Steps to prepare (Table 1-6) 12
Third party designee 14
Transcript of 18
Who must file 7, 8
Tax table 111–122
Tax year 11, 13
(See also Accounting periods)
Telephones 103
Fraud or misconduct of IRS
employee, number for
reporting anonymously 3
Temporary absences 29, 34
Tenants:
By the entirety 55
In common 55
Tenants by the entirety:
Real estate taxes, allocation
when filing separately 97
Terminal illness:
Accelerated payment of life
insurance
proceeds (See Accelerated
death benefits)
Viatical settlements 69
Terrorist attacks:
Disability pensions for federal
employees 53
Theft losses 101, 103
Third parties:
Designee for IRS to discuss
return with 14
Income from taxpayer's property
paid to 13
Tiebreaker rules 32
Tip income:
Allocated tips 39
Withholding 39
Underwithholding 39
Total support 35
Tour guides:
Free tour for organizing tour 74
Trade Act of 1974:
Trade readjustment allowances
under 71
Traditional IRAs (See Individual
retirement arrangements (IRAs))
Transfer taxes:
Real estate transactions and 99
Transit passes 50
Travel and transportation
expenses:
Commuting expenses:
Employer-provided commuter
vehicle 50
Expenses paid for others 103
Fringe benefits 50
Job search expenses 75
Parking fees:
Employer-provided fringe
benefit 50
School children, transporting
of 76
Transit pass 50
Treasury bills, notes, and
bonds 59
Treasury Inspector General:
Telephone number to report
anonymously fraud or
misconduct of IRS
employee 3
Treasury notes 56
Trust beneficiaries:
Losses of trust 74
Receiving income from trust 74,
Trustees:
Administrative fees 101
IRA 101
IRAs:
Fees 78
Transfer from trustee to
trustee 82, 89
Trusts 74
(See also Trust beneficiaries)
Grantor trusts 74
Income 74
TTY/TDD information 126
Tuition, benefits under GI Bill 36
Tuition:
Qualified
programs (See Qualified
tuition programs)
Tuition programs,
qualified (See Qualified tuition
programs)
U
U.S. citizen or resident 28
U.S. national 28
U.S. obligations, interest 56, 57
U.S. possessions:
Deduction of income tax paid
to 96
Income from 8
U.S. savings bonds:
Education, used for 23
Interest on 75
U.S. Treasury bills, notes, and
bonds 59
U.S. Virgin Islands:
Income from 8
Underpayment penalties 37, 43,
IRS computation 45
Unearned income:
Children 55
Unearned income of
child (See Children, subheading:
Unearned income of)
Unemployment compensation 71
Credit card insurance paying 73
Mandatory contributions to state
funds, deduction of 96
Private fund, from 72
Repayment of benefits 72
Reporting on Form 1040 72
Supplemental benefits 72
Voluntary benefit fund
contributions 103
Withholding 40, 72
Unions 40, 72, 76
(See also Labor unions)
Unmarried persons (See Single
taxpayers)
Usurious interest 56
Utilities:
Energy conservation
subsidies 74, 76
Rebates 76
V
Veterans' benefits:
Educational assistance 76
Veterans benefits 52
Retroactive determination 53
Special statute of limitations. 53
Viatical settlements 69
VISTA volunteers 52
Volunteer firefighters:
IRAs 79
Volunteer work 52
Tax counseling (Volunteer
Income Tax Assistance
program) 10, 52
Vouchers for payment of tax 43
W
W-2 form (See Form W-2)
Wages and salaries 12, 47–54
(See also Form W-2)
Accident and health
insurance 48
Accrued leave payment 48
Adoption, employer
assistance 49
Advance commissions 47
Allowances and
reimbursements 39, 47
Archer MSA contributions 48
Awards and prizes 47
Babysitting 47
Back pay awards 47
Bonuses 47
Child care providers 47
Children's earnings 8
Clergy 51
De minimis benefits 49
Elective deferrals 50
Employee achievement
award 47
Employee compensation 47
Farmworkers 38
Foreign employer 52
Form W-2 (See Form W-2)
Fringe benefits 48
Garnished 13
Government cost-of-living
allowances 48
Household workers 38
Long-term care coverage 48
Military retirees 38, 52
Military service 52
Miscellaneous compensation 47
Note for services 48
Outplacement services 48
Religious orders 51
Restricted property 51
Dividends on restricted
stock 51
Retirement plan contributions by
employer 50
Page 136 Publication 17 (2021)
Wages and salaries (Cont.)
Severance pay 48
Sick pay 48, 54
Social security and Medicare
taxes paid by employer 48
Stock appreciation rights 48
Stock options 51
Supplemental 39
Volunteer work 52
Withholding (See Withholding)
War zone (See Combat zone)
Washington State Supplemental
Workmen's Compensation
Fund 96
Welfare benefits 35, 72
What's new 1
Where to file 17
Widow/widower (See Surviving
spouse)
Winter energy payments 74
Withholding 12, 37
(See also Form W-2)
Agricultural Act of 1949
payments 40
Changing amount withheld 38
For 2022 38
Checking amount of 38
Claim for refund 8
Commodity credit loans 40
Credit for 37, 44
Cumulative wage method 39
Definition 37
Determining amount to
withhold 38
Disaster Assistance Act of 1988
payments 40
Employers, rules for 39
Exemption from 39
Federal income taxes, not
deductible 99
Form W-4:
Provided by employer 39
Fringe benefits 40
Gambling winnings 40, 44
General rules 37
Highest rate, employer must
withhold at if no W-4 39
Incorrect form 44
IRA distributions 85
New job 38
Penalties 37, 39, 41
Pensions and annuities 14, 40
Railroad retirement benefits 40,
Repaying withheld tax 39
Salaries and wages 38
Separate returns 44
Sick pay 40
Social security benefits 40, 64
State and local income taxes,
deduction for 95
Supplemental wages 39
Tips (See Tip income)
Unemployment
compensation 40, 72
Workers' compensation 54
Mandatory contributions to state
funds, deduction of 96
Return to work 54
Worksheets:
Head of household status and
cost of keeping up home 25
Individual retirement
arrangements (IRAs),
modified AGI computation
(Worksheet 9-1) 81
Roth IRA modified adjusted gross
income (MAGI), computation
(Worksheet 9-2) 86
Social security or railroad
retirement benefits, to figure
taxability 63, 64
Support test 31
Wristwatch 103
Write-offs (See Cancellation of debt)
Publication 17 (2021) Page 137
Where To File
Mail your return to the address shown below that applies to you. If you want to use a private delivery service, see Private
delivery services in chapter 1.TIP
Envelopes without enough postage will be returned to you by the post office. Your envelope may need
additional postage if it contains more than five pages or is oversized (for example, it is over 1/4 inch thick). Also, include
your complete return address.
IF you live in...
THEN send your return to the address
below if you are requesting a refund or
are NOT enclosing a payment...
OR send your return to the address
below if you ARE enclosing a
payment (check or money order)...
Alabama, Georgia, North Carolina, South Carolina,
Tennessee Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0002
Internal Revenue Service
P.O. Box 1214
Charlotte, NC 28201-1214
Alaska, California, Colorado, Hawaii, Idaho, Kansas,
Michigan, Montana, Nebraska, Nevada, North Dakota,
Ohio, Oregon, South Dakota, Utah, Washington, Wyoming
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0002
Internal Revenue Service
P.O. Box 802501
Cincinnati, OH 45280-2501
Arkansas, Connecticut, Delaware, District of Columbia,
Illinois, Indiana, Iowa, Kentucky, Maine, Maryland,
Massachusetts, Minnesota, Missouri, New Hampshire,
New Jersey, New York, Oklahoma, Rhode Island,
Vermont, Virginia, West Virginia, Wisconsin
Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0002
Internal Revenue Service
P.O. Box 931000
Louisville, KY 40293-1000
Arizona, New Mexico Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0002
Internal Revenue Service
P.O. Box 802501
Cincinnati, OH 45280-2501
Pennsylvania Internal Revenue Service
Kansas City, MO 64999-0002
Internal Revenue Service
P.O. Box 802501
Cincinnati, OH 45280-2501
Florida, Louisiana, Mississippi, Texas Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0002
Internal Revenue Service
P.O. Box 1214
Charlotte, NC 28201-1214
A foreign country, U.S. possession or territory*, or use an
APO or FPO address, or file Form 2555 or 4563, or are a
dual-status alien
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303
*If you live in American Samoa, Puerto Rico, Guam, the U.S. Virgin Islands, or the Northern Mariana Islands, see Pub. 570.
Page 138 Publication 17 (2021)