Bulletin No. 2025–45

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2025–45

November 3, 2025

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE

EXCISE TAX

Notice 2025-57, page 692.

Notice 2025-61, page 693.

Rev. Proc. 2025-32, page 695.

INCOME TAX

This notice provides transitional guidance with respect to

returns relating to certain interest on specified passenger

vehicle loans received in a trade or business from an individual required to be filed under section 6050AA. Section

70203 of Public Law 119-21, commonly known as the

One, Big, Beautiful Bill Act, added new section 6050AA

to the Code, imposing information reporting obligations

on recipients of applicable passenger vehicle loan interest received in a trade or business from individuals. The

notice provides that recipients of such interest may satisfy

the reporting obligations under section 6050AA for such

interest received on a specified passenger vehicle loan

in 2025 by making a statement available to the individual

indicating the total amount of interest received in calendar year 2025 on a specified passenger vehicle loan. The

notice also provides that the IRS will not impose penalties

under sections 6721 and 6722 on recipients of interest

that have satisfied the reporting obligations under section 6050AA for calendar year 2025 as described in this

notice.

This revenue procedure modifies certain sections of Rev.

Proc. 2024-40, 2024-45 I.R.B. 1100, to reflect the amendments to the Internal Revenue Code (Code) by Public Law

119-21, 139 Stat. 72 (July 4, 2025), commonly known as

the One, Big, Beautiful Bill Act. This revenue procedure sets

forth inflation-adjusted items for 2026 for various Code provisions as in effect on October 9, 2025.

Finding Lists begin on page ii.

Sections 4375 and 4376 impose a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered

Outcomes Research Trust Fund (PCORTF). The PCORTF fee is

determined by multiplying the applicable dollar amount for that

year by the average number of lives covered during the year.

The applicable dollar amount is based on increases in the projected per capita amount of National Health Expenditures, as

most recently released by HHS. Notice 2024-83 provided that

the adjusted applicable dollar amount for policy years and plan

years ending on or after October 1, 2024, and before October 1, 2025, is $3.47. This notice provides that the adjusted

applicable dollar amount that applies for determining the

PCORTF fee for policy years and plan years ending on or after

October 1, 2025, and before October 1, 2026, is $3.84. This

amount has been determined by Treasury economists using

the percentage increase in the projected per capita amount of

National Health Expenditures published by HHS in June 2025

(Table 1, line 35) and the adjustment, as determined by Treasury economists, for year to year variations.

Rev. Rul. 2025-21, page 690.

Federal rates; adjusted federal rates; adjusted federal longterm rate, and the long-term tax exempt rate. For purposes

of sections 382, 1274, 1288, 7872 and other sections of

the Code, tables set forth the rates for November 2025.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

November 3, 2025 

Bulletin No. 2025–45

Part I

Section 1274.—

Determination of Issue

Price in the Case of Certain

Debt Instruments Issued for

Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483,

1288, 7520, 7872.)

Rev. Rul. 2025-21

This revenue ruling provides various prescribed rates for federal income

AFR

110% AFR

120% AFR

130% AFR

AFR

110% AFR

120% AFR

130% AFR

150% AFR

175% AFR

AFR

110% AFR

120% AFR

130% AFR

Short-term adjusted AFR

Mid-term adjusted AFR

Long-term adjusted AFR

November 3, 2025

tax purposes for November 2025 (the

current month). Table 1 contains the

short-term, mid-term, and long-term

applicable federal rates (AFR) for the

current month for purposes of section

1274(d) of the Internal Revenue Code.

Table 2 contains the short-term, midterm, and long-term adjusted applicable federal rates (adjusted AFR) for the

current month for purposes of section

1288(b). Table 3 sets forth the adjusted

federal long-term rate and the longterm tax-exempt rate described in section 382(f). Table 4 contains the appro-

priate percentages for determining the

low-income housing credit described in

section 42(b)(1) for buildings placed in

service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service

after July 30, 2008, shall not be less

than 9%. Finally, Table 5 contains the

federal rate for determining the present

value of an annuity, an interest for life

or for a term of years, or a remainder or

a reversionary interest for purposes of

section 7520.

REV. RUL. 2025-21 TABLE 1

Applicable Federal Rates (AFR) for November 2025

Period for Compounding

Annual

Semiannual

Quarterly

Short-term

3.69%

3.66%

3.64%

4.07%

4.03%

4.01%

4.44%

4.39%

4.37%

4.82%

4.76%

4.73%

Mid-term

3.83%

3.79%

3.77%

4.21%

4.17%

4.15%

4.60%

4.55%

4.52%

4.99%

4.93%

4.90%

5.77%

5.69%

5.65%

6.74%

6.63%

6.58%

Long-term

4.62%

4.57%

4.54%

5.09%

5.03%

5.00%

5.56%

5.48%

5.44%

6.03%

5.94%

5.90%

Annual

2.80%

2.90%

3.50%

REV. RUL. 2025-21 TABLE 2

Adjusted AFR for November 2025

Period for Compounding

Semiannual

2.78%

2.88%

3.47%

690

Monthly

3.63%

4.00%

4.35%

4.71%

3.76%

4.13%

4.51%

4.88%

5.62%

6.54%

4.53%

4.98%

5.42%

5.87%

Quarterly

2.77%

2.87%

3.46%

Monthly

2.76%

2.86%

3.45%

Bulletin No. 2025–45

REV. RUL. 2025-21 TABLE 3

Rates Under Section 382 for November 2025

Adjusted federal long-term rate for the current month

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal

long-term rates for the current month and the prior two months.)

3.50%

3.65%

REV. RUL. 2025-21 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for November 2025

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after

July 30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income housing credit

7.98%

Appropriate percentage for the 30% present value low-income housing credit

3.42%

REV. RUL. 2025-21 TABLE 5

Rate Under Section 7520 for November 2025

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,

or a remainder or reversionary interest

Section 42.—Low-Income

Housing Credit

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2025. See Rev. Rul. 2025-21, page 690.

Section 280G.—Golden

Parachute Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2025. See Rev. Rul. 2025-21 page 690.

Section 382.—Limitation

on Net Operating Loss

Carryforwards and

Certain Built-In Losses

Following Ownership

Change

The adjusted applicable federal long-term rate

is set forth for the month of November 2025. See

Rev. Rul. 2025-21, page 690.

Section 467.—Certain

Payments for the Use of

Property or Services

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2025. See Rev. Rul. 2025-21, page 690.

Section 468.—Special

Rules for Mining and Solid

Waste Reclamation and

Closing Costs

The applicable federal short-term rates are set

forth for the month of November 2025. See Rev.

Rul. 2025-21, page 690.

Section 482.—Allocation

of Income and Deductions

Among Taxpayers

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2025. See Rev. Rul. 2025-21, page 690.

4.60%

Section 483.—Interest on

Certain Deferred Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2025. See Rev. Rul. 2025-21, page 690.

Section 1288.—Treatment

of Original Issue Discount

on Tax-Exempt Obligations

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of November 2025. See Rev. Rul. 2025-21, page 690.

Section 7520.—Valuation

Tables

The applicable federal mid-term rates are set

forth for the month of November 2025. See Rev.

Rul. 2025-21, page 690.

Section 7872.—Treatment

of Loans With BelowMarket Interest Rates

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2025. See Rev. Rul. 2025-21, page 690.

Bulletin No. 2025–45

691

November 3, 2025

Part III

Transitional Guidance

Regarding Returns Relating

to Certain Interest on

Specified Passenger

Vehicle Loans Received in

a Trade or Business

Notice 2025-57

SECTION 1. PURPOSE

This notice provides transitional guidance with respect to returns relating to certain interest on specified passenger vehicle

loans received in a trade or business from

individuals, required to be filed under new

section 6050AA of the Internal Revenue

Code (Code)1 as enacted by section 70203

of Public Law 119-21, 139 Stat. 72, 176

(July 4, 2025), commonly known as the

One, Big, Beautiful Bill Act (OBBBA).

To ensure efficient administration of this

new provision, section 3 of this notice provides that recipients of such interest may

satisfy the reporting obligations under

section 6050AA for such interest received

on a specified passenger vehicle loan in

2025 by making a statement available to

the individual indicating the total amount

of interest received in calendar year 2025

on a specified passenger vehicle loan.

SECTION 2. BACKGROUND

.01 New Reporting Under Sections

163(h)(4) and 6050AA

As amended by the OBBBA, section 163(h)(4) provides that the term

“personal interest” (as defined in section 163(h)(2)) does not include “qualified passenger vehicle loan interest” (as

defined in section 163(h)(4)(B)) (QPVLI)

for taxable years beginning after December 31, 2024, and before January 1, 2029.

Thus, section 163(h)(4) permits a deduction for QPVLI under section 163(a) for

those taxable years.

Section 6050AA requires information

reporting with respect to interest received

1

on a specified passenger vehicle loan. This

interest may be QPVLI that is deductible

under section 163(a).

Under section 6050AA(a), any person

engaged in a trade or business, referred

to herein as the “recipient,” who, in the

course of that trade or business, receives

from any individual interest aggregating

$600 or more for any calendar year on a

specified passenger vehicle loan, must file

an information return reporting the receipt

of interest. A “specified passenger vehicle

loan” is indebtedness described in section

163(h)(4)(B). That is, it is indebtedness

incurred by the taxpayer during the taxable year and after December 31, 2024,

for the purchase of, and that is secured

by a first lien on, an applicable passenger

vehicle for personal use. The term “applicable passenger vehicle” is defined in section 163(h)(4)(D).

Section 6050AA(b) provides that the

information return filed by the recipient

must be in the form prescribed by the

Secretary of the Treasury or the Secretary’s delegate (Secretary) and must

contain: (A) the name and address of

the individual from whom the interest

was received; (B) the amount of interest

received for the calendar year; (C) the

amount of outstanding principal on the

specified passenger vehicle loan as of the

beginning of such calendar year; (D) the

date of origination of such loan; (E) the

year, make, model, and vehicle identification number of the applicable passenger vehicle which secures such loan (or

such other description of such vehicle

as the Secretary may prescribe); and (F)

such other information as the Secretary

may prescribe.

Section 6050AA(c) provides that every

person required to make an information

return under section 6050AA(a) must also

furnish to each individual whose name is

required to be included in the return a written statement showing the name, address,

and phone number of the information contact of the recipient, and the information

required to be included in the information

return under section 6050AA(b)(2)(B)

through (F). Section 6050AA(c) also provides the written statement must be furnished on or before January 31 of the year

following the calendar year for which the

return was required to be made.

.02 Penalties Under Sections 6721 and

6722

Section 6721 imposes a penalty for

any failure to file an information return on

or before the required filing date, and for

any failure to include all the information

required to be shown on a return or the

inclusion of incorrect information.

Section 6722 imposes a penalty for

any failure to furnish a payee statement

on or before the required furnishing date

to the person to whom such statement is

required to be furnished, and for any failure to include all the information required

to be shown on a payee statement or the

inclusion of incorrect information.

Section 6724(a) provides that no penalty may be imposed under sections 6721

and 6722 if it is shown that any failure

was due to reasonable cause and not willful neglect. Section 6724(d)(1)(B)(xxix)

defines an “information return” for purposes of section 6721 as including a return

required by section 6050AA(a). Under

section 6724(d)(2)(MM), a payee statement is defined for purposes of section

6722 as including the statement required

by section 6050AA(c).

SECTION 3. TRANSITIONAL

GUIDANCE

The OBBBA was signed into law

on July 4, 2025. Section 163(h)(4), as

amended, and new section 6050AA apply

to indebtedness incurred after December

31, 2024. This section 3 provides transitional guidance regarding section 6050AA

for a taxable year beginning after December 31, 2024, and ending on or before

December 31, 2025. The transitional

guidance provided in this section does

not affect or delay the applicability of section 163(h)(4).

The Department of the Treasury (Treasury Department) and the Internal Reve-

Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).

November 3, 2025

692

Bulletin No. 2025–45

nue Service (IRS) understand that recipients may need additional time to make the

necessary changes to their systems to comply with their new information reporting

responsibilities under section 6050AA. In

addition, the IRS needs additional time to

make necessary programming and form

updates to implement section 6050AA.

The Treasury Department and the IRS are

also aware that individuals need information on how much interest they paid or

accrued in 2025 in order to determine the

amount of interest that may be deductible

as QPVLI on their individual income tax

returns for the 2025 taxable year.

Accordingly, the Treasury Department

and the IRS are providing transitional

guidance with respect to the reporting

obligations under section 6050AA with

regard to interest that a recipient received

on a specified passenger vehicle loan in

calendar year 2025. As described in this

transitional guidance, the recipient may

satisfy the reporting obligations under

section 6050AA for interest received in

calendar year 2025 on a specified passenger vehicle loan by making a statement

available to the individual on or before

January 31, 2026, indicating the total

amount of interest received in calendar

year 2025 on a specified passenger vehicle loan. The interest recipient can make

this statement available to the individual

via, for example, an online account portal that the individual can easily access,

a regular monthly statement, an annual

statement that is provided to the individual, or by other similar means designed

to provide accurate information to the

individual regarding the total amount of

interest received in calendar year 2025

on a specified passenger vehicle loan.

In addition, the IRS will not impose

penalties under sections 6721 and 6722

on recipients of interest that have satisfied the reporting obligations under

section 6050AA for calendar 2025 as

described in this notice.

SECTION 4. EFFECTIVE DATE

This notice is effective for returns and

statements related to interest received

during calendar year 2025 on a specified

passenger vehicle loan.

1

SECTION 5. PAPERWORK

REDUCTION ACT

The Paperwork Reduction Act of 1995

(44 U.S.C. 3501-3520) (PRA) generally

requires that a Federal agency obtain the

approval of the Office of Management and

Budget (OMB) before collecting information from the public, whether such

collection of information is mandatory,

voluntary, or required to obtain or retain

a benefit. An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless it displays a valid control number

assigned by the OMB.

The collections of information in

this notice are in section 3. The collections of information include recordkeeping requirements that are necessary

to ensure taxpayers can determine the

amount of specified passenger vehicle

loan interest paid or accrued in 2025.

The collections will be used by the IRS

for tax compliance purposes and by taxpayers to calculate their deduction. The

likely respondents are corporations and

partnerships.

Estimated number of respondents:

35,800 respondents.

Estimated number of responses:

8,000,000 responses.

Estimated frequency of responses:

Annually.

Estimated average time per response:

0.25 hours.

Estimated total annual burden:

2,000,000 total burden hours.

Books or records relating to a collection of information must be retained as

long as their contents may become material in the administration of any internal

revenue law. Generally, tax returns and

tax return information are confidential, as

required by section 6103 of the Code.

The collection of information contained in this notice has been submitted

to the OMB under control number 15452334.

SECTION 6. DRAFTING

INFORMATION

The principal author of this notice is

the Office of Associate Chief Counsel

(Procedure & Administration). For further

information regarding this notice contact

the office at (202) 317-3400 (not a tollfree call).

Sections 4375 & 4376 —

Insured and Self-Insured

Health Plans Adjusted

Applicable Dollar Amount

for Fee Imposed by

Sections 4375 and 4376

Notice 2025–61

I. PURPOSE

This notice provides the adjusted applicable dollar amount to be multiplied by

the average number of covered lives for

purposes of calculating the fee imposed

by sections 4375 and 4376 of the Internal

Revenue Code for policy years and plan

years that end on or after October 1, 2025,

and before October 1, 2026.

II. BACKGROUND

Section 4375 imposes a fee on the

issuer of a specified health insurance

policy for each policy year ending after

September 30, 2012, and before October

1, 2029. Section 4376 imposes a fee on

the plan sponsor of an applicable self-insured health plan for each plan year ending after September 30, 2012, and before

October 1, 2029. The fee imposed by

sections 4375 and 4376 helps to fund

the Patient-Centered Outcomes Research

Trust Fund and is calculated using the

average number of lives covered under

the policy or plan and the applicable

dollar amount for that policy year or

plan year. Under sections 4375(a) and

4376(a), the applicable dollar amount is

$2 for policy and plan years ending on or

after October 1, 2013, and before October 1, 2014.1 See Treas. Reg. §§ 46.43751(c)(4) and 46.4376-1(c)(3).

Under sections 4375(d) and 4376(d)

and §§ 46.4375-1(c)(4) and 46.43761(c)(3), the applicable dollar amount for

The applicable dollar amount is $1 for policy and plan years ending before October 1, 2013.

Bulletin No. 2025–45

693

November 3, 2025

policy years and plan years ending in

any Federal fiscal year beginning on or

after October 1, 2014, is increased based

on increases in the projected per capita

amount of National Health Expenditures.

Specifically, the applicable dollar amount

is the sum of—

(i) The applicable dollar amount for the

policy year or plan year ending in the

previous Federal fiscal year; plus

(ii) The amount equal to the product of—

(A) The applicable dollar amount for

the policy year or plan year ending in the previous Federal fiscal

year; and

(B) The percentage increase in the

projected per capita amount of

the National Health Expenditures, as most recently released

by the Department of Health and

Human Services (HHS) before

the beginning of the Federal fiscal year.

November 3, 2025

Notice 2024–83, 2024–49 IRB 1206,

provides that the adjusted applicable dollar amount for policy years and plan years

that end on or after October 1, 2024, and

before October 1, 2025, is $3.47.

III. ADJUSTED APPLICABLE

DOLLAR AMOUNT

The applicable dollar amount that must

be used to calculate the fee imposed by sections 4375 and 4376 for policy years and

plan years that end on or after October 1,

2025, and before October 1, 2026, is $3.84.

The increase from the prior applicable dollar amount is calculated by multiplying

$3.47 (which is the adjusted applicable

dollar amount for policy years and plan

years ending in the previous Federal fiscal

year) by the percentage increase of the projected per capita amount of National Health

Expenditures published by HHS on June 24,

2025. See: https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/projected; Table

694

1. The percentage increase is calculated

after adjustment to reflect updates to the

data used to calculate the prior applicable

dollar amount, $3.47, which was based on

the per capita amounts of National Health

Expenditures for 2023 and 2024 published

by HHS on June 10, 2024.

IV. EFFECTIVE DATE

This notice is effective for policy years

and plan years ending on or after October

1, 2025, and before October 1, 2026.

V. DRAFTING INFORMATION

The principal author of this notice is the

Health and Welfare branch of the Office of

Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For further information

regarding this notice, contact 202–317–

5500 (not a toll-free call).

Bulletin No. 2025–45

26 CFR 601.602: Tax forms and instructions.

(Also Part I, §§ 1, 23, 24, 32, 42, 45R, 55, 59, 62, 63, 125, 132(f), 135, 137, 146, 147, 148, 152, 179, 179D, 199A, 213, 220, 221, 448, 461, 512, 513, 529A, 642, 831,

877, 877A, 911, 1274A, 2032A, 2503, 2523, 2801, 4161, 4261, 4611, 6033, 6039F, 6323, 6334, 6601, 6651, 6652, 6695, 6698, 6699, 6721, 6722, 6726, 7345, 7430,

7702B, 9831; 1.148-5.)

Rev. Proc. 2025-32

Table of Contents



SECTION 1. PURPOSE

Code Section1

SECTION 2. CHANGES

SECTION 3. MODIFICATION OF REV. PROC. 2024-40

SECTION 4. 2026 ADJUSTED ITEMS

.01 Tax Rate Tables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(j)(2) (A)-(D)

.02 Unearned Income of Minor Children Subject to the “Kiddie Tax” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(g)

.03 Maximum Capital Gains Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(h)

.04 Adoption Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

.05 Child Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

.06 Earned Income Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

.07 Rehabilitation Expenditures Treated as Separate New Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42(e)

.08 Low-Income Housing Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42(h)

.09 Employee Health Insurance Expense of Small Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45R

.10 Exemption Amounts for Alternative Minimum Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

.11 Alternative Minimum Tax Exemption for a Child Subject to the “Kiddie Tax” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59(j)

.12 Certain Expenses of Elementary and Secondary School Teachers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62(a)(2)(D)

.13 Transportation Mainline Pipeline Construction Industry Optional Expense Substantiation Rules for

Payments to Employees Under Accountable Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62(c)

.14 Standard Deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

.15 Cafeteria Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

.16 Qualified Transportation Fringe Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132(f)

.17 Income from United States Savings Bonds for Taxpayers Who Pay Qualified Higher Education Expenses . . . . . . . . . 135

.18 Adoption Assistance Programs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

.19 Private Activity Bonds Volume Cap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146(d)

.20 Loan Limits on Agricultural Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147(c)(2)

.21 General Arbitrage Rebate Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148(f)

.22 Safe Harbor Rules for Broker Commissions on Guaranteed Investment Contracts or

Investments Purchased for a Yield Restricted Defeasance Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

.23 Gross Income Limitation for a Qualifying Relative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152(d)(1)(B)

.24 Election to Expense Certain Depreciable Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

.25 Energy Efficient Commercial Buildings Deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179D

.26 Qualified Business Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199A

.27 Eligible Long-Term Care Premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213(d)(10)

.28 Medical Savings Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220

.29 Interest on Education Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221

.30 Limitation on Use of Cash Method of Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448

.31 Threshold for Excess Business Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461(l)

.32 Treatment of Dues Paid to Agricultural or Horticultural Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512(d)

.33 Insubstantial Benefit Limitations for Contributions Associated with Charitable Fund-Raising Campaigns. . . . . . . . 513(h)

.34 Aggregate Limitation on Contributions to ABLE Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529A

1

Unless otherwise specified, all references to “section” or “§” are to provisions of the Internal Revenue Code.

Bulletin No. 2025–45

695

November 3, 2025

.35 Special Rules for Credits and Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642

.36 Tax on Insurance Companies Other than Life Insurance Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831

.37 Expatriation to Avoid Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 877

.38 Tax Responsibilities of Expatriation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 877A

.39 Foreign Earned Income Exclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911

.40 Debt Instruments Arising Out of Sales or Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1274A

.41 Limitation on Aggregate Decrease in the Value of Qualified Real Property in Decedent’s Gross Estate. . . . . . . . . . 2032A

.42 Annual Exclusion for Gifts and Annual Exception for Covered Gifts and Covered Bequests

Received from a Covered Expatriate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2503(b); 2523(i); 2801(c)

.43 Tax on Arrow Shafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4161

.44 Passenger Air Transportation Excise Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4261

.45 Tax on Certain Uses of Crude Oil and Petroleum Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4611

.46 Reporting Exception for Certain Exempt Organizations with Nondeductible Lobbying Expenditures . . . . . . . . 6033(e)(3)

.47 Notice of Large Gifts Received from Foreign Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6039F

.48 Persons Against Whom a Federal Tax Lien Is Not Valid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6323

.49 Property Exempt from Levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6334(a)

.50 Exempt Amount of Wages, Salary, or Other Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6334(d)

.51 Interest on a Certain Portion of the Estate Tax Payable in Installments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6601(j)

.52 Failure to File Tax Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6651

.53 Failure to File Certain Information Returns, Registration Statements, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6652

.54 Other Assessable Penalties with Respect to the Preparation of Tax Returns for Other Persons . . . . . . . . . . . . . . . . . . 6695

.55 Failure to File Partnership Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6698

.56 Failure to File S Corporation Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6699

.57 Failure to File Correct Information Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6721

.58 Failure to Furnish Correct Payee Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6722

.59 Failure to File Return with Respect to Qualified Opportunity Zones and Rural Opportunity

Zones……………………………………………………………….... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6726

.60 Revocation or Denial of Passport in Case of Certain Tax Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7345

.61 Attorney Fee Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7430

.62 Periodic Payments Received Under Qualified Long-Term Care Insurance Contracts or

Under Certain Life Insurance Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7702B(d)

.63 Qualified Small Employer Health Reimbursement Arrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9831

SECTION 5. EFFECTIVE DATE

SECTION 6. EFFECT ON OTHER DOCUMENTS

SECTION 7. DRAFTING INFORMATION

SECTION 1. PURPOSE

This revenue procedure modifies

certain sections of Rev. Proc. 202440, 2024-45 I.R.B. 1100, to reflect the

amendments to the Internal Revenue

Code (Code) by Public Law 119-21,

139 Stat. 72 (July 4, 2025), commonly

known as the One, Big, Beautiful Bill

Act (OBBBA). This revenue procedure

sets forth inflation-adjusted items for

2026 for various Code provisions as in

effect on October 9, 2025.

The inflation-adjusted items for the

Code sections set forth in section 4 of this

November 3, 2025

revenue procedure are generally determined by reference to § 1(f). To the extent

amendments to the Code are enacted for

2025 or 2026 after October 9, 2025, taxpayers should consult additional guidance

to determine whether these adjustments

remain applicable for 2026.

SECTION 2. CHANGES

.01 Section 70101 of the OBBBA

amends § 1(j) to make the tax rate tables

that were effective for taxable years beginning after December 31, 2017, and before

January 1, 2026, permanent. The existing

696

seven tax rates of 10%, 12%, 22%, 24%,

32%, 35%, and 37% remain in effect for

individual taxpayers. The existing four tax

rates of 10%, 24%, 35%, and 37% remain

in effect for estates and trusts.

.02 Section 70402 of the OBBBA adds

§ 23(a)(4) which provides that so much of

the credit allowed under § 23(a)(1) as does

not exceed $5,000 is treated as a refundable credit. This amount is adjusted for

inflation for taxable years beginning after

December 31, 2025.

.03 Section 70104 of the OBBBA

amends § 24 to make the increased and

expanded child tax credit under § 24(h)

Bulletin No. 2025–45

that were effective for taxable years beginning after December 31, 2017, and before

January 1, 2026, permanent. In addition,

the OBBBA amends § 24(h)(2) to provide

that the maximum amount of child tax

credit is $2,200 for any taxable year beginning in 2025. This amount is adjusted for

inflation for taxable years beginning after

December 31, 2025.

.04 Section 71305 of the OBBBA

removes § 36B(f)(2)(B), which limited

the tax increase from excess advance payments for certain households, effective

for taxable years beginning after December 31, 2025. Accordingly, the inflation

adjustment to § 36B(f)(2)(B) is removed

from this revenue procedure.

.05 Section 70422(a) of the OBBBA

amends § 42(h)(3)(I) to increase the

amount used under § 42(h)(3)(C)(ii) to

calculate the State housing credit ceiling

for calendar years beginning after December 31, 2025.

.06 Section 70401 of the OBBBA

amends § 45F to increase the amount of

employer provided childcare credit and

provide for adjustment of the maximum

amount of the allowable credit for inflation.

Section 70401(b) of the OBBBA amends

§ 45F(b)(2) by increasing the maximum

credit amounts to $500,000 ($600,000 if

the employer is an eligible small business)

for taxable years beginning after December

31, 2025. These amounts will be adjusted

for inflation for taxable years beginning

after December 31, 2026.

.07 Section 70107 of the OBBBA

amends § 55(d)(4) to make the temporary

increases of the exemption amounts and

the phaseout threshold amounts that were

effective for taxable years beginning after

December 31, 2017, and before January

1, 2026, permanent. Section 55(d)(4)(B)

as amended provides that the $1,000,000

amount described in § 55(d)(4)(A)(ii)(I)

is not adjusted for inflation for any taxable year beginning before January 1,

2027.

.08 Section 70102 of the OBBBA

amends § 63(c)(7) to make the temporary

increases of the basic standard deduction

amounts provided in § 63(c)(2) that were

effective for taxable years beginning after

December 31, 2017, and before January

1, 2026, permanent, and further increased

the base amounts. As a result, § 63(c)(7)

Bulletin No. 2025–45

as amended by the OBBBA provides that,

for taxable years beginning after December 31, 2024, the basic standard deduction amounts provided in § 63(c)(2) are

increased to $15,750 for single individuals and married individuals filing separate

returns; $23,625 for heads of households;

and $31,500 for married individuals filing a joint return and surviving spouses.

These amounts are adjusted for inflation

for taxable years beginning after 2025.

See section 3 of this revenue procedure for

removal of section 2.15(1) of Rev. Proc.

2024-40.

.09 Section 70412 of the OBBBA

amends § 127(c)(1)(B) to make the temporary expansion of the term “educational

assistance” to include employer payments

of principal or interest on any qualified

education loan made before January 1,

2026, permanent. The maximum exclusion amount of $5,250 will be adjusted for

inflation for taxable years beginning after

2026.

.10 Section 70306 of the OBBBA

amends § 179 by increasing the maximum amount a taxpayer may expense

under § 179(b)(1) and the phaseout

threshold amount under § 179(b)(2).

The OBBBA amendments to § 179 apply

to property placed in service in taxable

years beginning after December 31,

2024. Under § 179(b)(1), the maximum

amount allowable is $2,500,000. Under

§ 179(b)(2), the $2,500,000 amount is

reduced by the amount by which the

cost of § 179 property placed in service during the taxable year exceeds

$4,000,000, but not below $0. These

amounts are adjusted for inflation for

taxable years beginning after December

31, 2025. See section 3 of this revenue

procedure for removal of section 2.25 of

Rev. Proc. 2024-40.

.11 Section 70507 of the OBBBA terminated § 179D for property the construction of which begins after June 30, 2026.

.12 Section 70105 of the OBBBA

amended § 199A(i) to add a minimum

deduction of $400. Additionally, a taxpayer will be required to have a minimum of $1,000 of qualified business

income to be eligible for the deduction,

effective for taxable years beginning

after December 31, 2025. The $400 and

$1,000 amounts in § 199A(i) will be

697

adjusted for inflation for taxable years

beginning after 2026.

.13 Section 70115 of the OBBBA

amended § 529A(b)(2)(B)(i) to vary the

manner in which the aggregate annual

limitation on contributions made after

December 31, 2025, is adjusted for inflation from that provided in § 2503(b).

Accordingly, the inflation adjustment to

the amount under § 529A(b)(2)(B)(i) is

separately added to this revenue procedure.

.14 Section 70106 of the OBBBA

amends § 2010(c)(3) by increasing the

basic exclusion amount to $15,000,000

for calendar year 2026. The basic exclusion amount is a component of the applicable exclusion amount described in

§ 2010(c)(2) and is used in determining

the applicable credit amount against estate

tax described in § 2010(c)(1) and the

applicable credit amount against gift tax

described in § 2505(a)(1). For calendar

year 2026, the generation-skipping transfer exemption amount under § 2631(c) is

equal to $15,000,000. These numbers are

adjusted for inflation for taxable years

beginning after December 31, 2026. The

basic exclusion amount will be adjusted

for inflation for calendar year 2027 and

future years.

.15 Section 70433(a) of the OBBBA

amends § 6041(a) to increase the threshold amount for reporting payments made

in the course of a trade or business. Section 70433(c) and (d) of the OBBBA

amends §§ 6041A(a)(2) (requiring

reporting for remuneration for services)

and 3406(b)(6) (requiring backup withholding for payments reportable under

§ 6041), respectively, to cross-reference

the § 6041(a) threshold. For payments

made after December 31, 2025, the base

threshold under section 6041(a) is $2,000.

This base threshold amount is adjusted for

inflation for returns required to be filed in

calendar year 2027.

.16 Section 70421(d)(2)(A) of the

OBBBA adds § 6726, which, effective

for taxable years beginning after July 4,

2025, imposes a penalty for failure to

file a return in the time and manner prescribed for a qualified opportunity fund

or qualified rural opportunity fund under

§ 6039K. Section 6726(b) provides for a

penalty of $500 per day with a maximum

November 3, 2025

penalty of $10,000 per return ($50,000

if the gross assets of the fund are greater

than $10,000,000). Section 6726(c) provides penalties of $2,500 per day with a

maximum penalty is $50,000 per return

($250,000 if the gross assets of the fund

are greater than $10,000,000), if the failure to file is due to intentional disregard.

These amounts are effective for taxable

years that begin after the enactment of the

OBBBA. These amounts are adjusted for

inflation for returns required to be filed in

calendar years beginning after 2026.

SECTION 3. 2025 ADJUSTED ITEMS

AS MODIFIED, SUPERSEDED OR

SUPPLEMENTED

amended by the OBBBA provides the

standard deduction amounts under § 63(c)

(2) for any taxable year beginning in 2025

as follows:

.01 Removal of Section 2.15(1) of

Rev. Proc. 2024-40. Section 63(c)(7) as

Filing Status

Married Individuals Filing Joint Returns and Surviving Spouses (§ 1(j)(2)(A))

Heads of Households (§ 1(j)(2)(B))

Unmarried Individuals (other than Surviving Spouses and Heads of Households) (§ 1(j)(2)(C))

Married Individuals Filing Separate Returns (§ 1(j)(2)(D))

Accordingly, section 2.15(1) of Rev.

Proc. 2024-40 is removed.

.02 Removal of Section 2.25 of Rev.

Proc. 2024-40.

(1) Section 179(b)(1) as amended by

the OBBBA provides that the maximum

amount allowable for expensing under

§ 179 is $2,500,000 for any taxable year

beginning in 2025. Section 179(b)(2) as

amended by the OBBBA provides that,

for any taxable year beginning in 2025,

the $2,500,000 amount is reduced by the

amount by which the cost of § 179 property placed in service during the taxable

year exceeds $4,000,000, but not below

$0. Accordingly, section 2.25 of Rev.

Proc. 2024-40 is removed.

(2) Conforming change. The Table of

Contents of Rev. Proc. 2024-40 is modified by removing the entry for section

Standard Deduction

$31,500

$23,625

$15,750

$15,750

2.25, “Election to Expense Certain Depreciable Assets.”

SECTION 4. 2026 ADJUSTED ITEMS

.01 Tax Rate Tables. For taxable years

beginning in 2026, the tax rate tables

under § 1 are as follows:

TABLE 1 - Section 1(j)(2)(A) –Married Individuals Filing Joint Returns and Surviving Spouses

If Taxable Income Is:

The Tax Is:

Not over $24,800

10% of the taxable income

Over $24,800 but

$2,480 plus 12% of

not over $100,800

the excess over $24,800

$11,600 plus 22% of

Over $100,800 but

not over $211,400

the excess over $100,800

Over $211,400 but

$35,932 plus 24% of

not over $403,550

the excess over $211,400

Over $403,550 but

$82,048 plus 32% of

not over $512,450

the excess over $403,550

Over $512,450 but

$116,896 plus 35% of

not over $768,700

the excess over $512,450

Over $768,700

$206,583.50 plus 37% of

the excess over $768,700

November 3, 2025

698

Bulletin No. 2025–45

TABLE 2 - Section 1(j)(2)(B) – Heads of Households

If Taxable Income Is:

Not over $17,700

Over $17,700 but

not over $67,450

Over $67,450 but

not over $105,700

Over $105,700 but

not over $201,750

Over $201,750 but

not over $256,200

Over $256,200 but

not over $640,600

Over $640,600

The Tax Is:

10% of the taxable income

$1,770 plus 12% of

the excess over $17,700

$7,740 plus 22% of

the excess over $67,450

$16,155 plus 24% of

the excess over $105,700

$39,207 plus 32% of

the excess over $201,750

$56,631 plus 35% of

the excess over $256,200

$191,171 plus 37% of

the excess over $640,600

TABLE 3 - Section 1(j)(2)(C) – Unmarried Individuals (other than Surviving Spouses and Heads of Households)

If Taxable Income Is:

The Tax Is:

Not over $12,400

10% of the taxable income

Over $12,400 but

$1,240 plus 12% of

not over $50,400

the excess over $12,400

$5,800 plus 22% of

Over $50,400 but

not over $105,700

the excess over $50,400

Over $105,700 but

$17,966 plus 24% of

not over $201,775

the excess over $105,700

Over $201,775 but

$41,024 plus 32% of

not over $256,225

the excess over $201,775

Over $256,225 but

$58,448 plus 35% of

not over $640,600

the excess over $256,225

Over $640,600

$192,979.25 plus 37% of

the excess over $640,600

TABLE 4 - Section 1(j)(2)(D) – Married Individuals Filing Separate Returns

If Taxable Income Is:

The Tax Is:

Not over $12,400

10% of the taxable income

Over $12,400 but

$1,240 plus 12% of

not over $50,400

the excess over $12,400

$5,800 plus 22% of

Over $50,400 but

not over $105,700

the excess over $50,400

Over $105,700 but

$17,966 plus 24% of

not over $201,775

the excess over $105,700

Over $201,775 but

$41,024 plus 32% of

not over $256,225

the excess over $201,775

Over $256,225 but

$58,448 plus 35% of

not over $384,350

the excess over $256,225

Over $384,350

$103,291.75 plus 37% of

the excess over $384,350

Bulletin No. 2025–45

699

November 3, 2025

TABLE 5 - Section 1(j)(2)(E) – Estates and Trusts

If Taxable Income Is:

Not over $3,300

Over $3,300 but

not over $11,700

Over $11,700 but

not over $16,000

Over $16,000

.02 Unearned Income of Minor Children Subject to the “Kiddie Tax”. For taxable years beginning in 2026, the amount

in § 1(g)(4)(A)(ii)(I), which is used to

reduce the net unearned income reported

on the child’s return that is subject to

the “kiddie tax,” is $1,350. This $1,350

amount is the same as the amount provided

in § 63(c)(5)(A), as adjusted for inflation.

The Tax Is:

10% of the taxable income

$330 plus 24% of

the excess over $3,300

$2,346 plus 35% of

the excess over $11,700

$3,851 plus 37% of

the excess over $16,000

The same $1,350 amount is used for purposes of § 1(g)(7) to determine whether a

parent may elect to include a child’s gross

income in the parent’s gross income and

to calculate the “kiddie tax.” For example,

one of the requirements for the parental

election is that a child’s gross income is

more than the amount referred to in § 1(g)

(4)(A)(ii)(I) but less than 10 times that

Filing Status

Married Individuals Filing Joint Returns and Surviving Spouse

Married Individuals Filing Separate Returns

Heads of Household

All Other Individuals

Estates and Trusts

.04 Adoption Credit.

(1) Adoption Credit for Children with

Special needs. For taxable years beginning in 2026, under § 23(a)(3), the credit

allowed for an adoption of a child with

special needs is $17,670.

(2) Adoption Credit Limitation. For

taxable years beginning in 2026, under

§ 23(b)(1), the maximum credit allowed

for other adoptions is the amount of qualified adoption expenses up to $17,670. The

available adoption credit begins to phase

out under § 23(b)(2)(A) for taxpayers with

modified adjusted gross income in excess

of $265,080 and is completely phased out

for taxpayers with modified adjusted gross

income of $305,080 or more. See section

4.18 of this revenue procedure for the

adjusted items relating to adoption assistance programs.

(3) Refundable Portion. For taxable

years beginning in 2026, the amount used

November 3, 2025

Maximum Zero

Rate Amount

$98,900

$49,450

$66,200

$49,450

$3,300

in § 23(a)(4) to determine the amount of

the credit under § 23 that may be refundable is $5,120.

.05 Child Tax Credit.

(1) Maximum amount of the credit. For

taxable years beginning in 2026, the maximum amount of the credit allowed under

§ 24(a) is $2,200.

(2) Refundable portion. For taxable

years beginning in 2026, the amount used

in § 24(d)(1)(A) to determine the amount

of the credit under § 24 that may be

refundable is $1,700.

.06 Earned Income Credit.

(1) In general. For taxable years

beginning in 2026, the following

amounts are used to determine the

earned income credit under § 32(b). The

“earned income amount” is the amount

of earned income at or above which

the maximum amount of the earned

income credit is allowed. The “thresh-

700

amount; thus, a child’s gross income for

2026 must be more than $1,350 but less

than $13,500.

.03 Maximum Capital Gains Rate

(§ 1(h), § 1(j)(5)). For taxable years

beginning in 2026, the maximum zero rate

amounts and maximum 15 percent rate

amounts under § 1(j)(5)(B), as adjusted

for inflation, are as follows:

Maximum15%

Rate Amount

$613,700

$306,850

$579,600

$545,500

$16,250

old phaseout amount” is the amount of

adjusted gross income (or, if greater,

earned income) above which the maximum amount of the credit begins to

phase out. The “completed phaseout

amount” is the amount of adjusted gross

income (or, if greater, earned income)

at or above which no credit is allowed.

The threshold phaseout amounts and the

completed phaseout amounts shown in

the table below for married taxpayers

filing a joint return include the increase

provided in § 32(b)(2)(B), as adjusted

for inflation for taxable years beginning in 2026. The threshold phaseout

amounts and the completed phaseout

amounts shown in the table below for

taxpayers with all other filing statuses

also apply to married taxpayers who are

not filing a joint return and satisfy the

special rules for separated spouses in

§ 32(d).

Bulletin No. 2025–45

Item

Earned Income Amount

Maximum Amount of Credit

Threshold Phaseout Amount (Married Filing Jointly)

Completed Phaseout Amount (Married Filing Jointly)

Threshold Phaseout Amount (All other filing statuses)

Completed Phaseout Amount (All other filing statuses)

The instructions for the Form 1040

series provide tables showing the amount

of the earned income credit for each type

of taxpayer.

(2) Excessive Investment Income.

For taxable years beginning in 2026, the

earned income tax credit is not allowed

under § 32(i) if the aggregate amount

of certain investment income exceeds

$12,200.

.07

Rehabilitation

Expenditures

Treated as Separate New Building. For

One

$13,020

$4,427

$31,160

$58,863

$23,890

$51,593

Number of Qualifying Children

Two

Three or More

$18,290

$18,290

$7,316

$8,231

$31,160

$31,160

$65,899

$70,244

$23,890

$23,890

$58,629

$62,974

calendar year 2026, the per low-income

unit qualified basis amount under § 42(e)

(3)(A)(ii)(II) is $8,700.

.08 Low-Income Housing Credit. For

calendar year 2026, the amount used

under § 42(h)(3)(C)(ii) to calculate the

State housing credit ceiling for the low-income housing credit is the greater of (1)

$3.416 multiplied by the State population, or (2) $3,953,600.

.09 Employee Health Insurance

Expense of Small Employers. For tax-

able years beginning in 2026, the dollar

amount in effect under § 45R(d)(3)(B)

is $34,100. This amount is used under

§ 45R(c) for limiting the small employer

health insurance credit and under

§ 45R(d)(1)(B) for determining who is

an eligible small employer for purposes

of the credit.

.10 Exemption Amounts for Alternative

Minimum Tax. For taxable years beginning in 2026, the exemption amounts

under § 55(d)(1) are:

Filing status

Joint Returns or Surviving Spouses

Unmarried Individuals (other than Surviving Spouses)

Married Individuals Filing Separate Returns

Estates and Trusts

For taxable years beginning in 2026,

under § 55(b)(1), the excess taxable

Exemption amount

$140,200

$90,100

$70,100

$31,400

income above which the 28 percent tax

rate applies is:

Filing status

Married Individuals Filing Separate Returns

All Other Taxpayers

For taxable years beginning in 2026,

the amounts used under § 55(d)(2) to

Bulletin No. 2025–45

Excess taxable income

$122,250

$244,500

determine the phaseout of the exemption

amounts are:

Filing status

Joint Returns or Surviving Spouses

Unmarried Individuals (other than Surviving Spouses)

Married Individuals Filing Separate Returns

Estates and Trusts

.11 Alternative Minimum Tax Exemption for a Child Subject to the “Kiddie

Tax.” For taxable years beginning in

2026, for a child to whom the § 1(g) “kid-

None

$8,680

$664

$18,140

$26,820

$10,860

$19,540

Threshold Phaseout Amount

$1,000,000

$500,000

$500,000

$104,800

die tax” applies, the exemption amount

under §§ 55(d) and 59(j) for purposes of

the alternative minimum tax under § 55

may not exceed the sum of (1) the child’s

701

Complete Phaseout Amount

$1,280,400

$680,200

$640,200

$167,600

earned income for the taxable year, plus

(2) $9,750.

.12 Certain Expenses of Elementary

and Secondary School Teachers. For

November 3, 2025

taxable years beginning in 2026, under

§ 62(a)(2)(D), the amount of the deduction allowed under § 162 that consists

of expenses paid or incurred by an

eligible educator in connection with

books, supplies (other than nonathletic

supplies for courses of instruction in

health or physical education), computer

equipment (including related software

and services) and other equipment, and

supplementary materials used by the

eligible educator in the classroom is

$350.

.13 Transportation Mainline Pipeline Construction Industry Optional

Expense Substantiation Rules for Payments to Employees Under Accountable

Plans. For calendar year 2026, an eligible employer may pay certain welders and heavy equipment mechanics an

amount up to $23 per hour for rig-related expenses that are deemed substan-

tiated under an accountable plan if paid

in accordance with Rev. Proc. 2002-41,

2002-1 C.B. 1098. If the employer provides fuel or otherwise reimburses fuel

expenses, an amount up to $14 per hour

is deemed substantiated if paid in accordance with Rev. Proc. 2002-41.

.14 Standard Deduction.

(1) In general. For taxable years beginning in 2026, the standard deduction

amounts under § 63(c)(2) are as follows:

Filing Status

Married Individuals Filing Joint Returns and Surviving Spouses (§ 1(j)(2)(A))

Heads of Households (§ 1(j)(2)(B))

Unmarried Individuals (other than Surviving Spouses and Heads of Households) (§ 1(j)(2)(C))

Married Individuals Filing Separate Returns (§ 1(j)(2)(D))

(2) Dependent. For taxable years

beginning in 2026, the standard deduction

amount under § 63(c)(5) for an individual who may be claimed as a dependent

by another taxpayer cannot exceed the

greater of (1) $1,350, or (2) the sum of

$450 and the individual’s earned income.

(3) Aged or blind. For taxable years

beginning in 2026, the additional standard

deduction amount under § 63(f) for the

aged or the blind is $1,650. The additional

standard deduction amount is increased to

$2,050 if the individual is also unmarried

and not a surviving spouse.

.15 Cafeteria Plans. For taxable years

beginning in 2026, the dollar limitation

under § 125(i) on voluntary employee salary reductions for contributions to health

flexible spending arrangements is $3,400.

If the cafeteria plan permits the carryover

of unused amounts, the maximum carryover amount is $680.

.16 Qualified Transportation Fringe

Benefit. For taxable years beginning

in 2026, the monthly limitation under

§ 132(f)(2)(A) regarding the aggregate

fringe benefit exclusion amount for transportation in a commuter highway vehicle

and any transit pass is $340. The monthly

limitation under § 132(f)(2)(B) regarding

the fringe benefit exclusion amount for

qualified parking is $340.

.17 Income from United States Savings

Bonds for Taxpayers Who Pay Qualified

Higher Education Expenses. For taxable years beginning in 2026, the exclu-

November 3, 2025

sion under § 135, regarding income from

United States savings bonds for taxpayers who pay qualified higher education

expenses, begins to phase out for modified

adjusted gross income above $152,650

for joint returns and $101,800 for all

other returns. The exclusion is completely

phased out for modified adjusted gross

income of $182,650 or more for joint

returns and $116,800 or more for all other

returns.

.18 Adoption Assistance Programs.

For taxable years beginning in 2026,

under § 137(a)(2), the amount that can

be excluded from an employee’s gross

income for the adoption of a child with

special needs is $17,670. For taxable years

beginning in 2026, under § 137(b)(1) the

maximum amount that can be excluded

from an employee’s gross income for the

amounts paid or expenses incurred by an

employer for qualified adoption expenses

furnished pursuant to an adoption assistance program for adoptions by the

employee is $17,670. The amount excludable from an employee’s gross income

begins to phase out under § 137(b)(2)

(A) for taxpayers with modified adjusted

gross income in excess of $265,080 and

is completely phased out for taxpayers

with modified adjusted gross income of

$305,080 or more. See section 4.04 of this

revenue procedure for the adjusted items

relating to the adoption credit.

.19 Private Activity Bonds Volume

Cap. For calendar year 2026, the amounts

702

Standard Deduction

$32,200

$24,150

$16,100

$16,100

used under § 146(d) to calculate the State

ceiling for the volume cap for private

activity bonds is the greater of (1) $135

multiplied by the State population, or (2)

$397,625,000.

.20 Loan Limits on Agricultural

Bonds. For calendar year 2026, the loan

limit amount on agricultural bonds under

§ 147(c)(2)(A) for first-time farmers is

$682,700.

.21 General Arbitrage Rebate Rules.

For bond years ending in 2026, the amount

of the computation credit determined

under § 1.148-3(d)(4) of the Income Tax

Regulations is $2,170.

.22 Safe Harbor Rules for Broker

Commissions on Guaranteed Investment

Contracts or Investments Purchased for a

Yield Restricted Defeasance Escrow. For

calendar year 2026, under § 1.148-5(e)(2)

(iii)(B)(1) of the Income Tax Regulations,

a broker’s commission or similar fee for

the acquisition of a guaranteed investment

contract or investments purchased for a

yield restricted defeasance escrow is reasonable if (1) the amount of the fee that

the issuer treats as a qualified administrative cost does not exceed the lesser of

(A) $51,000, and (B) 0.2 percent of the

computational base (as defined in § 1.1485(e)(2)(iii)(B)(2)) or, if more, $5,000; and

(2) for any issue, the issuer does not treat

more than $145,000 in brokers’ commissions or similar fees as qualified administrative costs for all guaranteed investment contracts and investments for yield

Bulletin No. 2025–45

restricted defeasance escrows purchased

with gross proceeds of the issue.

.23 Gross Income Limitation for a

Qualifying Relative. For taxable years

beginning in 2026, the exemption amount

referred to in § 152(d)(1)(B) is $5,300.

.24 Election to Expense Certain Depreciable Assets. For taxable years beginning

in 2026, under § 179(b)(1), the aggregate

cost of any § 179 property that a taxpayer

elects to treat as an expense cannot exceed

$2,560,000 and, under § 179(b)(5)(A), the

cost of any sport utility vehicle that may

be taken into account under § 179 cannot exceed $32,000. Under § 179(b)(2),

the $2,560,000 limitation under § 179(b)

(1) is reduced (but not below zero) by the

amount by which the cost of § 179 property placed in service during the 2026 taxable year exceeds $4,090,000.

.25 Energy Efficient Commercial

Buildings Deduction. For taxable years

beginning in 2026, the applicable dollar value used to determine the maximum allowance of the deduction under

§ 179D(b)(2) is $0.59 increased (but

not above $1.19) by $0.02 for each percentage point by which the total annual

energy and power costs for the buildings

are certified to be reduced by a percent-

Filing Status

Married Individuals Filing Joint Returns

Married Individuals Filing Separate Returns

All Other Returns

.27 Eligible Long-Term Care Premiums. For taxable years beginning in 2026,

Threshold amount

$403,500

$201,775

$201,750

the limitations under § 213(d)(10), regarding eligible long-term care premiums

Attained Age Before the Close of the Taxable Year

40 or less

More than 40 but not more than 50

More than 50 but not more than 60

More than 60 but not more than 70

More than 70

.28 Medical Savings Accounts.

(1) Self-only coverage. For taxable

years beginning in 2026, the term “high

deductible health plan” as defined in

§ 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual

deductible that is not less than $2,900 and

not more than $4,400, and under which the

annual out-of-pocket expenses required to

be paid (other than for premiums) for covered benefits do not exceed $5,850.

(2) Family coverage. For taxable years

beginning in 2026, the term “high deductible health plan” means, for family coverage, a health plan that has an annual

deductible that is not less than $5,850 and

not more than $8,750, and under which the

annual out-of-pocket expenses required to

be paid (other than for premiums) for covered benefits do not exceed $10,700.

Bulletin No. 2025–45

age greater than 25 percent. For taxable

years beginning in 2026, the applicable dollar value used to determine the

increased deduction amount for certain

property under § 179D(b)(3) is $2.97

increased (but not above $5.94) by $0.12

for each percentage point by which the

total annual energy and power costs for

the building are certified to be reduced by

a percentage greater than 25 percent.

.26 Qualified Business Income. For taxable years beginning in 2026, the threshold

amounts under § 199A(e)(2) and phase-in

range amounts under § 199A(b)(3)(B) and

§ 199A(d)(3)(A) are:

Phase-in range amount

$553,500

$276,775

$276,750

includible in the term “medical care” are

as follows:

Limitation on Premiums

$500

$930

$1,860

$4,960

$6,200

.29 Interest on Education Loans. For

taxable years beginning in 2026, the $2,500

maximum deduction for interest paid on

qualified education loans under § 221

begins to phase out under § 221(b)(2)(B),

as adjusted for inflation, for taxpayers with

modified adjusted gross income in excess

of $85,000 ($175,000 for joint returns), and

is completely phased out for taxpayers with

modified adjusted gross income of $100,000

or more ($205,000 or more for joint returns).

.30 Limitation on Use of Cash Method

of Accounting. For taxable years beginning in 2026, a corporation or partnership

meets the gross receipts test of § 448(c)

for any taxable year if the average annual

gross receipts of such entity for the 3-taxable-year period ending with the taxable

year which precedes such taxable year

does not exceed $32,000,000.

703

.31 Threshold for Excess Business

Loss. For taxable years beginning in 2026,

in determining a taxpayer’s excess business loss, the amount under § 461(l)(3)

(A)(ii)(II) is $256,000 ($512,000 for joint

returns).

.32 Treatment of Dues Paid to Agricultural or Horticultural Organizations.

For taxable years beginning in 2026, the

limitation under § 512(d)(1), regarding

the exemption of annual dues required to

be paid by a member to an agricultural or

horticultural organization, is $212.

.33 Insubstantial Benefit Limitations

for Contributions Associated with Charitable Fund-Raising Campaigns.

(1) Low cost article. For taxable years

beginning in 2026, for purposes of defining the term “unrelated trade or business”

for certain exempt organizations under

November 3, 2025

§ 513(h)(2), “low cost articles” are articles

costing $13.90 or less.

(2) Other insubstantial benefits. For

taxable years beginning in 2026, under

§ 170, the $5, $25, and $50 guidelines in

section 3 of Rev. Proc. 90-12, 1990-1 C.B.

471 (as amplified by Rev. Proc. 92-49,

1992-1 C.B. 987, and modified by Rev.

Proc. 92-102, 1992-2 C.B. 579), for the

value of insubstantial benefits that may be

received by a donor in return for a contribution, without causing the contribution

to fail to be fully deductible, are $13.90,

$69.50 and $139, respectively.

.34 Aggregate Limitation on Contributions to ABLE Accounts. For taxable years

beginning in 2026, $20,000 (instead of

instead of the amount under provided in

section 4.42(1) of this revenue procedure)

is included in the aggregate limitation on

contributions to ABLE accounts under

§ 529A(b)(2)(B)(i).

.35 Special Rules for Credits and

Deductions. For taxable years beginning

in 2026, the amount of the deduction

under § 642(b)(2)(C)(i) is $5,300.

.36 Tax on Insurance Companies Other

than Life Insurance Companies. For taxable

years beginning in 2026, under § 831(b)(2)

(A)(i) the amount of the limit on net written premiums or direct written premiums

(whichever is greater) is $2,900,000 to

elect the alternative tax for certain small

companies under § 831(b)(1) to be taxed

only on taxable investment income.

.37 Expatriation to Avoid Tax. For calendar year 2026, under § 877A(g)(1)(A),

unless an exception under § 877A(g)(1)(B)

applies, an individual is a covered expatriate if the individual’s “average annual net

income tax” under § 877(a)(2)(A) for the

five taxable years ending before the expatriation date is more than $211,000.

.38 Tax Responsibilities of Expatriation. For taxable years beginning in 2026,

the amount that would be includible in

the gross income of a covered expatriate

by reason of § 877A(a)(1) is reduced (but

not below zero) by $910,000 pursuant to

§ 877A(a)(3).

.39 Foreign Earned Income Exclusion.

For taxable years beginning in 2026, the

foreign earned income exclusion amount

under § 911(b)(2)(D)(i) is $132,900.

.40 Debt Instruments Arising Out of

Sales or Exchanges. For calendar year

2026, a qualified debt instrument under

November 3, 2025

§ 1274A(b) has stated principal that does

not exceed $7,462,600, and a cash method

debt instrument under § 1274A(c)(2)

has stated principal that does not exceed

$5,330,500.

.41 Limitation on Aggregate Decrease

in Value of Qualified Real Property in

Decedent’s Gross Estate. For an estate of

a decedent dying in calendar year 2026, if

the executor elects to use the special use

valuation method under § 2032A for qualified real property, the aggregate decrease

in the value of qualified real property

resulting from electing to use § 2032A for

purposes of the estate tax cannot exceed

$1,460,000.

.42 Annual Exclusion for Gifts and

Annual Exception for Covered Gifts and

Covered Bequests Received from a Covered Expatriate.

(1) For calendar year 2026, the first

$19,000 of gifts to any person (other than

gifts of future interests in property) are

not included in the total amount of taxable

gifts under § 2503 made during that year.

(2) For calendar year 2026, the first

$194,000 (instead of the amount provided

in paragraph (1) of this section 4.42) of

gifts to a spouse who is not a citizen of the

United States (other than gifts of future

interests in property) are not included in the

total amount of taxable gifts under §§ 2503

and 2523(i)(2) made during that year.

(3) The tax imposed under § 2801 on the

receipt of covered gifts or covered bequests

from a covered expatriate shall apply only

to the extent that the value of covered gifts

and covered bequests received during calendar year 2026 exceeds $19,000.

.43 Tax on Arrow Shafts. For calendar year 2026, the tax imposed under

§ 4161(b)(2)(A) on the first sale by the

manufacturer, producer, or importer of

any shaft of a type used in the manufacture of certain arrows is $0.65 per shaft.

.44 Passenger Air Transportation

Excise Tax. For calendar year 2026, the

tax under § 4261(b)(1) on the amount paid

for each domestic segment of taxable air

transportation is $5.30. For calendar year

2026, the tax under § 4261(c)(1) on any

amount paid (whether within or without

the United States) for any international air

transportation, if the transportation begins

or ends in the United States, generally is

$23.40. Under § 4261(c)(3), however, a

lower rate of tax applies under § 4261(c)

704

(1) to a domestic segment beginning or

ending in Alaska or Hawaii, and the tax

applies only to departures. For calendar

year 2026, the rate of tax is $11.70.

.45 Tax on Certain Uses of Crude Oil

and Petroleum Products. For calendar year

2026, the tax imposed under § 4611(a) on

crude oil received at a United States refinery and petroleum products entered into

the United States for consumption, use, or

warehousing is $0.27 per barrel.

.46 Reporting Exception for Certain

Exempt Organizations with Nondeductible

Lobbying Expenditures. For taxable years

beginning in 2026, the annual per person,

family, or entity dues limitation to qualify

for the reporting exception under § 6033(e)

(3) (and section 5.05 of Rev. Proc. 98-19,

1998-1 C.B. 547), regarding certain exempt

organizations with nondeductible lobbying

expenditures, is $147 or less.

.47 Notice of Large Gifts Received from

Foreign Persons. For taxable years beginning in 2026, § 6039F authorizes the Secretary of the Treasury or the Secretary’s

delegate to require recipients of gifts from

certain foreign persons to report these gifts

if the aggregate value of gifts received in

the taxable year exceeds $20,573.

.48 Persons Against Whom a Federal

Tax Lien Is Not Valid. For calendar year

2026, a federal tax lien is not valid against

(1) certain purchasers under § 6323(b)

(4) who purchased personal property in

a casual sale for less than $2,000, or (2)

a mechanic’s lienor under § 6323(b)(7)

who repaired or improved certain residential property if the contract price with the

owner is not more than $10,010.

.49 Property Exempt from Levy. For

calendar year 2026, the value of property

exempt from levy under § 6334(a)(2) (fuel,

provisions, furniture, and other household

personal effects, as well as arms for personal use, livestock, and poultry) cannot

exceed $11,980. The value of property

exempt from levy under § 6334(a)(3)

(books and tools necessary for the trade,

business, or profession of the taxpayer)

cannot exceed $5,990.

.50 Exempt Amount of Wages, Salary,

or Other Income. For taxable years beginning in 2026, the dollar amount used to

calculate the amount determined under

§ 6334(d)(4)(B) is $5,300.

.51 Interest on a Certain Portion of the

Estate Tax Payable in Installments. For an

Bulletin No. 2025–45

estate of a decedent dying in calendar year

2026, the dollar amount used to determine

the “2-percent portion” (for purposes of

calculating interest under § 6601(j)) of the

estate tax extended as provided in § 6166

is $1,940,000.

.52 Failure to File Tax Return. In the

case of any return required to be filed

in 2027, the amount of the addition to

tax under § 6651(a) for failure to file an

income tax return within 60 days of the

due date of such return (determined with

regard to any extensions of time for filing)

will not be less than the lesser of $535 or

100 percent of the amount required to be

shown as tax on such return.

.53 Failure to File Certain Information

Returns, Registration Statements, etc. For

returns required to be filed in 2027, the

penalty amounts under § 6652(c) are:

(1) for failure to file a return required

under § 6033(a)(1) (relating to returns

by exempt organization) or § 6012(a)(6)

(relating to returns by political organizations):

Scenario

Daily Penalty

$25

Organization with gross receipts exceeding $1,339,500 (§ 6652(c)(1)(A))

Managers (§ 6652(c)(1)(B))

Public inspection of annual returns and reports (§ 6652(c)(1)(C))

Public inspection of applications for exemption and notice of status

(§ 6652(c)(1)(D))

$130

$10

$25

$25

Organization (§ 6652(c)(1)(A))

(2) for failure to file a return required

under § 6034 (relating to returns by cer-

Maximum Penalty

Lesser of $13,000 or 5% of gross

receipts of the organization for

the year.

$66,500

$6,500

$13,000

No Limit

tain trust) or § 6043(b) (relating to terminations, etc., of exempt organizations):

Scenario

Organization or trust (§ 6652(c)(2)(A))

Managers (§ 6652(c)(2)(B))

Split-Interest Trust (§ 6652(c)(2)(C)(ii))

Any trust with gross income exceeding $334,500 (§ 6652(c)(2)(C)(ii))

Daily Penalty

$10

$10

$25

$130

Maximum Penalty

$6,500

$6,500

$13,000

$66,500

Daily Penalty

$130

$130

Maximum Penalty

$66,500

$13,000

(3) for failure to file a disclosure required under § 6033(a)(2):

Scenario

Tax–exempt entity (§ 6652(c)(3)(A))

Failure to comply with written demand (§ 6652(c)(3)(B)(ii))

.54 Other Assessable Penalties with

Respect to the Preparation of Tax Returns

for Other Persons. In the case of any failure relating to a return or claim for refund

Scenario

Failure to furnish copy to taxpayer (§ 6695(a))

Failure to sign return (§ 6695(b))

Failure to furnish identifying number (§ 6695(c))

Failure to retain copy or list (§ 6695(d))

Failure to file correct information returns (§ 6695(e))

Negotiation of check (§ 6695(f))

Failure to be diligent in determining eligibility for head of household

filing status, child tax credit, American Opportunity tax credit, and

earned income credit (§ 6695(g))

Bulletin No. 2025–45

705

filed in 2027, the penalty amounts under

§ 6695 are:

Per Return or Claim for

Refund

$65

$65

$65

$65

$65 per return and item in

return

$665 per check

$665 per failure

Maximum Penalty

$33,000

$33,000

$33,000

$33,000

$33,000

No limit

No limit

November 3, 2025

.55 Failure to File Partnership Return.

In the case of any return required to be

filed in 2027, the dollar amount used to

determine the amount of the penalty under

§ 6698(b)(1) is $260.

.56 Failure to File S Corporation

Return. In the case of any return required

to be filed in 2027, the dollar amount used

to determine the amount of the penalty

under § 6699(b)(1) is $260.

.57 Failure to File Correct Information

Returns. In the case of any failure relating

to a return required to be filed in 2027, the

penalty amounts under § 6721 are:

Scenario

Penalty Per Return

$340

$60

$130

General Rule (§ 6721(a)(1))

Corrected on or before 30 days after required filing date (§ 6721(b)(1))

Corrected after 30th day but on or before August 1, 2026 (§ 6721(b)(2))

(2) for persons with average annual

gross receipts for the most recent three

Calendar Year Maximum

$4,191,500

$698,500

$2,095,500

taxable years of $5,000,000 or less, for

failure to file correct information returns:

Scenario

General Rule (§ 6721(d)(1)(A))

Corrected on or before 30 days after required filing date (§ 6721(d)(1)(B))

Corrected after 30th day but on or before August 1, 2026 (§ 6721(d)(1)(C))

(3) for failure to file correct information returns due to intentional disregard

(1) for persons with average annual

gross receipts for the most recent three

taxable years of more than $5,000,000,

for failure to file correct information

returns:

Penalty Per Return

$340

$60

$130

Calendar Year Maximum

$1,397,000

$244,500

$698,500

of the filing requirement (or the correct

information reporting requirement):

Scenario

Penalty Per Return

Return other than a return required to be filed under

§§ 6045(a), 6041A(b), 6050H, 6050I, 6050J, 6050K,

or 6050L (§ 6721(e)(2)(A))

Return required to be filed under §§ 6045(a), 6050K,

or 6050L (§ 6721(e)(2)(B))

Return required to be filed under § 6050I(a)

(§ 6721(e)(2)(C))

Return required to be filed under § 6050V (§ 6721(e)

(2)(D))

Greater of (i) $690, or (ii) 10% of aggregate amount of

items required to be reported correctly

.58 Failure to Furnish Correct Payee

Statements. In the case of any failure

relating to a statement required to be furnished in 2027, the penalty amounts under

§ 6722 are:

Greater of (i) $690, or (ii) 5% of aggregate amount of

items required to be reported correctly

Greater of (i) $34,930, or (ii) amount of cash received

up to $139,500

Greater of (i) $690, or (ii) 10% of the value of

the benefit of any contract with respect to which

information is required to be included on the return

No limit

No limit

No limit

(1) for persons with average annual

gross receipts for the most recent three

taxable years of more than $5,000,000, for

failure to furnish correct payee statements:

Scenario

General Rule (§ 6722(a)(1))

Corrected on or before 30 days after required furnishing date (§ 6722(b)(1))

Corrected after 30th day but on or before August 1, 2026 (§ 6722(b)(2))

November 3, 2025

Calendar Year

Maximum

No limit

706

Penalty Per Statement Calendar Year Maximum

$340

$4,191,500

$60

$698,500

$130

$2,095,500

Bulletin No. 2025–45

(2) for persons with average annual

gross receipts for the most recent 3 taxable

years of $5,000,000 or less, for failure to

furnish correct payee statements:

Scenario

General Rule (§ 6722(d)(1)(A))

Corrected on or before 30 days after required furnishing date (§ 6722(d)(1)(B))

Corrected after 30th day but on or before August 1, 2026 (§ 6722(d)(1)(C))

(3) for failure to furnish correct payee

statements due to intentional disregard of

the requirement to furnish a payee state-

Penalty Per Statement Calendar Year Maximum

$340

$1,397,000

$60

$244,500

$130

$698,500

ment (or the correct information reporting

requirement):

Scenario

Penalty Per Statement

Payee statement other than a statement required under

§§ 6045(b), 6041A(e) (in respect of a return required under

§§ 6041A(b)), 6050H(d), 6050J(e), 6050K(b), or 6050L(c)

(§ 6722(e)(2)(A))

Payee statement required under §§ 6045(b), 6050K(b), or

6050L(c) (§ 6722(e)(2)(B))

Greater of (i) $690, or (ii) 10% of aggregate

amount of items required to be reported

correctly

.59 Failure to Comply with Information Reporting Requirements Relating to

Qualified Opportunity Funds and Qualified Rural Opportunity Funds. In the case

of any return required to be filed in 2027,

the penalty amount under § 6726 for failure to file a return in the time and manner

prescribed for a qualified opportunity fund

or qualified rural opportunity fund under

§ 6039K is $510 per day with a maximum

penalty of $10,000 per return ($51,000

if the gross assets of the fund are greater

than $10,230,000). If the failure to file in

the time and manner prescribed is due to

intentional disregard, then the penalty is

$2,550 per day with a maximum penalty

is $51,000 per return ($255,000 if the

gross assets of the fund are greater than

$10,230,000).

.60 Revocation or Denial of Passport

in Case of Certain Tax Delinquencies.

For calendar year 2026, the amount of a

serious delinquent tax debt under § 7345

is $66,000.

.61 Attorney Fee Awards. For fees

incurred in calendar year 2026, the attorney fee award limitation under § 7430(c)

(1)(B)(iii) is $260 per hour.

.62 Periodic Payments Received Under

Qualified Long-Term Care Insurance

Contracts or Under Certain Life Insurance Contracts. For calendar year 2026,

Bulletin No. 2025–45

Greater of (i) $690, or (ii) 5% of aggregate

amount of items required to be reported

correctly

the stated dollar amount of the per diem

limitation under § 7702B(d)(4), regarding

periodic payments received under a qualified long-term care insurance contract or

periodic payments received under a life

insurance contract that are treated as paid

by reason of the death of a chronically ill

individual, is $430.

.63 Qualified Small Employer Health

Reimbursement Arrangement. For taxable years beginning in 2026, to qualify

as a qualified small employer health reimbursement arrangement under § 9831(d),

the arrangement must provide that the

total amount of payments and reimbursements for any year cannot exceed $6,450

($13,100 for family coverage).

SECTION 5. EFFECTIVE DATE

.01 2025 Inflation-Adjusted Items. Section 3 of this revenue procedures applies

to taxable years beginning in 2025.

.02 2026 Inflation-Adjusted Items.

Except as provided in section 5.03 of this

revenue procedure, section 4 of this revenue procedure applies to taxable years

beginning in 2026.

.03 Calendar Year Rule. Section 4 of

this revenue procedure applies to transactions or events occurring in calendar year

2026 for purposes of sections 4.07 (reha-

707

Calendar Year

Maximum

No limit

No limit

bilitation expenditures treated as separate

new building), 4.08 (low-income housing credit), 4.13 (transportation mainline

pipeline construction industry optional

expense substantiation rules for payments

to employees under accountable plans),

4.19 (private activity bonds volume cap),

4.20 (loan limits on agricultural bonds),

4.21 (general arbitrage rebate rules), 4.22

(safe harbor rules for broker commissions on guaranteed investment contracts

or investments purchased for a yield

restricted defeasance escrow), 4.37 (expatriation to avoid taxes), 4.40 (debt instruments arising out of sales or exchanges),

4.41 (limitation on aggregate decrease in

value of qualified real property in decedent’s gross estate), 4.42 (annual exclusion

for gifts and annual exception for covered

gifts and covered bequests received from

a covered expatriate), 4.43 (tax on arrow

shafts), 4.443 (passenger air transportation excise tax), 4.45 (tax on certain uses

of crude oil and petroleum products), 4.48

(persons against whom a federal tax lien

is not valid), 4.49 (property exempt from

levy), 4.51 (interest on a certain portion

of the estate tax payable in installments),

4.60 (revocation or denial of passport in

case of certain tax delinquencies), 4.61

(attorney fee awards), and 4.62 (periodic

payments received under qualified long-

November 3, 2025

term care insurance contracts or under

certain life insurance contracts) of this

revenue procedure.

SECTION 6. EFFECT ON OTHER

DOCUMENTS

Rev. Proc. 2024-40 is modified.

November 3, 2025

SECTION 7. DRAFTING

INFORMATION

Mr. Finn at (202) 317-4718 (not a toll-free

number).

The principal author of this revenue

procedure is Michael Finn of the Office

of Associate Chief Counsel (Income Tax

& Accounting). For further information

regarding this revenue procedure, contact

708

Bulletin No. 2025–45

Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

­effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus,

if an earlier ruling held that a principle

applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is

being made clear because the language

has caused, or may cause, some confusion. It is not used where a position in a

prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously

published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations

to show that the previous published rulings will not be applied pending some

future action such as the issuance of new

or amended regulations, the outcome of

cases in litigation, or the outcome of a

Service study.

Abbreviations

The following abbreviations in current

use and formerly used will appear in

material published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2025–45

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

November 3, 2025

Numerical Finding List1

Bulletin 2025–45

Announcements:

2025-19, 2025-29 I.R.B. 191

2025-20, 2025-31 I.R.B. 271

2025-21, 2025-32 I.R.B. 312

2025-24, 2025-36 I.R.B. 359

2025-25, 2025-36 I.R.B. 360

2025-26, 2025-40 I.R.B. 444

Notices:

2025-32, 2025-27 I.R.B. 1

2025-33, 2025-27 I.R.B. 4

2025-34, 2025-27 I.R.B. 6

2025-35, 2025-27 I.R.B. 8

2025-31, 2025-28 I.R.B. 14

2025-36, 2025-30 I.R.B. 192

2025-37, 2025-30 I.R.B. 198

2025-40, 2025-31 I.R.B. 266

2025-39, 2025-32 I.R.B. 308

2025-28, 2025-34 I.R.B. 316

2025-41, 2025-34 I.R.B. 325

2025-42, 2025-36 I.R.B. 351

2025-43, 2025-36 I.R.B. 356

2025-44, 2025-37 I.R.B. 386

2025-45, 2025-37 I.R.B. 388

2025-38, 2025-38 I.R.B. 392

2025-47, 2025-40 I.R.B. 441

2025-51, 2025-41 I.R.B. 448

2025-52, 2025-41 I.R.B. 474

2025-54, 2025-41 I.R.B. 479

2025-46, 2025-43 I.R.B. 533

2025-50, 2025-43 I.R.B. 542

2025-53, 2025-43 I.R.B. 624

2025-55, 2025-43 I.R.B. 625

2025-49, 2025-44 I.R.B. 627

2025-57, 2025-45 I.R.B. 692

2025-61, 2025-45 I.R.B. 693

Revenue Procedures:—Continued

2025-26, 2025-33 I.R.B. 315

2025-28, 2025-38 I.R.B. 393

2025-30, 2025-42 I.R.B. 489

2025-27, 2025-44 I.R.B. 646

2025-32, 2025-45 I.R.B. 695

Revenue Rulings:

2025-13, 2025-28 I.R.B. 11

2025-14, 2025-32 I.R.B. 300

2025-15, 2025-32 I.R.B. 302

2025-16, 2025-35 I.R.B. 342

2025-17, 2025-36 I.R.B. 349

2025-18, 2025-37 I.R.B. 365

2025-19, 2025-41 I.R.B. 445

2025-20, 2025-41 I.R.B. 447

2025-21, 2025-45 I.R.B. 690

Treasury Decisions:

10021, 2025-31 I.R.B. 264

10031, 2025-32 I.R.B. 304

10033, 2025-40 I.R.B. 411

10035, 2025-42 I.R.B. 484

10034, 2025-43 I.R.B. 523

10036, 2025-43 I.R.B. 525

Proposed Regulations:

REG-125710-18, 2025-30 I.R.B. 263

REG-107459-24, 2025-32 I.R.B. 313

REG-132805-17, 2025-35 I.R.B. 342

REG-108822-25, 2025-36 I.R.B. 361

REG-129260-16, 2025-39 I.R.B. 410

REG-108673-25, 2025-42 I.R.B. 494

REG-110032-25, 2025-42 I.R.B. 495

REG-112261-24; REG-116085-23, 2025-42

I.R.B. 522

Revenue Procedures:

2025-22, 2025-30 I.R.B. 200

2025-24, 2025-31 I.R.B. 273

2025-25, 2025-32 I.R.B. 311

1

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin

2025–52, dated December 22, 2025.

November 3, 2025

ii

Bulletin No. 2025–45

Finding List of Current Actions on

Previously Published Items1

Bulletin 2025–45

1

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin

2025–52, dated December 22, 2025.

Bulletin No. 2025–45

iii

November 3, 2025

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

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