# Including the instructions for (2023) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Af2688d1fadd5c544 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text TAX YEAR 2023 1040 (and 1040-SR) INSTRUCTIONS Including the instructions for Schedules 1 through 3 2023 Changes See What’s New in these instructions. Future Developments See IRS.gov and IRS.gov/Forms, and for the latest information about developments related to Forms 1040 and 1040-SR and their instructions, such as legislation enacted after they were published, go to IRS.gov/Form1040. Free File is the fast, safe, and free way to prepare and e-file your taxes. See IRS.gov/FreeFile. Pay Online. It’s fast, simple, and secure. Go to IRS.gov/Payments. Department of the Treasury Internal Revenue Service www.irs.gov Dec 27, 2023 Cat. No. 24811V R Table of Contents Contents Department of the Treasury Internal Revenue Service Page What's New . . . . . . . . . . . . . . . . . . . . . . . . 6 Filing Requirements . . . . . . . . . . . . . . . . . . 8 Do You Have To File? . . . . . . . . . . . . . . 8 When and Where Should You File? . . . . . 8 Line Instructions for Forms 1040 and 1040-SR . . . . . . . . . . . . . . . . . . . . . . 12 Name and Address . . . . . . . . . . . . . . . 12 Social Security Number (SSN) . . . . . . . 12 Filing Status . . . . . . . . . . . . . . . . . . . 13 Dependents, Qualifying Child for Child Tax Credit, and Credit for Other Dependents . . . . . . . . . . . . . . 17 Income . . . . . . . . . . . . . . . . . . . . . . . 23 Total Income and Adjusted Gross Income . . . . . . . . . . . . . . . . . . . . . 31 Tax and Credits . . . . . . . . . . . . . . . . . 31 Payments . . . . . . . . . . . . . . . . . . . . . 38 Refund . . . . . . . . . . . . . . . . . . . . . . . 58 Amount You Owe . . . . . . . . . . . . . . . . 61 2 Contents Page Sign Your Return . . . . . . . . . . . . . . . . 63 Assemble Your Return . . . . . . . . . . . . . 64 2023 Tax Table . . . . . . . . . . . . . . . . . . . . . 65 General Information . . . . . . . . . . . . . . . . . 78 Refund Information . . . . . . . . . . . . . . . . . . 84 Instructions for Schedule 1 . . . . . . . . . . . . . 85 Instructions for Schedule 2 . . . . . . . . . . . . . 97 Instructions for Schedule 3 . . . . . . . . . . . . 102 Tax Topics . . . . . . . . . . . . . . . . . . . . . . . 105 Disclosure, Privacy Act, and Paperwork Reduction Act Notice . . . . . . . . . . . . 107 Major Categories of Federal Income and Outlays for Fiscal Year 2022 . . . . . . . . 109 Index . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Form 1040 and 1040-SR Helpful Hints For 2023, you will use Form 1040 or, if you were born before January 2, 1959, you have the option to use Form 1040-SR. You may only need to file Form 1040 or 1040-SR and none of the numbered schedules, Schedules 1 through 3. However, if your return is more complicated (for example, you claim certain deductions or credits or owe additional taxes), you will need to complete one or more of the numbered schedules. Below is a general guide to which schedule(s) you will need to file based on your circumstances. See the instructions for the schedules for more information. If you e-file your return, the software you use will generally determine which schedules you need. IF YOU... THEN USE... Have additional income, such as business or farm income or loss, unemployment compensation, or prize or award money. Schedule 1, Part I Have any adjustments to income, such as student loan interest, self-employment tax, or educator expenses. Schedule 1, Part II Owe alternative minimum tax (AMT) or need to make an excess advance premium tax credit repayment. Schedule 2, Part I Owe other taxes, such as self-employment tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax-favored accounts. Schedule 2, Part II Can claim a nonrefundable credit (other than the child tax credit or the credit for other dependents), such as the foreign tax credit, education credits, or general business credit. Schedule 3, Part I Can claim a refundable credit (other than the earned income credit, American opportunity credit, or additional child tax credit), such as the net premium tax credit. Have other payments, such as an amount paid with a request for an extension to file or excess social security tax withheld. Schedule 3, Part II 3 The Taxpayer Advocate Service Is Here To Help You What is the Taxpayer Advocate Service? The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS) that helps taxpayers and protects taxpayer rights. TAS strives to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights. What can TAS do for you? TAS can help you if your tax problem is causing a financial difficulty, you've tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn't working as it should. And the service is free. If you qualify for TAS assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if: • Your problem is causing a financial difficulty for you, your family, or your business. • You face (or your business is facing) an immediate threat of adverse action. • You’ve tried to contact the IRS but no one has responded, or the IRS hasn’t responded by the date promised. How can you reach TAS? TAS has offices in every state, the District of Columbia, and Puerto Rico. To find your advocate’s number: • Go to TaxpayerAdvocate.IRS.gov/contact-us; • Download Publication 1546, Taxpayer Advocate Service Is Your Voice at the IRS. If you do not have Internet access, you can call the IRS toll free at 800-TAX-FORM (800-829-3676) and ask for a copy of Publication 1546; • Check your local directory; or • Call TAS toll free at 877-777-4778. How can you learn about your taxpayer rights? The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS. The TAS website TaxpayerAdvocate.IRS.gov can help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them. How else does TAS help taxpayers? TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to TAS at IRS.gov/SAMS. Be sure not to include any personal taxpayer information. Low Income Taxpayer Clinics Help Taxpayers Low Income Taxpayer Clinics (LITCs) are independent from the Internal Revenue Service (IRS) and the Taxpayer Advocate Service (TAS). LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page at TaxpayerAdvocate.IRS.gov/LITCMap or IRS Publication 4134, Low Income Taxpayer Clinic List. This publication is available online at IRS.gov/Forms-Pubs or by calling the IRS toll free at 800-TAX-FORM (800-829-3676). Suggestions for Improving the IRS Taxpayer Advocacy Panel Taxpayers have an opportunity to provide direct feedback to the Internal Revenue Service (IRS) through the Taxpayer Advocacy Panel (TAP). The TAP is a Federal Advisory Committee comprised of an independent panel of citizen volunteers who listen to taxpayers, identify taxpayers' systemic issues, and make suggestions for improving IRS customer service. Contact TAP at ImproveIRS.org. 4 Affordable Care Act — What You Need To Know Requirement To Reconcile Advance Payments of the Premium Tax Credit The premium tax credit helps pay premiums for health insurance purchased from the Marketplace. Eligible individuals may have advance payments of the premium tax credit made on their behalf directly to the insurance company. If you or a family member enrolled in health insurance through the Marketplace and advance payments of the premium tax credit were made to your insurance company to reduce your monthly premium payment, you must attach Form 8962 to your return to reconcile (compare) the advance payments with your premium tax credit for the year. The Marketplace is required to send Form 1095-A by January 31, 2024, listing the advance payments and other information you need to complete Form 8962. 1. You will need Form 1095-A from the Marketplace. 2. Complete Form 8962 to claim the credit and to reconcile your advance credit payments. 3. Include Form 8962 with your Form 1040, Form 1040-SR, or Form 1040-NR. (Don’t include Form 1095-A.) Health Coverage Reporting If you or someone in your family was an employee in 2023, the employer may be required to send you Form 1095-C. Part II of Form 1095-C shows whether your employer offered you health insurance coverage and, if so, information about the offer. You should receive Form 1095-C by early March 2024. This information may be relevant if you purchased health insurance coverage for 2023 through the Health Insurance Marketplace and wish to claim the premium tax credit on Schedule 3, line 9. However, you don’t need to wait to receive this form to file your return. You may rely on other information received from your employer. If you don’t wish to claim the premium tax credit for 2023, you don’t need the information in Part II of Form 1095-C. For more information on who is eligible for the premium tax credit, see the Instructions for Form 8962. Reminder: Health care coverage. If you need health care coverage, go to www.HealthCare.gov to learn about health insurance options for you and your family, how to buy health insurance, and how you might qualify to get financial assistance to buy health insurance. 5 What's New Due date of return. File Form 1040 or 1040-SR by April 15, 2024. If you live in Maine or Massachusetts, you have until April 17, 2024, because of the Patriots’ Day and Emancipation Day holidays. Standard deduction amount increased. For 2023, the standard deduction amount has been increased for all filers. The amounts are: • Single or Married filing separately—$13,850. • Married filing jointly or Qualifying surviving spouse—$27,700. • Head of household—$20,800. Additional child tax credit amount increased. The maximum additional child tax credit amount has increased to $1,600 for each qualifying child. New clean vehicle credit. The credit for new qualified plug-in electric drive motor vehicles has changed. This credit is now known as the clean vehicle credit. The maximum amount of the credit and some of the requirements to claim the credit have changed. The credit is still reported on Form 8936 and Schedule 3, line 6f. For more information, see Form 8936. Previously owned clean vehicle credit. This credit is available for previously owned clean vehicles acquired and placed in service after 2022. For more information, see Form 8936. New lines on Schedule 3. This year Schedule 3 has new lines. • Line 5 has been separated into lines 5a and 5b so that the residential clean energy credit and the energy efficient home improvement credit reported on Form 5695 each have their own line. 6 For information about any additional changes to the 2023 tax law or any other developments affecting Form 1040 or 1040-SR or the instructions, go to IRS.gov/ Form1040. • New line 6m was added to report the credit for previously owned clean vehicles from Form 8936. • Line 13c will be used to report the elective payment election amount from Form 3800. Credits for qualified sick and family leave wages. The credits for qualified sick and family leave wages paid in 2023 for leave taken before April 1, 2021, and for leave taken after March 31, 2021, and before October 1, 2021, are now reported on Schedule 3, line 13z. See Schedule H (Form 1040) for more information. Alternative motor vehicle credit. The alternative motor vehicle credit has expired. Self-employed health insurance deduction. If you can take the self-employed health insurance deduction on Schedule 1, line 17, and you can't use the Self-Employed Health Insurance Deduction Worksheet in these instructions, you will now use Form 7206, instead of Pub. 535, to figure your deduction. Qualified charitable distribution one-time election. Beginning in 2023, you can elect to make a one-time distribution up to $50,000 from an individual retirement account to charities through a charitable remainder annuity trust, a charitable remainder unitrust, or a charitable gift annuity each of which is funded only by qualified charitable distributions. See Pub. 590-B for more information. Increase in required minimum distribution age. If you reach age 72 in 2023, the required beginning date for your first required minimum distribution is April 1, 2025. See Pub. 590-B for more information. Insurance premiums for retired public safety officers. Eligible retired public safety officers can exclude from income up to $3,000 of distributions from their eligible retirement plan that is paid directly to them and is used to pay for health insurance premiums. For more information, see Insurance Premiums for Retired Public Safety Officers, later. Exception to the 10% additional tax for early distributions. The exception to the 10% additional tax for early distributions include the following. • Distributions from a retirement plan in connection with federally declared disasters. • Distributions from a retirement plan made to someone who is terminally ill. • Distributions to certain firefighters who meet the age or years of service requirement. See Form 5329 and Pub. 590-B for more information. Direct File. The IRS is taking steps to implement a Direct File pilot during the 2024 filing season. This pilot will give eligible taxpayers an option to prepare and electronically file their 2023 federal tax returns directly with the IRS for free. The Direct File pilot will be offered to eligible taxpayers in participating states who have relatively simple tax returns reporting only certain types of income and claiming limited credits and deductions. See IRS.gov/DirectFile for pilot information and updates. Free Software Options for Doing Your Taxes Why have millions of Americans used Free File? • Security—Free File uses the latest encryption technology to safeguard your information. • Flexible Payments—File early; pay by April 15, 2024 (for most people). • Greater Accuracy—Fewer errors mean faster processing. • Quick Receipt—Get an acknowledgment that your return was received and accepted. • Go Green—Reduce the amount of paper used. • It’s Free—through IRS.gov/FreeFile. • Faster Refunds—Join the eight in 10 taxpayers who get their refunds faster by using direct deposit and e-file. Do Your Taxes for Free If your adjusted gross income was $79,000 or less in 2023, you can use free tax software to prepare and e-file your tax return. Earned more? Use Free File Fillable Forms. Free File. This public–private partnership, between the IRS and tax software providers, makes approximately a dozen brand-name commercial software products and e-file available for free. Seventy percent of the nation’s taxpayers are eligible. Just visit IRS.gov/FreeFile for details. Free File combines all the benefits of e-file and easy-to-use software at no cost. Guided questions will help ensure you get all the tax credits and deductions you are due. It’s fast, safe, and free. You can review each software provider’s criteria for free usage or use an online tool to find which free software products match your situation. Some software providers offer state tax return preparation for free. Free File Fillable Forms. The IRS offers electronic versions of IRS paper forms that can also be e-filed for free. Free File Fillable Forms is best for people experienced in preparing their own tax returns. There are no income limitations. Free File Fillable Forms does basic math calculations. It supports only federal tax forms. Free Tax Help Available Nationwide Volunteers are available in communities nationwide providing free tax assistance to low-to-moderate income (generally under $64,000 in adjusted gross income) and elderly taxpayers (age 60 and older). At selected sites, taxpayers can input and electronically file their own tax return with the assistance of an IRS-certified volunteer. See How To Get Tax Help near the end of these instructions for additional information or visit IRS.gov/VITA for a VITA/TCE site near you! IRS.gov is the gateway to all electronic services offered by the IRS, as well as the spot to download forms at IRS.gov/Forms. Make your tax payments online—it’s easy. You can make payments online, by phone, or from a mobile device. Paying online is safe and secure; it puts you in control of paying your tax bill and gives you peace of mind. You determine the payment date, and you will receive an immediate confirmation from the IRS. Go to IRS.gov/Payments to see all your online payment options. 7 Filing Requirements Do You Have To File? Use Chart A, B, or C to see if you must file a return. U.S. citizens who lived in or had income from a U.S. territory should see Pub. 570. Residents of Puerto Rico can use Tax Topic 901 to see if they must file. Even if you do not otherwise TIP have to file a return, you should file one to get a refund of any federal income tax withheld. You should also file if you are eligible for any of the following credits. • Earned income credit. • Additional child tax credit. • American opportunity credit. • Credit for federal tax on fuels. • Premium tax credit. • Credits for sick and family leave. See Pub. 501 for details. Also see Pub. 501 if you do not have to file but received a Form 1099-B (or substitute statement). Requirement to reconcile advance payments of the premium tax credit. If you, your spouse with whom you are filing a joint return, or a dependent was enrolled in coverage through the Marketplace for 2023 and advance payments of the premium tax credit were made for this coverage, you must file a 2023 return and attach Form 8962. You (or whoever enrolled you) should have received Form 1095-A from the Marketplace with information about your coverage and any advance payments. You must attach Form 8962 even if someone else enrolled you, your spouse, or your dependent. If you are a dependent who is claimed on someone else's 2023 return, you do not have to attach Form 8962. Exception for certain children under age 19 or full-time students. If certain conditions apply, you can elect to include on your return the income of a child who was under age 19 at the end 8 These rules apply to all U.S. citizens, regardless of where they live, and resident aliens. Have you tried IRS e-file? It's the fastest way to get your refund and it's free if you are eligible. Visit IRS.gov for details. of 2023 or was a full-time student under age 24 at the end of 2023. To do so, use Form 8814. If you make this election, your child doesn't have to file a return. For details, use Tax Topic 553 or see Form 8814. A child born on January 1, 2000, is considered to be age 24 at the end of 2023. Do not use Form 8814 for such a child. Resident aliens. These rules also apply if you were a resident alien. Also, you may qualify for certain tax treaty benefits. Generally, you are a resident alien if you meet either the green card test or the substantial presence test for 2023. See Pub. 519 for details. Nonresident aliens and dual-status aliens. These rules also apply if you were a nonresident alien or a dual-status alien and both of the following apply. • You were married to a U.S. citizen or resident alien at the end of 2023. • You elected to be taxed as a resident alien. See Pub. 519 for details. Specific rules apply to determine if you are a resident alien, CAUTION nonresident alien, or dual-status alien. Most nonresident aliens and dual-status aliens have different filing requirements and may have to file Form 1040-NR. Pub. 519 discusses these requirements and other information to help aliens comply with U.S. tax law. ! When and Where Should You File? File Form 1040 or 1040-SR by April 15, 2024. If you live in Maine or Massachusetts, you have until April 17, because of the Patriots’ Day and Emancipation Day holidays. If you file after this date, you may have to pay interest and penalties. See Interest and Penalties, later. If you were serving in, or in support of, the U.S. Armed Forces in a designated combat zone or contingency operation, you may be able to file later. See Pub. 3 for details. If you e-file your return, there is no need to mail it. However, if you choose to mail it instead, filing instructions and addresses are at the end of these instructions. The chart at the end of these in- TIP structions provides the current address for mailing your return. Use these addresses for Forms 1040 or 1040-SR filed in 2024. The address for returns filed after 2024 may be different. See IRS.gov/Form1040 for any updates. What if You Can't File on Time? You can get an automatic 6-month extension if, no later than the date your return is due, you file Form 4868. If you want to apply for an extension electronically, see Form 4868 for details. An automatic 6-month extension to file doesn't extend the CAUTION time to pay your tax. If you don’t pay your tax by the original due date of your return, you will owe interest on the unpaid tax and may owe penalties. See Form 4868. ! If you are a U.S. citizen or resident alien, you may qualify for an automatic extension of time to file without filing Form 4868. You qualify if, on the due date of your return, you meet one of the following conditions. • You live outside the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico. • You are in military or naval service on duty outside the United States and Puerto Rico. This extension gives you an extra 2 months to file and pay the tax, but inter- est will be charged from the original due date of the return on any unpaid tax. You must include a statement showing that you meet the requirements. If you are still unable to file your return by the end of the 2-month period, you can get an additional 4 months if, no later than June 17, 2024, you file Form 4868. This 4-month extension of time to file doesn't extend the time to pay your tax. See Form 4868. Private Delivery Services If you choose to mail your return, you can use certain private delivery services designated by the IRS to meet the “time- ly mailing treated as timely filing/ paying” rule for tax returns and payments. These private delivery services include only the following. • FedEx First Overnight, FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Next Flight Out, FedEx International Priority, FedEx International First, and FedEx International Economy. • DHL Express 9:00, DHL Express 10:30, DHL Express 12:00, DHL Express Worldwide, DHL Express Envelope, DHL Import Express 10:30, DHL Import Express 12:00, and DHL Import Express Worldwide. • UPS Next Day Air Early A.M., UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express. To check for any updates to the list of designated private delivery services, go to IRS.gov/PDS. For the IRS mailing address to use if you’re using a private delivery service, go to IRS.gov/ PDSStreetAddresses. The private delivery service can tell you how to get written proof of the mailing date. Chart A—For Most People IF your filing status is . . . AND at the end of 2023 you were* . . . THEN file a return if your gross income** was at least . . . Single under 65 65 or older $13,850 15,700 Married filing jointly*** under 65 (both spouses) 65 or older (one spouse) 65 or older (both spouses) $27,700 29,200 30,700 Married filing separately any age Head of household under 65 65 or older $20,800 22,650 Qualifying surviving spouse under 65 65 or older $27,700 29,200 $5 *If you were born on January 1, 1959, you are considered to be age 65 at the end of 2023. (If your spouse died in 2023 or if you are preparing a return for someone who died in 2023, see Pub. 501.) **Gross income means all income you received in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Don’t include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2023, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for lines 6a and 6b to figure the taxable part of social security benefits you must include in gross income. Gross income includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, don’t reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9. ***If you didn't live with your spouse at the end of 2023 (or on the date your spouse died) and your gross income was at least $5, you must file a return regardless of your age. 9 Chart B—For Children and Other Dependents (See Who Qualifies as Your Dependent, later.) If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return. In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust. Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income. Single dependents. Were you either age 65 or older or blind? No. You must file a return if any of the following apply. • Your unearned income was over $1,250. • Your earned income was over $13,850. • Your gross income was more than the larger of— • $1,250, or • Your earned income (up to $13,450) plus $400. Yes. You must file a return if any of the following apply. • Your unearned income was over $3,100 ($4,950 if 65 or older and blind). • Your earned income was over $15,700 ($17,550 if 65 or older and blind). • Your gross income was more than the larger of— • $3,100 ($4,950 if 65 or older and blind), or • Your earned income (up to $13,450) plus $2,250 ($4,100 if 65 or older and blind). Married dependents. Were you either age 65 or older or blind? No. You must file a return if any of the following apply. • Your unearned income was over $1,250. • Your earned income was over $13,850. • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. • Your gross income was more than the larger of— • $1,250, or • Your earned income (up to $13,450) plus $400. Yes. You must file a return if any of the following apply. • Your unearned income was over $2,750 ($4,250 if 65 or older and blind). • Your earned income was over $15,350 ($16,850 if 65 or older and blind). • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. • Your gross income was more than the larger of— • $2,750 ($4,250 if 65 or older and blind), or • Your earned income (up to $13,450) plus $1,900 ($3,400 if 65 or older and blind). 10 Chart C—Other Situations When You Must File You must file a return if any of the conditions below apply for 2023. 1. You owe any special taxes, including any of the following (see the instructions for Schedule 2). a. Alternative minimum tax. b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. c. Household employment taxes. d. Social security and Medicare tax on tips you didn't report to your employer or on wages you received from an employer who didn't withhold these taxes. e. Uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional taxes on health savings accounts. f. Recapture taxes. 2. You (or your spouse if filing jointly) received health savings account, Archer MSA, or Medicare Advantage MSA distributions. 3. You had net earnings from self-employment of at least $400. 4. You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. 5. Advance payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage through the Marketplace. You or whoever enrolled you should have received Form(s) 1095-A showing the amount of the advance payments. 6. You are required to include amounts in income under section 965 or you have a net tax liability under section 965 that you are paying in installments under section 965(h) or deferred by making an election under section 965(i). Need more information or forms? Visit IRS.gov. 11 Line Instructions for Forms 1040 and 1040-SR Name and Address Print or type the information in the spaces provided. If you are married filing a separate return, enter your spouse's name in the entry space below the filing status checkboxes instead of below your name. If you filed a joint return for TIP 2022 and you are filing a joint return for 2023 with the same spouse, be sure to enter your names and SSNs in the same order as on your 2022 return. Name Change If you changed your name because of marriage, divorce, etc., be sure to report the change to the Social Security Administration (SSA) before filing your return. This prevents delays in processing your return and issuing refunds. It also safeguards your future social security benefits. Address Change If you plan to move after filing your return, use Form 8822 to notify the IRS of your new address. P.O. Box Enter your box number only if your post office doesn't deliver mail to your home. 12 ! Also see the instructions for Schedule 1 through Schedule 3 that follow the Form 1040 and 1040-SR instructions. CAUTION Free File makes available free brand-name software and free e-file. Visit IRS.gov/ FreeFile for details and to see if you are eligible. What form to file. Everyone can file Form 1040. Form 1040-SR is available to you if you were born before January 2, 1959. Fiscal year filers. If you are a fiscal year filer using a tax year other than January 1 through December 31, 2023, enter the beginning and ending months of your fiscal year in the entry space provided at the top of page 1 of Form 1040 or 1040-SR. Write-in information. If you need to write a word, code, and/or dollar amount on Form 1040 or 1040-SR to explain an item of income or deduction, but don't have enough space to enter the word, code, and/or dollar amount, you can put an asterisk next to the applicable line number and put a footnote at the bottom of page 2 of your tax return indicating the line number and the word, code, and/or dollar amount you need to enter. Section references are to the Internal Revenue Code. Foreign Address If you have a foreign address, enter the city name on the appropriate line. Don’t enter any other information on that line, but also complete the spaces below that line. Don’t abbreviate the country name. Follow the country’s practice for entering the postal code and the name of the province, county, or state. Death of a Taxpayer All payers of income, including financial institutions, should be promptly notified of the taxpayer's death. This will ensure the proper reporting of income earned by the taxpayer's estate or heirs. A deceased taxpayer's social security number shouldn't be used for tax years after the year of death, except for estate tax return purposes. Social Security Number (SSN) If a taxpayer died before filing a return for 2023, the taxpayer's spouse or personal representative may have to file and sign a return for that taxpayer. A personal representative can be an executor, administrator, or anyone who is in charge of the deceased taxpayer's property. If the deceased taxpayer didn't have to file a return but had tax withheld, a return must be filed to get a refund. The person who files the return must enter “Deceased,” the deceased taxpayer's name, and the date of death across the top of the return. If this information isn't provided, it may delay the processing of the return. An incorrect or missing SSN can increase your tax, reduce your refund, or delay your refund. To apply for an SSN, fill in Form SS-5 and return it, along with the appropriate evidence documents, to the Social Security Administration (SSA). You can get Form SS-5 online at SSA.gov/forms/ss-5.pdf, from your local SSA office, or by calling the SSA at 800-772-1213. It usually takes about 2 weeks to get an SSN once the SSA has all the evidence and information it needs. If your spouse died in 2023 and you didn't remarry in 2023, or if your spouse died in 2024 before filing a return for 2023, you can file a joint return. A joint return should show your spouse's 2023 income before death and your income for all of 2023. Enter “Filing as surviving spouse” in the area where you sign the return. If someone else is the personal representative, they must also sign. Check that both the name and SSN on your Forms 1040 or 1040-SR, W-2, and 1099 agree with your social security card. If they don’t, certain deductions and credits on Form 1040 or 1040-SR may be reduced or disallowed and you may not receive credit for your social security earnings. If your Form W-2 shows an incorrect SSN or name, notify your employer or the form-issuing agent Need more information or forms? Visit IRS.gov. as soon as possible to make sure your earnings are credited to your social security record. If the name or SSN on your social security card is incorrect, call the SSA. Once you are issued an SSN, use it to file your tax return. Use your SSN to file your tax return even if your SSN does not authorize employment or if you have been issued an SSN that authorizes employment and you lose your employment authorization. An ITIN will not be issued to you once you have been issued an SSN. If you received your SSN after previously using an ITIN, stop using your ITIN. Use your SSN instead. IRS Individual Taxpayer Identification Numbers (ITINs) for Aliens If you are a nonresident or resident alien and you don’t have and aren’t eligible to get an SSN, you must apply for an ITIN. It takes about 7 weeks to get an ITIN. If you already have an ITIN, enter it wherever your SSN is requested on your tax return. Some ITINs must be renewed. If you haven't used your ITIN on a federal tax return at least once for tax years 2020, 2021, or 2022, it has expired and must be renewed if you need to file a federal tax return. You don't need to renew your ITIN if you don't need to file a federal tax return. You can find more information at IRS.gov/ITIN. ITINs assigned before 2013 TIP have expired and must be renewed if you need to file a tax return. If you previously submitted a renewal application and it was approved, you do not need to renew again unless you haven't used your ITIN on a federal tax return at least once for tax years 2020, 2021, or 2022. An ITIN is for tax use only. It doesn't entitle you to social security benefits or change your employment or immigration status under U.S. law. For more information on ITINs, including application, expiration, and renewal, see Form W-7 and its instructions. If you receive an SSN after previously using an ITIN, stop using your ITIN. Use your SSN instead. Visit a local IRS office or write a letter to the IRS explaining that you now have an SSN and want all your tax records combined under your SSN. Details about what to include with the letter and where to mail it are at IRS.gov/ITIN. Nonresident Alien Spouse If your spouse is a nonresident alien, your spouse must have either an SSN or an ITIN if: • You file a joint return, or • Your spouse is filing a separate return. Presidential Election Campaign Fund This fund helps pay for Presidential election campaigns. The fund reduces candidates' dependence on large contributions from individuals and groups and places candidates on an equal financial footing in the general election. The fund also helps pay for pediatric medical research. If you want $3 to go to this fund, check the box. If you are filing a joint return, your spouse can also have $3 go to the fund. If you check a box, your tax or refund won't change. Filing Status Check only the filing status that applies to you. The ones that will usually give you the lowest tax are listed last. • Married filing separately. • Single. • Head of household. • Married filing jointly. • Qualifying surviving spouse. For information about marital status, see Pub. 501. More than one filing status can TIP apply to you. You can choose the one for which you qualify that will give you the lowest tax. Single You can check the “Single” box at the top of Form 1040 or 1040-SR if any of the following was true on December 31, 2023. • You were never married. • You were legally separated according to your state law under a decree of divorce or separate maintenance. But if, Need more information or forms? Visit IRS.gov. at the end of 2023, your divorce wasn't final (an interlocutory decree), you are considered married and can't check the box. • You were widowed before January 1, 2023, and didn't remarry before the end of 2023. But if you have a child, you may be able to use the qualifying surviving spouse filing status. See the instructions for Qualifying Surviving Spouse, later. Married Filing Jointly You can check the “Married filing jointly” box at the top of Form 1040 or 1040-SR if any of the following apply. • You were married at the end of 2023, even if you didn't live with your spouse at the end of 2023. • Your spouse died in 2023 and you didn't remarry in 2023. • You were married at the end of 2023 and your spouse died in 2024 before filing a 2023 return. A married couple filing jointly report their combined income and deduct their combined allowable expenses on one return. They can file a joint return even if only one had income or if they didn't live together all year. However, both persons must sign the return. Once you file a joint return, you can't choose to file separate returns for that year after the due date of the return. Joint and several tax liability. If you file a joint return, both you and your spouse are generally responsible for the tax and interest or penalties due on the return. This means that if one spouse doesn't pay the tax due, the other may have to. Or, if one spouse doesn't report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. You may want to file separately if: • You believe your spouse isn't reporting all of their income, or • You don’t want to be responsible for any taxes due if your spouse doesn't have enough tax withheld or doesn't pay enough estimated tax. See the instructions for Married Filing Separately. Also see Innocent Spouse Relief under General Information, later. Nonresident aliens and dual-status aliens. Generally, a married couple can't file a joint return if either spouse is a nonresident alien at any time during the 13 year. However, if you were a nonresident alien or a dual-status alien and were married to a U.S. citizen or resident alien at the end of 2023, you can elect to be treated as a resident alien and file a joint return. See Pub. 519 for details. Married Filing Separately Check the “Married filing separately” box at the top of Form 1040 or 1040-SR if you are married, at the end of 2023, and file a separate return. Enter your spouse’s name in the entry space below the filing status checkboxes. Be sure to enter your spouse’s SSN or Individual Taxpayer Identification Number (ITIN) in the space for spouse’s SSN on Form 1040 or 1040-SR. If your spouse doesn’t have and isn’t required to have an SSN or ITIN, enter “NRA” in the entry space below the filing status checkboxes. For electronic filing, enter the spouse's name or “NRA” if the spouse doesn’t have an SSN or ITIN in the entry space below the filing status checkboxes. If you are married and file a separate return, you generally report only your own income, deductions, and credits. Generally, you are responsible only for the tax on your own income. Different rules apply to people in community property states; see Pub. 555. However, you will usually pay more tax than if you use another filing status for which you qualify. Also, if you file a separate return, you can't take the student loan interest deduction or the education credits, and you will only be able to take the earned income credit and child and dependent care credit in very limited circumstances. You also can't take the standard deduction if your spouse itemizes deductions. For situations when you might want to file separately, see Joint and several tax liability, earlier. You may be able to file as head TIP of household if you had a child living with you and you lived apart from your spouse during the last 6 months of 2023. See Married persons who live apart, later. Head of Household You can check the “Head of household” box at the top of Form 1040 or 1040-SR 14 if you are unmarried and provide a home for certain other persons. You are considered unmarried for this purpose if any of the following applies. • You were legally separated according to your state law under a decree of divorce or separate maintenance at the end of 2023. But if, at the end of 2023, your divorce wasn't final (an interlocutory decree), you are considered married. • You are married but lived apart from your spouse for the last 6 months of 2023 and you meet the other rules under Married persons who live apart, later. • You are married and your spouse was a nonresident alien at any time during the year and the election to treat the alien spouse as a resident alien is not made. Check the “Head of household” box only if you are unmarried (or considered unmarried) and either Test 1 or Test 2 applies. Test 1. You paid over half the cost of keeping up a home that was the main home for all of 2023 of your parent whom you can claim as a dependent, except under a multiple support agreement (see Who Qualifies as Your Dependent, later). Your parent didn't have to live with you. Test 2. You paid over half the cost of keeping up a home in which you lived and in which one of the following also lived for more than half of the year (if half or less, see Exception to time lived with you, later). 1. Any person whom you can claim as a dependent. But don’t include: a. Your child whom you claim as your dependent because of the rule for Children of divorced or separated parents under Who Qualifies as Your Dependent, later; b. Any person who is your dependent only because the person lived with you for all of 2023; or c. Any person you claimed as a dependent under a multiple support agreement. See Who Qualifies as Your Dependent, later. 2. Your unmarried qualifying child who isn't your dependent. 3. Your married qualifying child who isn't your dependent only because you can be claimed as a dependent on someone else's 2023 return. 4. Your qualifying child who, even though you are the custodial parent, isn't your dependent because of the rule for Children of divorced or separated parents under Who Qualifies as Your Dependent, later. If the child isn't claimed as your dependent, enter the child's name in the entry space below the filing status checkboxes. If you don’t enter the name, it will take us longer to process your return. Qualifying child. To find out if someone is your qualifying child, see Step 1 under Who Qualifies as Your Dependent, later. Dependent. To find out if someone is your dependent, see Who Qualifies as Your Dependent, later. The dependents you claim are TIP those you list by name and SSN in the Dependents section on Form 1040 or 1040-SR. Exception to time lived with you. Temporary absences by you or the other person for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time lived in the home. Also see Kidnapped child, later, under Who Qualifies as Your Dependent, if applicable. If the person for whom you kept up a home was born or died in 2023, you still may be able to file as head of household. If the person is your qualifying child, the child must have lived with you for more than half the part of the year the child was alive. If the person is anyone else, see Pub. 501. Similarly, if you adopted the person for whom you kept up a home in 2023, the person was lawfully placed with you for legal adoption by you in 2023, or the person was an eligible foster child placed with you during 2023, the person is considered to have lived with you for more than half of 2023 if your main home was this person’s main home for more than half the time since the person was adopted or placed with you in 2023. Keeping up a home. To find out what is included in the cost of keeping up a home, see Pub. 501. Need more information or forms? Visit IRS.gov. Married persons who live apart. Even if you weren’t divorced or legally separated at the end of 2023, you are considered unmarried if all of the following apply. • You lived apart from your spouse for the last 6 months of 2023. Temporary absences for special circumstances, such as for business, medical care, school, or military service, count as time lived in the home. • You file a separate return from your spouse. • You paid over half the cost of keeping up your home for 2023. • Your home was the main home of your child, stepchild, or foster child for more than half of 2023 (if half or less, see Exception to time lived with you, earlier). • You can claim this child as your dependent or could claim the child except that the child's other parent can claim the child under the rule for Children of divorced or separated parents under Who Qualifies as Your Dependent, later. Adopted child. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption. Foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Qualifying Surviving Spouse You can check the “Qualifying surviving spouse” box at the top of Form 1040 or 1040-SR and use joint return tax rates for 2023 if all of the following apply. 1. Your spouse died in 2021 or 2022 and you didn't remarry before the end of 2023. 2. You have a child or stepchild (not a foster child) whom you can claim as a dependent or could claim as a dependent except that, for 2023: a. The child had gross income of $4,700 or more, b. The child filed a joint return, or c. You could be claimed as a dependent on someone else’s return. If the child isn’t claimed as your dependent, enter the child’s name in the entry space below the filing status checkboxes. If you don’t enter the name, it will take us longer to process your return. 3. This child lived in your home for all of 2023. If the child didn't live with you for the required time, see Exception to time lived with you, later. 4. You paid over half the cost of keeping up your home. 5. You could have filed a joint return with your spouse the year your spouse died, even if you didn't actually do so. If your spouse died in 2023, you can't file as qualifying surviving spouse. Instead, see the instructions for Married Filing Jointly, earlier. Adopted child. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption. Dependent. To find out if someone is your dependent, see Who Qualifies as Your Dependent, later. The dependents you claim are TIP those you list by name and SSN in the Dependents section on Form 1040 or 1040-SR. Exception to time lived with you. Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time lived in the home. Also see Kidnapped child, later, under Who Qualifies as Your Dependent, if applicable. A child is considered to have lived with you for all of 2023 if the child was born or died in 2023 and your home was the child's home for the entire time the child was alive. Similarly, if you adopted the child in 2023, or the child was lawfully placed with you for legal adoption by you in 2023, the child is considered to have lived with you for all of 2023 if your main home was this child's main home for the entire time since the child was adopted or placed with you in 2023. Keeping up a home. To find out what is included in the cost of keeping up a home, see Pub. 501. Need more information or forms? Visit IRS.gov. Digital Assets Digital assets are any digital representations of value that are recorded on a cryptographically secured distributed ledger or any similar technology. For example, digital assets include non-fungible tokens (NFTs) and virtual currencies, such as cryptocurrencies and stablecoins. If a particular asset has the characteristics of a digital asset, it will be treated as a digital asset for federal income tax purposes. Check the “Yes” box next to the question on digital assets on page 1 of Form 1040 or 1040-SR if at any time during 2023, you (a) received (as a reward, award, or payment for property or services); or (b) sold, exchanged, or otherwise disposed of a digital asset (or any financial interest in any digital asset). For example, check “Yes” if at any time during 2023 you: • Received digital assets as payment for property or services provided; • Received digital assets as a result of a reward or award; • Received new digital assets as a result of mining, staking, and similar activities; • Received digital assets as a result of a hard fork; • Disposed of digital assets in exchange for property or services; • Disposed of a digital asset in exchange or trade for another digital asset; • Sold a digital asset; or • Otherwise disposed of any other financial interest in a digital asset. You have a financial interest in a digital asset if you are the owner of record of a digital asset, or have an ownership stake in an account that holds one or more digital assets, including the rights and obligations to acquire a financial interest, or you own a wallet that holds digital assets. The following actions or transactions in 2023, alone, generally don’t require you to check “Yes”: • Holding a digital asset in a wallet or account; • Transferring a digital asset from one wallet or account you own or control to another wallet or account that you own or control; or • Purchasing digital assets using U.S. or other real currency, including 15 through the use of electronic platforms such as PayPal and Venmo. Do not leave the question unanswered. You must answer “Yes” or “No” by checking the appropriate box. For more information, go to IRS.gov/ VirtualCurrencyFAQs. How To Report Digital Asset Transactions If, in 2023, you disposed of any digital asset, which you held as a capital asset, through a sale, trade, exchange, payment, or other transfer, check “Yes” and use Form 8949 to calculate your capital gain or loss and report that gain or loss on Schedule D (Form 1040). If you received any digital asset as compensation for services or disposed of any digital asset that you held for sale to customers in a trade or business, you must report the income as you would report other income of the same type (for example, W-2 wages on Form 1040 or 1040-SR, line 1a, or inventory or services on Schedule C). If you disposed of any digital asset by gift, you may be required to file Form 709. See Who Must File and Transfers Subject to the Gift Tax in the Instructions for Form 709 for more information. Standard Deduction If you are filing Form 1040-SR, TIP you can find a Standard Deduction Chart on the last page of that form that can calculate the amount of your standard deduction in most situations. Don’t file the Standard Deduction Chart with your return. Single and Married Filing Jointly If you or your spouse (if you are married and filing a joint return) can be claimed as a dependent on someone else’s return, 16 check the appropriate box in the Standard Deduction section. If you are married and file a joint return, you can be claimed as a dependent on someone else's return if you file the joint return only to claim a refund of withheld income tax or estimated tax paid. If you were a dual-status alien, check the “Spouse itemizes on a separate return or you were a dual-status alien” box. If you were a dual-status alien and you file a joint return with your spouse who was a U.S. citizen or resident alien at the end of 2023 and you and your spouse agree to be taxed on your combined worldwide income, don’t check the box. Age/Blindness If you or your spouse (if you are married and filing a joint return) were born before January 2, 1959, or were blind at the end of 2023, check the appropriate boxes on the line labeled “Age/Blindness.” Don’t check any boxes for your spouse if your filing status is head of household. Death of spouse in 2023. If your spouse was born before January 2, 1959, but died in 2023 before reaching age 65, don’t check the box that says “Spouse was born before January 2, 1959.” A person is considered to reach age 65 on the day before the person’s 65th birthday. Example. Your spouse was born on February 14, 1958, and died on February 13, 2023. Your spouse is considered age 65 at the time of death. Check the appropriate box for your spouse. However, if your spouse died on February 12, 2023, your spouse isn't considered age 65. Don’t check the box. Death of taxpayer in 2023. If you are preparing a return for someone who died in 2023, see Pub. 501 before completing the standard deduction information. Blindness If you weren’t totally blind as of December 31, 2023, you must get a statement certified by your eye doctor (ophthalmologist or optometrist) that: • You can't see better than 20/200 in your better eye with glasses or contact lenses, or • Your field of vision is 20 degrees or less. If your eye condition isn't likely to improve beyond the conditions listed above, you can get a statement certified by your eye doctor (ophthalmologist or optometrist) to this effect instead. You must keep the statement for your records. If you receive a notice or letter but you would prefer to have it in Braille or large print, you can use Form 9000, Alternative Media Preference, to request notices in an alternative format including Braille, large print, audio, or electronic. You can attach Form 9000 to your return or mail it separately. • You can download, or view online, tax forms and publications in a variety of formats including text-only, Braille ready files, browser-friendly HTML (other than tax forms), accessible PDF, and large print. Married Filing Separately If your filing status is married filing separately and your spouse itemizes deductions on their return, check the “Spouse itemizes on a separate return or you were a dual-status alien” box. If your filing status is married filing separately and your spouse was born before January 2, 1959, or was blind at the end of 2023, you can check the appropriate box(es) on the line labeled “Age/ Blindness” if your spouse had no income, isn't filing a return, and can't be claimed as a dependent on another person's return. Need more information or forms? Visit IRS.gov. Who Qualifies as Your Dependent Step 1 Dependents, Qualifying Child for Child Tax Credit, and Credit for Other Dependents Follow the steps below to find out if a person qualifies as your dependent and to find out if your dependent qualifies you to take the child tax credit or the credit for other dependents. If you have more than four dependents, check the box under Dependents on page 1 of Form 1040 or 1040-SR and include a statement showing the information required in columns (1) through (4). TIP A qualifying child is a child who is your... Son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew) AND was ... The dependents you claim are those you list by name and SSN in the Dependents section on Form 1040 or 1040-SR. Before you begin. See the definition of Social security number, later. If you want to claim the child tax credit or the credit for other dependents, you (and your spouse if filing jointly) must have an SSN or ITIN issued on or before the due date of your 2023 return (including extensions). If an ITIN is applied for on or before the due date of a 2023 return (including extensions) and the IRS issues an ITIN as a result of the application, the IRS will consider the ITIN as issued on or before the due date of the return. Do You Have a Qualifying Child? Under age 19 at the end of 2023 and younger than you (or your spouse if filing jointly) or Under age 24 at the end of 2023, a student (defined later), and younger than you (or your spouse if filing jointly) or Any age and permanently and totally disabled (defined later) AND Who didn't provide over half of their own support for 2023 (see Pub. 501) AND Who isn't filing a joint return for 2023 or is filing a joint return for 2023 only to claim a refund of withheld income tax or estimated tax paid (see Pub. 501 for details and examples) AND Who lived with you for more than half of 2023. If the child didn't live with you for the required time, see Exception to time lived with you, later. ! If the child meets the conditions to be a qualifying child of any other person (other than your spouse if filing jointly) for 2023, see Qualifying child of more than one person, later. CAUTION 1. Do you have a child who meets the conditions to be your qualifying child? Yes. Go to Step 2. No. Go to Step 4. Need more information or forms? Visit IRS.gov. 17 Step 2 Is Your Qualifying Child Your Dependent? 1. Was the child a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico? (See Pub. 519 for the definition of a U.S. national or U.S. resident alien. If the child was adopted, see Exception to citizen test, later.) Yes. Continue No. STOP 䊲 2. Was the child married? Yes. See Married person, later. You can't claim this child as a dependent. No. Continue 䊲 3. Are you filing a joint return for 2023? Yes. You can claim this No. Continue 䊲 child as a dependent. Complete columns (1) through (3) of the Dependents section on page 1 of Form 1040 or 1040-SR for this child. Then, go to Step 3. 4. Could you be claimed as a dependent on someone else's 2023 tax return? (If the person who could claim you on their 2023 tax return is not required to file, and isn't filing a 2023 tax return or is filing a 2023 return only to claim a refund of withheld income tax or estimated tax paid, check “No.”) See Steps 1, 2, and 4. No. You can claim this Yes. STOP child as a dependent. You can't claim any Complete columns (1) dependents. Complete through (3) of the the rest of Form 1040 or Dependents section on 1040-SR and any page 1 of Form 1040 or applicable schedules. 1040-SR for this child. Then, go to Step 3. Step 3 U.S. resident alien. If the child was adopted, see Exception to citizen test, later.) Yes. Continue No. STOP 䊲 You can’t claim the child tax credit or the credit for other dependents for this child. 3. Was the child under age 17 at the end of 2023? Yes. Continue No. You can claim the 䊲 credit for other dependents for this child. Check the “Credit for other dependents” box in column (4) of the Dependents section on page 1 of Form 1040 or 1040-SR for this person. 4. Did this child have an SSN valid for employment issued before the due date of your 2023 return (including extensions)? (See Social Security Number, later.) Yes. You can claim the No. STOP child tax credit for this You can claim the credit person. Check the for other dependents for “Child tax credit” box this child. Check the in column (4) of the “Credit for other Dependents section on dependents” box in page 1 of Form 1040 or column (4) of the 1040-SR for this Dependents section on person. page 1 of Form 1040 or 1040-SR for this person. Does Your Qualifying Child Qualify You for the Child Tax Credit or Credit for Other Dependents? 1. Did the child have an SSN, ITIN, or adoption taxpayer identification number (ATIN) issued on or before the due date of your return (including extensions)? (Answer “Yes” if you are applying for an ITIN or ATIN for the child on or before the due date of your return (including extensions).) Yes. Continue No. STOP 䊲 You can’t claim the child tax credit or the credit for other dependents for this child. 2. Was the child a U.S. citizen, U.S. national, or U.S. resident alien? (See Pub. 519 for the definition of a U.S. national or 18 Need more information or forms? Visit IRS.gov. Step 4 Is Your Qualifying Relative Your Dependent? A qualifying relative is a person who is your... Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild) or Brother, sister, half brother, half sister, or a son or daughter of any of them (for example, your niece or nephew) or Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle) 3. Was your qualifying relative married? Yes. See Married No. Continue 䊲 person, later. 4. Are you filing a joint return for 2023? Yes. You can claim No. Continue 䊲 this person as a dependent. Complete columns (1) through (3) of the Dependents section on page 1 of Form 1040 or 1040-SR. Then, go to Step 5. or Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law or Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship didn't violate local law. If the person didn't live with you for the required time, see Exception to time lived with you, later. AND Who wasn't a qualifying child (see Step 1) of any taxpayer for 2023. For this purpose, a person isn't a taxpayer if the person isn't required to file a U.S. income tax return and either doesn't file such a return or files only to get a refund of withheld income tax or estimated tax paid. See Pub. 501 for details and examples. AND Who had gross income of less than $4,700 in 2023. If the person was permanently and totally disabled, see Exception to gross income test, later. AND For whom you provided over half of the person’s support in 2023. But see Children of divorced or separated parents, Multiple support agreements, and Kidnapped child, later. 1. Does any person meet the conditions to be your qualifying relative? Yes. Continue No. STOP 䊲 2. Was your qualifying relative a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico? (See Pub. 519 for the definition of a U.S. national or U.S. resident alien. If your qualifying relative was adopted, see Exception to citizen test, later.) Yes. Continue No. STOP 䊲 You can't claim this person as a dependent. Need more information or forms? Visit IRS.gov. 5. Could you be claimed as a dependent on someone else's 2023 tax return? (If the person who could claim you on their 2023 tax return is not required to file, and isn't filing a 2023 tax return or is filing a 2023 return only to claim a refund of withheld income tax or estimated tax paid, check “No.”) See Steps 1, 2, and 4. No. You can claim this Yes. STOP person as a dependent. You can't claim any Complete columns (1) dependents. Complete through (3) of the the rest of Form 1040 or Dependents section on 1040-SR and any page 1 of Form 1040 or applicable schedules. 1040-SR. Then, go to Step 5. Step 5 Does Your Qualifying Relative Qualify You for the Credit for Other Dependents? 1. Did your qualifying relative have an SSN, ITIN, or ATIN issued on or before the due date of your 2023 return (including extensions)? (Answer “Yes” if you are applying for an ITIN or ATIN for the qualifying relative on or before the return due date (including extensions).) Yes. Continue No. STOP 䊲 You can’t claim the credit for other dependents for this qualifying relative. 2. Was your qualifying relative a U.S. citizen, U.S. national, or U.S. resident alien? (See Pub. 519 for the definition of a U.S. national or a U.S. resident alien. If your qualifying relative was adopted, see Exception to citizenship test, later.) Yes. You can claim the No. STOP credit for other You can’t claim the dependents for this credit for other dependent. Check the dependents for this “Credit for other qualifying relative. dependents” box in column (4) of the Dependents section on page 1 of Form 1040 or 1040-SR for this person. 19 Definitions and Special Rules Adopted child. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption. Adoption taxpayer identification numbers (ATINs). If you have a dependent who was placed with you for legal adoption and you don’t know the dependent’s SSN, you must get an ATIN for the dependent from the IRS. See Form W-7A for details. If the dependent isn't a U.S. citizen or resident alien, apply for an ITIN instead using Form W-7. Children of divorced or separated parents. A child will be treated as the qualifying child or qualifying relative of the child’s noncustodial parent (defined later) if all of the following conditions apply. 1. The parents are divorced, legally separated, separated under a written separation agreement, or lived apart at all times during the last 6 months of 2023 (whether or not they are or were married). 2. The child received over half of the child’s support for 2023 from the parents (and the rules on Multiple support agreements, later, don’t apply). Support of a child received from a parent's spouse is treated as provided by the parent. 3. The child is in custody of one or both of the parents for more than half of 2023. 4. Either of the following applies. a. The custodial parent signs Form 8332 or a substantially similar statement that they won't claim the child as a dependent for 2023, and the noncustodial parent includes a copy of the form or statement with their return. If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to include certain pages from the decree or agreement instead of Form 8332. See Post-1984 and pre-2009 decree or agreement and Post-2008 decree or agreement. b. A pre-1985 decree of divorce or separate maintenance or written separation agreement between the parents provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2023. If conditions (1) through (4) apply, only the noncustodial parent can claim the child for purposes of the child tax credits and credit for other dependents (lines 19 and 28). However, this doesn't allow the noncustodial parent to claim head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. The custodial parent or another taxpayer, if eligible, can claim the child for the earned income credit and these other benefits. See Pub. 501 for details. Custodial and noncustodial parents. The custodial parent is the parent with whom the child lived for the greater number of nights in 2023. The noncustodial parent is the other parent. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross 20 income. See Pub. 501 for an exception for a parent who works at night, rules for a child who is emancipated under state law, and other details. Post-1984 and pre-2009 decree or agreement. The decree or agreement must state all three of the following. 1. The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support. 2. The other parent won't claim the child as a dependent. 3. The years for which the claim is released. The noncustodial parent must include all of the following pages from the decree or agreement. • Cover page (include the other parent's SSN on that page). • The pages that include all the information identified in (1) through (3) above. • Signature page with the other parent's signature and date of agreement. ! You must include the required information even if you filed it with your return in an earlier year. CAUTION Post-2008 decree or agreement. If the divorce decree or separation agreement went into effect after 2008, the noncustodial parent can't include pages from the decree or agreement instead of Form 8332. The custodial parent must sign either Form 8332 or a substantially similar statement the only purpose of which is to release the custodial parent's claim to certain tax benefits for a child, and the noncustodial parent must include a copy with their return. The form or statement must release the custodial parent's claim to the child without any conditions. For example, the release must not depend on the noncustodial parent paying support. Release of certain tax benefits revoked. A custodial parent who has revoked their previous release of a claim to certain tax benefits for a child must include a copy of the revocation with their return. For details, see Form 8332. Exception to citizen test. If you are a U.S. citizen or U.S. national and your adopted child lived with you all year as a member of your household, that child meets the requirement to be a U.S. citizen in Step 2, question 1; Step 3, question 2; Step 4, question 2; and Step 5, question 2. Exception to gross income test. If your relative (including a person who lived with you all year as a member of your household) is permanently and totally disabled (defined later), certain income for services performed at a sheltered workshop may be excluded for this test. For details, see Pub. 501. Exception to time lived with you. Temporary absences by you or the other person for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the person lived with you. Also see Children of divorced or separated parents, earlier, or Kidnapped child, later. If the person meets all other requirements to be your qualifying child but was born or died in 2023, the person is considered to have lived with you for more than half of 2023 if your home was this person's home for more than half the time the person Need more information or forms? Visit IRS.gov. was alive in 2023. If the person meets all other requirements to be your qualifying child but you adopted the person in 2023, the person was lawfully placed with you for legal adoption by you in 2023, or the person was an eligible foster child placed with you during 2023, the person is considered to have lived with you for more than half of 2023 if your main home was this person's main home for more than half the time since the person was adopted or placed with you in 2023. Any other person is considered to have lived with you for all of 2023 if the person was born or died in 2023 and your home was this person's home for the entire time the person was alive in 2023 or if you adopted the person in 2023, the person was lawfully placed with you for legal adoption by you in 2023, or the person was an eligible foster child placed with you during 2023 and your main home was the person's main home for the entire time since the person was adopted or placed with you in 2023. Foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Kidnapped child. If your child is presumed by law enforcement authorities to have been kidnapped by someone who isn't a family member, you may be able to take the child into account in determining your eligibility for head of household or qualifying surviving spouse filing status, the child tax credit, the credit for other dependents, and the earned income credit (EIC). For details, see Pub. 501 (Pub. 596 for the EIC). Married person. If the person is married and files a joint return, you can't claim that person as your dependent. However, if the person is married but doesn't file a joint return or files a joint return only to claim a refund of withheld income tax or estimated tax paid, you may be able to claim that person as a dependent. (See Pub. 501 for details and examples.) In that case, go to Step 2, question 3 (for a qualifying child), or Step 4, question 4 (for a qualifying relative). Multiple support agreements. If no one person contributed over half of the support of your relative (or a person who lived with you all year as a member of your household) but you and another person(s) provided more than half of your relative's support, special rules may apply that would treat you as having provided over half of the support. For details, see Pub. 501. Permanently and totally disabled. A person is permanently and totally disabled if, at any time in 2023, the person can't engage in any substantial gainful activity because of a physical or mental condition and a doctor has determined that this condition has lasted or can be expected to last continuously for at least a year or can be expected to lead to death. Public assistance payments. If you received payments under the Temporary Assistance for Needy Families (TANF) program or other public assistance program and you used the money to support another person, see Pub. 501. Qualifying child of more than one person. Even if a child meets the conditions to be the qualifying child of more than one person, only one person can claim the child as a qualifying child for all of the following tax benefits, unless the special rule for Need more information or forms? Visit IRS.gov. Children of divorced or separated parents, described earlier, applies. 1. Child tax credit and credit for other dependents (line 19) and additional child tax credit (line 28). 2. Head of household filing status. 3. Credit for child and dependent care expenses (Schedule 3, line 2). 4. Exclusion for dependent care benefits (Form 2441, Part III). 5. Earned income credit (line 27). No other person can take any of the five tax benefits just listed based on the qualifying child. If you and any other person can claim the child as a qualifying child, the following rules apply. For purposes of these rules, the term "parent" means a biological or adoptive parent of an individual. It doesn't include a stepparent or foster parent unless that person has adopted the individual. • If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. • If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. • If the parents don’t file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time in 2023. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for 2023. • If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for 2023. • If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for 2023, but only if that person's AGI is higher than the highest AGI of any parent of the child who can claim the child. Example. Your child, J, meets the conditions to be a qualifying child for both you and your parent. J doesn't meet the conditions to be a qualifying child of any other person, including J’s other parent. Under the rules just described, you can claim J as a qualifying child for all of the five tax benefits just listed for which you otherwise qualify. Your parent can't claim any of those five tax benefits based on J. However, if your parent’s AGI is higher than yours and you do not claim J as a qualifying child, J is the qualifying child of your parent. For more details and examples, see Pub. 501. If you will be claiming the child as a qualifying child, go to Step 2. Otherwise, stop; you can't claim any benefits based on this child. Social security number. You must enter each dependent's social security number (SSN). Be sure the name and SSN entered agree with the dependent's social security card. Otherwise, at the time we process your return, we may reduce or disallow any tax benefits (such as the child tax credit) based on that 21 dependent. If the name or SSN on the dependent's social security card isn't correct or you need to get an SSN for your dependent, contact the Social Security Administration (SSA). See Social Security Number (SSN), earlier. If your dependent won't have a number by the date your return is due, see What if You Can't File on Time? earlier. For the child tax credit, your child must have the required SSN. The required SSN is one that is valid for employment and that is issued by the SSA before the due date of your 2023 return (including extensions). If your child was a U.S. citizen when the child received the SSN, the SSN is valid for employment. If “Not Valid for Employment” is printed on your child’s social security card and your child’s immigration status has changed so that your child is now a U.S. citizen or permanent resident, ask the SSA for a new social security card without the legend. However, if “Valid for Work Only With DHS Authorization” is printed on your child’s social security card, your child has the required SSN only as long as the DHS authorization is valid. If your dependent child was born and died in 2023 and you do not have an SSN for the child, enter “Died” in column (2) of 22 the Dependents section and include a copy of the child's birth certificate, death certificate, or hospital records. The document must show the child was born alive. If you, or your spouse if filing jointly, didn't have an SSN (or ITIN) issued on or before the due date of your 2023 return (including extensions), you can't claim the child tax credit or the credit for other dependents on your original or an amended 2023 return. If you apply for an ITIN on or before the due date of your 2023 return (including extensions) and the IRS issues you an ITIN as a result of the application, the IRS will consider your ITIN as issued on or before the due date of your return. Student. A student is a child who during any part of 5 calendar months of 2023 was enrolled as a full-time student at a school or took a full-time, on-farm training course given by a school or a state, county, or local government agency. A school includes a technical, trade, or mechanical school. It doesn't include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Need more information or forms? Visit IRS.gov. Income Generally, you must report all income except income that is exempt from tax by law. For details, see the following instructions and the Schedule 1 instructions, especially the instructions for lines 1 through 7 and Schedule 1, lines 1 through 8z. Also see Pub. 525. Forgiveness of Paycheck Protection Program (PPP) Loans You don’t need to include the amount of a forgiven PPP Loan in your income. Although you don’t need to report the income from the forgiveness of your PPP Loan on Form 1040 or 1040-SR, you do need to report certain information related to your PPP Loan as an attachment to your tax return. For more information, see Pub. 525. Foreign-Source Income You must report unearned income, such as interest, dividends, and pensions, from sources outside the United States unless exempt by law or a tax treaty. You must also report earned income, such as wages and tips, from sources outside the United States. If you worked abroad, you may be able to exclude part or all of your foreign earned income. For details, see Pub. 54 and Form 2555. Foreign retirement plans. If you were a beneficiary of a foreign retirement plan, you may have to report the undistributed income earned in your plan. However, if you were the beneficiary of a Canadian registered retirement plan, see Rev. Proc. 2014-55, 2014-44 I.R.B. 753, available at IRS.gov/irb/ 2014-44_IRB#RP-2014-55, to find out if you can elect to defer tax on the undistributed income. Report distributions from foreign pension plans on lines 5a and 5b. Foreign accounts and trusts. You must complete Part III of Schedule B if you: • Had a foreign account; or • Received a distribution from, or were a grantor of, or a transferor to, a foreign trust. You may also have to file Form 3520. Foreign financial assets. If you had foreign financial assets in 2023, you may have to file Form 8938. See Form 8938 and its instructions. Chapter 11 Bankruptcy Cases If you are a debtor in a chapter 11 bankruptcy case, income taxable to the bankruptcy estate and reported on the estate's income tax return includes: • Earnings from services you performed after the beginning of the case (both wages and self-employment income); and • Income from property described in section 541 of title 11 of the U.S. Code that you either owned when the case began or that you acquired after the case began and before the case was closed, dismissed, or converted to a case under a different chapter. Because this income is taxable to the estate, don’t include this income on your own individual income tax return. The only exception is for purposes of figuring your self-employment tax. For that purpose, you must take into account all your self-employment income for the year from services performed both before and after the beginning of the case. Also, you (or the trustee if one is appointed) must allocate between you and the bankruptcy estate the wages, salary, or other compensation and withheld income tax reported to you on Form W-2. A similar allocation is required for income and withheld income tax reported to you on Forms 1099. You must also include a statement that indicates you filed a chapter 11 case and that explains how income and withheld income tax reported to you on Forms W-2 and 1099 are allocated between you and the estate. For more details, including acceptable allocation methods, see Notice 2006-83, 2006-40 I.R.B. 596, available at IRS.gov/irb/ 2006-40_IRB#NOT-2006-83. Community Property States what is separate income. For details, see Form 8958 and Pub. 555. Nevada, Washington, and California domestic partners. A registered domestic partner in Nevada, Washington, or California must generally report half the combined community income of the individual and their domestic partner. See Form 8958 and Pub. 555. Rounding Off to Whole Dollars You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3. If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total. If you are entering amounts that include cents, make sure to include the decimal point. There is no cents column on the form. The lines on Forms 1040 and 1040-SR are the same. ReferenCAUTION ces to lines in the following instructions refer to the line on either form. ! Line 1a Total Amount From Form(s) W-2, Box 1 Enter the total amount from Form(s) W-2, box 1. If a joint return, also include your spouse's income from Form(s) W-2, box 1. If you earned wages while you were an inmate in a penal instiCAUTION tution, report these amounts on Schedule 1, line 8u. Do not report these wages on line 1a. See the instructions for Schedule 1, line 8u. ! Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you and your spouse lived in a community property state, you must usually follow state law to determine what is community income and Need more information or forms? Visit IRS.gov. 23 If you received a pension or annuity from a nonqualified deferCAUTION red compensation plan or a nongovernmental section 457(b) plan and it was reported in box 1 of Form W-2, do not include this amount on Form 1040, line 1a. This amount is reported on Schedule 1, line 8t. ! Line 1b Household Employee Wages Not Reported on Form(s) W-2 Enter the total of your wages received as a household employee that was not reported on Form(s) W-2. An employer isn’t required to provide a Form W-2 to you if they paid you wages of less than $2,600 in 2023. For information on employment taxes for household employees, see Tax Topic 756. Line 1c Tip Income Not Reported on Line 1a Enter the total of your tip income that was not reported on Form 1040, line 1a. This should include any tip income you didn’t report to your employer and any allocated tips shown in box 8 on your Form(s) W-2 unless you can prove that your unreported tips are less than the amount in box 8. Allocated tips aren't included as income in box 1. See Pub. 531 for more details. Also include the value of any noncash tips you received, such as tickets, passes, or other items of value. Although you don’t report these noncash tips to your employer, you must report them on line 1c. You may owe social security and Medicare or railroad reCAUTION tirement (RRTA) tax on unreported tips. See the instructions for Schedule 2, line 5. ! Line 1d Medicaid Waiver Payments Not Reported on Form(s) W-2, Box 1 Enter your taxable Medicaid waiver payments that were not reported on 24 Form(s) W-2. Also enter the total of your taxable and nontaxable Medicaid waiver payments that were not reported on Form(s) W-2, or not reported in box 1 of Form(s) W-2, if you choose to include nontaxable payments in earned income for purposes of claiming a credit or other tax benefit. If you and your spouse both received nontaxable Medicaid waiver payments during the year, you and your spouse can make different choices about including payments in earned income. See the instructions for Schedule 1, line 8s. Line 1e Taxable Dependent Care Benefits From Form 2441, Line 26 Enter the total of your taxable dependent care benefits from Form 2441, line 26. Dependent care benefits should be shown in box 10 of your Form(s) W-2. But first complete Form 2441 to see if you can exclude part or all of the benefits. Line 1f Employer-Provided Adoption Benefits From Form 8839, Line 29 Enter the total of your employer-provided adoption benefits from Form 8839, line 29. Employer-provided adoption benefits should be shown in box 12 of your Form(s) W-2 with code T. But see the Instructions for Form 8839 to find out if you can exclude part or all of the benefits. You may also be able to exclude amounts if you adopted a child with special needs and the adoption became final in 2023. Line 1g Wages From Form 8919, Line 6 Line 1h Other Earned Income If you received scholarship or TIP fellowship grants that were not reported to you on Form W-2, report these amounts on Schedule 1, line 8r. See the instructions for Schedule 1, line 8r. The following types of income must be included in the total on line 1h. • Strike or lockout benefits (other than bona fide gifts). • Excess elective deferrals. The amount deferred should be shown in box 12 of your Form W-2, and the “Retirement plan” box in box 13 should be checked. If the total amount you (or your spouse if filing jointly) deferred for 2023 under all plans was more than $22,500 (excluding catch-up contributions as explained later), include the excess on line 1h. This limit is (a) $15,500 if you have only SIMPLE plans, or (b) $25,500 for section 403(b) plans if you qualify for the 15-year rule in Pub. 571. Although designated Roth contributions are subject to this limit, don’t include the excess attributable to such contributions on line 1h. They are already included as income in box 1 of your Form W-2. A higher limit may apply to participants in section 457(b) deferred compensation plans for the 3 years before retirement age. Contact your plan administrator for more information. If you were age 50 or older at the end of 2023, your employer may have allowed an additional deferral (catch-up contributions) of up to $7,500 ($3,500 for section 401(k)(11) and SIMPLE plans). This additional deferral amount isn't subject to the overall limit on elective deferrals. You can't deduct the amount deferred. It isn't included as inCAUTION come in box 1 of your Form W-2. ! Enter the total of your wages from Form 8919, line 6. • Disability pensions shown on Form 1099-R if you haven’t reached the minimum retirement age set by your employer. But see Insurance Premiums for Retired Public Safety Officers in the instructions for lines 5a and 5b. Disability pensions received after you Need more information or forms? Visit IRS.gov. reach minimum retirement age and other payments shown on Form 1099-R (other than payments from an IRA*) are reported on lines 5a and 5b. Payments from an IRA are reported on lines 4a and 4b. • Corrective distributions from a retirement plan shown on Form 1099-R of excess elective deferrals and excess contributions (plus earnings). But don’t include distributions from an IRA* on line 1h. Instead, report distributions from an IRA on lines 4a and 4b. *This includes a Roth, SEP, or SIMPLE IRA. Line 1i Nontaxable Combat Pay Election If you elect to include your nontaxable combat pay in your earned income when figuring the EIC, enter the amount on line 1i. See the instructions for line 27. Were You a Statutory Employee? If you were a statutory employee, the “Statutory employee” box in box 13 of your Form W-2 should be checked. Statutory employees include full-time life insurance salespeople and certain agent or commission drivers, certain traveling salespeople, and certain homeworkers. Statutory employees report the amount shown in box 1 of Form W-2 on a Schedule C along with any related business expenses. Missing or Incorrect Form W-2? Your employer is required to provide or send Form W-2 to you no later than January 31, 2024. If you don’t receive it by early February, use Tax Topic 154 to find out what to do. Even if you don’t get a Form W-2, you must still report your earnings. If you lose your Form W-2 or it is incorrect, ask your employer for a new one. Line 2a Tax-Exempt Interest If you received any tax-exempt interest (including any tax-exempt original issue discount (OID)), such as from municipal bonds, each payer should send you a Form 1099-INT or a Form 1099-OID. In general, your tax-exempt stated interest should be shown in box 8 of Form 1099-INT or, for a tax-exempt OID bond, in box 2 of Form 1099-OID, and your tax-exempt OID should be shown in box 11 of Form 1099-OID. Enter the total on line 2a. However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line 2a (that is, the excess of the tax-exempt interest received during the year over the amortized bond premium for the year). Also, if you acquired a tax-exempt OID bond at an acquisition premium, only report the net amount of tax-exempt OID on line 2a (that is, the excess of tax-exempt OID for the year over the amortized acquisition premium for the year). See Pub. 550 for more information about OID, bond premium, and acquisition premium. Also include on line 2a any exempt-interest dividends from a mutual fund or other regulated investment company. This amount should be shown in box 12 of Form 1099-DIV. Don’t include interest earned on your IRA, health savings account, Archer or Medicare Advantage MSA, or Coverdell education savings account. Don’t include any amounts related to the forgiveness of PPP CAUTION Loans on this line. ! Line 2b Taxable Interest Each payer should send you a Form 1099-INT or Form 1099-OID. Enter your total taxable interest income on line 2b. But you must fill in and attach Schedule B if the total is over $1,500 or any of the other conditions listed at the beginning of the Schedule B instructions applies to you. For more details about reporting taxable interest, including market discount on bonds and adjustments for amortiza- Need more information or forms? Visit IRS.gov. ble bond premium or acquisition premium, see Pub. 550. Interest credited in 2023 on deposits that you couldn't withdraw because of the bankruptcy or insolvency of the financial institution may not have to be included in your 2023 income. For details, see Pub. 550. If you get a 2023 Form TIP 1099-INT for U.S. savings bond interest that includes amounts you reported before 2023, see Pub. 550. Line 3a Qualified Dividends Enter your total qualified dividends on line 3a. Qualified dividends are also included in the ordinary dividend total required to be shown on line 3b. Qualified dividends are eligible for a lower tax rate than other ordinary income. Generally, these dividends are shown in box 1b of Form(s) 1099-DIV. See Pub. 550 for the definition of qualified dividends if you received dividends not reported on Form 1099-DIV. Exception. Some dividends may be reported as qualified dividends in box 1b of Form 1099-DIV but aren't qualified dividends. These include: • Dividends you received as a nominee. See the Schedule B instructions. • Dividends you received on any share of stock that you held for less than 61 days during the 121-day period that began 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock isn't entitled to receive the next dividend payment. When counting the number of days you held the stock, include the day you disposed of the stock but not the day you acquired it. See the examples that follow. Also, when counting the number of days you held the stock, you can't count certain days during which your risk of loss was diminished. See Pub. 550 for more details. • Dividends attributable to periods totaling more than 366 days that you received on any share of preferred stock held for less than 91 days during the 181-day period that began 90 days before the ex-dividend date. When counting the number of days you held the 25 stock, you can't count certain days during which your risk of loss was diminished. See Pub. 550 for more details. Preferred dividends attributable to periods totaling less than 367 days are subject to the 61-day holding period rule just described. • Dividends on any share of stock to the extent that you are under an obligation (including a short sale) to make related payments with respect to positions in substantially similar or related property. • Payments in lieu of dividends, but only if you know or have reason to know that the payments aren't qualified dividends. • Dividends from a corporation that first became a surrogate foreign corporation after December 22, 2017, other than a foreign corporation that is treated as a domestic corporation under section 7874(b). Example 1. You bought 5,000 shares of XYZ Corp. common stock on July 8. XYZ Corp. paid a cash dividend of 10 cents per share. The ex-dividend date was July 16. Your Form 1099-DIV from XYZ Corp. shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). However, you sold the 5,000 shares on August 11. You held your shares of XYZ Corp. for only 34 days of the 121-day period (from July 9 through August 11). The 121-day period began on May 17 (60 days before the ex-dividend date) and ended on September 14. You have no qualified dividends from XYZ Corp. because you held the XYZ stock for less than 61 days. Example 2. The facts are the same as in Example 1 except that you bought the stock on July 15 (the day before the ex-dividend date), and you sold the stock on September 16. You held the stock for 63 days (from July 16 through September 16). The $500 of qualified dividends shown in box 1b of Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16 through September 14). Example 3. You bought 10,000 shares of ABC Mutual Fund common stock on July 8. ABC Mutual Fund paid a cash dividend of 10 cents a share. The ex-dividend date was July 16. The ABC Mutual Fund advises you that the part of 26 the dividend eligible to be treated as qualified dividends equals 2 cents a share. Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. However, you sold the 10,000 shares on August 11. You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. amount should be shown in box 1 of Form 1099-R. Unless otherwise noted in the line 4a and 4b instructions, an IRA includes a traditional IRA, Roth IRA, simplified employee pension (SEP) IRA, and a savings incentive match plan for employees (SIMPLE) IRA. Except as provided next, leave line 4a blank and enter the total distribution (from Form 1099-R, box 1) on line 4b. Use the Qualified Dividends For purposes of these Excep- TIP and Capital Gain Tax Work- TIP tions, Roth IRA includes Roth sheet or the Schedule D Tax Worksheet, whichever applies, to figure your tax. See the instructions for line 16 for details. Line 3b Ordinary Dividends Each payer should send you a Form 1099-DIV. Enter your total ordinary dividends on line 3b. This amount should be shown in box 1a of Form(s) 1099-DIV. You must fill in and attach Schedule B if the total is over $1,500 or you received, as a nominee, ordinary dividends that actually belong to someone else. Nondividend Distributions Some distributions are a return of your cost (or other basis). They won't be taxed until you recover your cost (or other basis). You must reduce your cost (or other basis) by these distributions. After you get back all of your cost (or other basis), you must report these distributions as capital gains on Form 8949. For details, see Pub. 550. Dividends on insurance poli- TIP cies are a partial return of the premiums you paid. Don’t report them as dividends. Include them in income on Schedule 1, line 8z, only if they exceed the total of all net premiums you paid for the contract. Lines 4a and 4b IRA Distributions You should receive a Form 1099-R showing the total amount of any distribution from your IRA before income tax or other deductions were withheld. This SEP IRA and Roth SIMPLE IRAs. Exception 1. Enter the total distribution on line 4a if you rolled over part or all of the distribution from one: • Roth IRA to another Roth IRA, or • IRA (other than a Roth IRA) to a qualified plan or another IRA (other than a Roth IRA). Also enter “Rollover” next to line 4b. If the total distribution was rolled over, enter -0- on line 4b. If the total distribution wasn't rolled over, enter the part not rolled over on line 4b unless Exception 2 applies to the part not rolled over. Generally, a rollover must be made within 60 days after the day you received the distribution. For more details on rollovers, see Pub. 590-A and Pub. 590-B. If you rolled over the distribution into a qualified plan or you made the rollover in 2024, include a statement explaining what you did. Exception 2. If any of the following apply, enter the total distribution on line 4a and see Form 8606 and its instructions to figure the amount to enter on line 4b. 1. You received a distribution from an IRA (other than a Roth IRA) and you made nondeductible contributions to any of your traditional IRAs or traditional SEP IRAs for 2023 or an earlier year. If you made nondeductible contributions to these IRAs for 2023, also see Pub. 590-A and Pub. 590-B. 2. You received a distribution from a Roth IRA. But if either (a) or (b) below applies, enter -0- on line 4b; you don’t have to see Form 8606 or its instructions. a. Distribution code T is shown in box 7 of Form 1099-R and you made a contribution (including a conversion) to a Roth IRA for 2016 or an earlier year. Need more information or forms? Visit IRS.gov. b. Distribution code Q is shown in box 7 of Form 1099-R. 3. You converted part or all of a traditional IRA, traditional SEP IRA, or traditional SIMPLE IRA to a Roth IRA in 2023. 4. You had a 2022 or 2023 IRA contribution returned to you, with the related earnings or less any loss, by the due date (including extensions) of your tax return for that year. 5. You made excess contributions to your IRA for an earlier year and had them returned to you in 2023. 6. You recharacterized part or all of a contribution to a Roth IRA as a contribution to another type of IRA, or vice versa. Exception 3. If all or part of the distribution is a qualified charitable distribution (QCD), enter the total distribution on line 4a. If the total amount distributed is a QCD, enter -0- on line 4b. If only part of the distribution is a QCD, enter the part that is not a QCD on line 4b unless Exception 2 applies to that part. Enter “QCD” next to line 4b. A QCD is a distribution made directly by the trustee of your IRA (other than an ongoing SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions (with certain exceptions). You must have been at least age 70 1/2 when the distribution was made. Generally, your total QCDs for the year can't be more than $100,000. This includes any amount (up to $50,000) of a one-time QCD to a split-interest entity. If you file a joint return, the same rules apply to your spouse. The amount of the QCD is limited to the amount that would otherwise be included in your income. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income. See Pub. 590-B for details. You can't claim a charitable contribution deduction for any CAUTION QCD not included in your income. ! Exception 4. If all or part of the distribution is a health savings account (HSA) funding distribution (HFD), enter the total distribution on line 4a. If the total amount distributed is an HFD and you elect to exclude it from income, enter -0on line 4b. If only part of the distribution is an HFD and you elect to exclude that part from income, enter the part that isn't an HFD on line 4b unless Exception 2 applies to that part. Enter “HFD” next to line 4b. An HFD is a distribution made directly by the trustee of your IRA (other than an ongoing SEP or SIMPLE IRA) to your HSA. If eligible, you can generally elect to exclude an HFD from your income once in your lifetime. You can't exclude more than the limit on HSA contributions or more than the amount that would otherwise be included in your income. If your IRA includes nondeductible contributions, the HFD is first considered to be paid out of otherwise taxable income. See Pub. 969 for details. The amount of an HFD reduces the amount you can contribute CAUTION to your HSA for the year. If you fail to maintain eligibility for an HSA for the 12 months following the month of the HFD, you may have to report the HFD as income and pay an additional tax. See Form 8889, Part III. ! More than one exception applies. If more than one exception applies, include a statement showing the amount of each exception, instead of making an entry next to line 4b. For example: “Line 4b – $1,000 Rollover and $500 HFD.” But you don’t need to attach a statement if only Exception 2 and one other exception apply. More than one distribution. If you (or your spouse if filing jointly) received more than one distribution, figure the taxable amount of each distribution and enter the total of the taxable amounts on line 4b. Enter the total amount of those distributions on line 4a. You must start receiving at least TIP a minimum amount from your traditional IRA by April 1 of the year following the year you reach age 72 (age 73 if you reach age 72 in 2023). If you don’t receive the minimum distribution amount, you may have to pay an additional tax on the amount that should have been distributed. For details, including how to figure the minimum required distribution, see Pub. 590-B. Need more information or forms? Visit IRS.gov. You may have to pay an additional tax if you received an CAUTION early distribution from your IRA and the total wasn't rolled over. See the instructions for Schedule 2, line 8, for details. ! More information. For more information about IRAs, see Pub. 590-A and Pub. 590-B. Lines 5a and 5b Pensions and Annuities You should receive a Form 1099-R showing the total amount of your pension and annuity payments before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. Pension and annuity payments include distributions from 401(k), 403(b), and governmental 457(b) plans. Rollovers and lump-sum distributions are explained later. Don’t include the following payments on lines 5a and 5b. Instead, report them on line 1h. • Disability pensions received before you reach the minimum retirement age set by your employer. • Corrective distributions (including any earnings) of excess elective deferrals or other excess contributions to retirement plans. The plan must advise you of the year(s) the distributions are includible in income. Attach Form(s) 1099-R to TIP Form 1040 or 1040-SR if any federal income tax was withheld. Fully Taxable Pensions and Annuities Your payments are fully taxable if (a) you didn't contribute to the cost (see Cost, later) of your pension or annuity, or (b) you got your entire cost back tax free before 2023. But see Insurance Premiums for Retired Public Safety Officers, later. If your pension or annuity is fully taxable, enter the total pension or annuity payments (from Form(s) 1099-R, box 1) on line 5b; don’t make an entry on line 5a. Fully taxable pensions and annuities also include military retirement pay shown on Form 1099-R. For details on 27 military disability pensions, see Pub. 525. If you received a Form RRB-1099-R, see Pub. 575 to find out how to report your benefits. Partially Taxable Pensions and Annuities Enter the total pension or annuity payments (from Form 1099-R, box 1) on line 5a. If your Form 1099-R doesn't show the taxable amount, you must use the General Rule explained in Pub. 939 to figure the taxable part to enter on line 5b. But if your annuity starting date (defined later) was after July 1, 1986, see Simplified Method, later, to find out if you must use that method to figure the taxable part. You can ask the IRS to figure the taxable part for you for a $1,000 fee. For details, see Pub. 939. If your Form 1099-R shows a taxable amount, you can report that amount on line 5b. But you may be able to report a lower taxable amount by using the General Rule or the Simplified Method or if the exclusion for retired public safety officers, discussed next, applies. Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew who is retired because of disability or because you reached normal retirement age), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for coverage by an accident or health plan or a long-term care insurance contract. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be from the plan maintained by the employer from which you retired as a public safety officer. The distribution can be made directly from the plan to the provider of the accident or health plan or long-term care insurance contract, or the distribution can be made to you to pay to the provider of the accident or health plan or long-term care insurance contract. You can exclude from income the smaller of the amount of the premiums paid or $3,000. You can make this election only for amounts that 28 would otherwise be included in your income. The amount excluded from your income can’t be used to claim a medical expense deduction. An eligible retirement plan is a governmental plan that is a qualified trust or a section 403(a), 403(b), or 457(b) plan. You can exclude from income only the smaller of the amount CAUTION of the premiums paid or $3,000. This is true if the distribution was made directly from the plan to the provider of the accident or health plan or long-term care insurance contract or if the distribution was made to you and you paid the provider of the accident or health plan or long-term care insurance contract. If you received a distribution from your eligible retirement plan, and you used part of that distribution to pay premiums for an accident or health plan or long-term care insurance contract, you can still exclude from income only the smaller of the amount of the premiums or $3,000. The rest of the distribution is taxable to you and must be reported on line 5b. ! If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The amount shown in box 2a of Form 1099-R doesn't reflect the exclusion. Report your total distributions on line 5a and the taxable amount on line 5b. Enter “PSO” next to line 5b. If you are retired on disability and reporting your disability pension on line 1h, include only the taxable amount on that line and enter “PSO” and the amount excluded on the dotted line next to line 1h. Payments when you are disabled. If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat those payments as disability payments. The payments must be reported as a pension or annuity. You must include in your income any amounts that you received that you would have received in retirement had you not become disabled as a result of a terrorist attack. Include in your income any payments you receive from a 401(k), pension, or other retirement plan to the extent that you would have received the amount at the same or later time regardless of whether you had become disabled. Example. You were a contractor who was disabled as a direct result of participating in efforts to clean up the World Trade Center and you are eligible for compensation by the September 11 Victim Compensation Fund. You began receiving a disability pension at age 55 when you could no longer work due to your disability. Under your pension plan you are entitled to an early retirement benefit of $2,500 a month at age 55. If you wait until age 62, the normal retirement age under the plan, you would be entitled to a normal retirement benefit of $3,000 a month. The pension plan provides that a participant who retires early on account of disability is entitled to receive the participant's normal retirement benefit, which in your case equals $3,000 a month. Until you turn age 62, you can exclude $500 of your monthly retirement benefit from income (the difference between the early retirement benefit and the normal retirement benefit, $3,000 - $2,500) received on account of disability. You must report the remaining $2,500 of monthly pension benefit as taxable. For each month after you turn age 62, you must report the full amount of the monthly pension benefit ($3,000 a month) as taxable. Simplified Method You must use the Simplified Method if either of the following applies. 1. Your annuity starting date was after July 1, 1986, and you used this method last year to figure the taxable part. 2. Your annuity starting date was after November 18, 1996, and both of the following apply. a. The payments are from a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity. b. On your annuity starting date, either you were under age 75 or the number of years of guaranteed payments was fewer than 5. See Pub. 575 for the definition of guaranteed payments. If you must use the Simplified Method, complete the Simplified Method Worksheet in these instructions to figure the taxable part of your pension or annuity. For more details on the Simplified Need more information or forms? Visit IRS.gov. Keep for Your Records Simplified Method Worksheet—Lines 5a and 5b Before you begin: If you are the beneficiary of a deceased employee or former employee who died before August 21, 1996, include any death benefit exclusion that you are entitled to (up to $5,000) in the amount entered on line 2 below. More than one pension or annuity. If you had more than one partially taxable pension or annuity, figure the taxable part of each separately. Enter the total of the taxable parts on Form 1040 or 1040-SR, line 5b. Enter the total pension or annuity payments received in 2023 on Form 1040 or 1040-SR, line 5a. 1. Enter the total pension or annuity payments from Form 1099-R, box 1. Also, enter this amount on Form 1040 or 1040-SR, line 5a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. . . . . . . 8. 9. Taxable amount. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, enter this amount on Form 1040 or 1040-SR, line 5b. If your Form 1099-R shows a larger amount, use the amount on this line instead of the amount from Form 1099-R. If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers before entering an amount on line 5b . . . . . . . . . . . . . . . . . . . . . . 9. 2. Enter your cost in the plan at the annuity starting date . . . . . . . . . . . . . Note. If you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year’s worksheet on line 4 below (even if the amount of your pension or annuity has changed). Otherwise, go to line 3. 2. 3. Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below . . . . . . . . . . . . . . . . . . . . . 3. 4. Divide line 2 by the number on line 3 . . . . . . . . . . . . . . . . . . 4. 5. Multiply line 4 by the number of months for which this year’s payments were made. If your annuity starting date was before 1987, skip lines 6 and 7 and enter this amount on line 8. Otherwise, go to line 6 . . . . . . . . . . . . . . . . . . . . . . . 5. 6. Enter the amount, if any, recovered tax free in years after 1986. If you completed this worksheet last year, enter the amount from line 10 of last year’s worksheet . . . . . . 6. 7. Subtract line 6 from line 2 . . . . . . . . . . . . . . . . . . . . . . 7. 8. Enter the smaller of line 5 or line 7 . . . . . . . . . . . . . . . . . . . . . 10. Was your annuity starting date before 1987? Yes. STOP No. Add lines 6 and 8. This is the amount you have recovered tax free through 2023. You will need this number if you need to fill out this worksheet next year . . . . . . . . . . . . . . . . . 10. 11. Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you won’t have to complete this worksheet next year. The payments you receive next year will generally be fully taxable . . . . . . . . 11. Do not complete the rest of this worksheet. Table 1 for Line 3 Above IF the age at annuity starting date was . . . 55 or under 56–60 61–65 66–70 71 or older AND your annuity starting date was— before November 19, 1996, after November 18, 1996, enter on line 3 . . . enter on line 3 . . . 300 360 260 310 240 260 170 210 120 160 Table 2 for Line 3 Above IF the combined ages at annuity starting date were . . . 110 or under 111–120 121–130 131–140 141 or older Need more information or forms? Visit IRS.gov. THEN enter on line 3 . . . 410 360 310 260 210 29 Method, see Pub. 575 (or Pub. 721 for U.S. Civil Service retirement benefits). If you received U.S. Civil Service retirement benefits and you CAUTION chose the alternative annuity option, see Pub. 721 to figure the taxable part of your annuity. Do not use the Simplified Method Worksheet in these instructions. ! Annuity Starting Date Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. Age (or Combined Ages) at Annuity Starting Date If you are the retiree, use your age on the annuity starting date. If you are the survivor of a retiree, use the retiree's age on their annuity starting date. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, use your combined ages on the annuity starting date. If you are the beneficiary of an employee who died, see Pub. 575. If there is more than one beneficiary, see Pub. 575 or Pub. 721 to figure each beneficiary's taxable amount. Cost Your cost is generally your net investment in the plan as of the annuity starting date. It doesn't include pre-tax contributions. Your net investment may be shown in box 9b of Form 1099-R. Rollovers Generally, a rollover is a tax-free distribution of cash or other assets from one retirement plan that is contributed to another plan within 60 days of receiving the distribution. However, a rollover to a Roth IRA or a designated Roth account is generally not a tax-free distribution. Use lines 5a and 5b to report a rollover, including a direct rollover, from one qualified employer's plan to another or to an IRA or SEP. Enter on line 5a the distribution from Form 1099-R, box 1. From this amount, subtract any contributions (usually shown in box 5) that were taxable to you when made. From that result, subtract 30 the amount of the rollover. Enter the remaining amount on line 5b. If the remaining amount is zero and you have no other distribution to report on line 5b, enter -0- on line 5b. Also enter "Rollover" next to line 5b. See Pub. 575 for more details on rollovers, including special rules that apply to rollovers from designated Roth accounts, partial rollovers of property, and distributions under qualified domestic relations orders. Lump-Sum Distributions If you received a lump-sum distribution from a profit-sharing or retirement plan, your Form 1099-R should have the "Total distribution" box in box 2b checked. You may owe an additional tax if you received an early distribution from a qualified retirement plan and the total amount wasn't rolled over. For details, see the instructions for Schedule 2, line 8. Enter the total distribution on line 5a and the taxable part on line 5b. For details, see Pub. 575. If you or the plan participant TIP was born before January 2, 1936, you could pay less tax on the distribution. See Form 4972. Lines 6a, 6b, and 6c Lines 6a and 6b Soci [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Af2688d1fadd5c544. Public record. Not legal advice.