Tax Worksheet Instruction – Fill Out and Use This PDF

Dec 03, 2021

Cat. No. 24811V

Department

Contents

Page

Contents

Page

What's New

6

Sign Your Return

63

of the

. . . .

. . .

Treasury

DRAFT AS OF

. . . 64

Internal

. . . . . . . . . . . . . .Filing Requirements

. . . . 9

Do You Have To File?

. . . . 9

2021 Tax Table

. . . 65

Revenue

When and Where Should You File? . . . . . 9

Service

General Information

78

Line Instructions for Forms 1040 and

. . . 13

Refund Information

. . . 83

1040-SR

December

3, 2021

Filing Status

. . . 13

Instructions for Schedule 1

. . . 84

Name and Address

. . . 15

Instructions for Schedule 2

96

Social Security Number (SSN)

15

. . 101

Dependents, Qualifying Child for

.Instructions for Schedule 3

Child Tax Credit, and Credit for

. . . 18

Tax Topics

105

Other Dependents

. .

Income

. . .

23

Disclosure, Privacy Act, and Paperwork

Total Income and Adjusted Gross

30

Reduction Act Notice

. . 107

. . . . . . . . . . . . . . . . . .Income

Major Categories of Federal Income and

Tax and Credits

. . . 30

109

Outlays for Fiscal Year 2020

Payments

37

Refund

. . . 58

Index

. . 111

Amount You Owe

. . . 61

Due date of return. File Form 1040 or

The Families First Coronavirus Re-

$72,000 or less, or make an appointment

don’t live in theDRAFTDistrict of Columbia. If

ASfile yourOF2021 return after November 30,

1040-SR by April 18, 2022. The due

sponse Act (FFCRA) helped self-em-

to visit a Taxpayer Assistance Center.

date is April 18, instead of April 15, be-

ployed individuals affected by coronavi-

Direct deposit now available for re-

cause of the Emancipation Day holiday

rus by providing paid sick leave and

turns filed late. You can now receive a

in the District of Columbia – even if you

paid family leave credits equivalent to

direct deposit of your refund even if you

those that employers are required to pro-

2021

December 3,

you live in Maine or Massachusetts, you

vide their employees for qualified sick

2022.

have until April 19, 2022. That is be-

leave wages and qualified family leave

Expanded dependent care assistance.

cause of the Patriots' Day holiday in

wages. The COVID-related Tax Relief

ARP expanded the child and dependent

those states.

Act of 2020 extended the period during

care tax credit for 2021 by making it re-

Tuition and fees deduction not availa-

which individuals can claim these cred-

fundable for certain taxpayers and mak-

its. For more information, see the in-

ble. The tuition and fees

deduction is

ing it larger. For 2021, the dollar limit

structions for Form 7202 and Schedule

not available after 2020. Instead, the in-

on

qualifying

expenses

increases

to

3, line 13b.

come limitations for the lifetime learn-

$8,000 for one

qualifying person

and

Extension and expansion of credits for

ing credit have been increased. See

$16,000 for two or more qualifying per-

Form 8863 and its instructions.

sick and family leave. The American

sons. The rules for calculating the credit

Economic

impact payment—EIP 3.

Rescue Plan Act of 2021, enacted on

have also changed; the percentage of

Any economic impact payment you re-

March 11, 2021 (ARP) provides that

qualifying expenses eligible for the

ceived is not taxable for federal income

certain self-employed individuals can

credit has increased, along with the in-

tax purposes, but will reduce your re-

claim credits for up to 10 days of “paid

come limit at which the credit begins

covery rebate credit.

sick leave,” and up to 60 days of “paid

phasing out. Additionally, for taxpayers

2021 Recovery rebate credit. This

family leave,” if they are unable to work

who receive dependent care benefits

or telework due to circumstances related

from their employer, the dollar limit of

credit is figured like last year's economic

to coronavirus. Self-employed individu-

the exclusion amount increases for 2021.

impact payment, EIP 3, except eligibili-

als may claim these credits for the peri-

For more information, see the Instruc-

ty and the amount of the credit are based

od beginning on April 1, 2021, and end-

tions for Form 2441 and Pub. 503.

on your tax year 2021 information. See

ing September 30, 2021. For more

Child tax credit. Under ARP, the child

the instructions for line 30 and the Re-

information, see the instructions for

covery Rebate Credit Worksheet to fig-

Form 7202 and Schedule 3, line 13h.

tax credit has been enhanced for 2021.

ure your credit amount.

Form 9000, Alternative Media Prefer-

The child tax credit has been extended

Standard deduction amount in-

to qualifying children under age 18. De-

ence. Beginning in 2021, taxpayers

pending on modified adjusted gross in-

creased. For 2021, the standard deduc-

with print disabilities can use Form

come, you may receive an enhanced

tion amount has been increased for all

9000, Alternative Media Preference, to

credit amount of up to $3,600 for a qual-

filers. The amounts are:

elect to receive notices from the IRS in

ifying child under

age

6 and up

to

• Single or Married filing separate-

an alternative format including Braille,

$3,000 for a qualifying child over age 5

ly—$12,550.

large print, audio, and electronic. You

and under age 18. The enhanced credit

• Married filing jointly or Qualify-

can attach Form 9000 to your Form

amount begins to phase out where modi-

ing widow(er)—$25,100.

1040 or 1040-SR or you can mail it sep-

fied

adjusted

gross

income exceeds

• Head of household—$18,800.

arately. For more information, see Form

$150,000 in the case of a joint return or

Virtual currency. If, in 2021, you en-

9000.

surviving spouse, $112,500 in the case

gaged in a transaction involving virtual

All taxpayers now eligible for Identity

of a head of household, and $75,000 in

currency, you will need to answer “Yes”

Protection PIN. Beginning in 2021, the

all other cases.

to the question on page 1 of Form 1040

IRS Identity Protection PIN (IP PIN)

If you (or your spouse if filing joint-

or 1040-SR. See Virtual Currency, later,

Opt-In Program has been expanded to

ly) lived in the United States for more

for information on transactions involv-

all taxpayers who can properly verify

than half the year, the child tax credit

ing virtual currency. Do not leave this

their identity. An IP PIN helps prevent

will be fully refundable even if you don't

field blank. The question must be an-

your social security number from being

have earned income. If you don't meet

swered by all taxpayers, not just taxpay-

used to file a fraudulent federal income

this residency requirement, your child

ers who engaged in a transaction involv-

tax return. You can use the Get An IP

tax credit will be a combination of a

ing virtual currency.

PIN tool on IRS.gov to request an IP

nonrefundable child tax credit and a re-

Credits for sick and family leave for

PIN, file Form 15227 if your income is

fundable additional child tax credit, as

certain

self-employed

individuals.

was the case in 2020. The credit for oth-

er dependents has not been enhanced

EIC with a qualifying child, you should

of claiming the EIC, complete and at-

and is figured as it was in 2020.

follow the rules that apply to filers with

tach Schedule EIC to your Form 1040 or

Changes to Schedule 8812. Because of

a qualifying child or children when de-

1040-SR even if that child doesn't have

the changes made by ARP, detailed dis-

termining whether you are eligible to

a valid SSN. For more information, in-

cussion of the child tax credit, and how

claim the EIC even if your qualifying

cluding how to complete Schedule EIC

to figure your child tax credit and credit

child hasn't been issued a valid SSN on

if your qualifying child doesn't have a

for other dependents, which were previ-

or before the due date of your return (in-

valid SSN, see the line 27a instructions

ously part of these instructions, has been

cluding extensions). However, when de-

and Schedule EIC.

moved to the Instructions for Schedule

termining the amount of EIC that you

Forgiveness

of Paycheck

Protection

8812 (Form 1040). If you are claiming

are eligible to claim on your return, you

Program (PPP) Loans. The forgive-

the nonrefundable child tax credit, re-

should follow the rules that apply to tax-

ness of a PPP Loan creates tax-exempt

payers who do not have a qualifying

fundable childDRAFTtax credit, additional

ASincome,OFso you don't need to report the

pandedDecemberthe

3, 2021

child tax credit, or credit for other de-

child.

income on Form 1040 or 1040-SR, but

pendents, complete Schedule 8812 and

• Phaseout

amounts increased.

you do need to report certain informa-

attach it to your Form 1040 or 1040-SR.

The amount of the credit has been in-

tion related to your PPP Loan. To find

Premium tax credit (PTC). ARP ex-

creased and the phaseout income limits

out how to report information related to

PTC by eliminating the limi-

at which you can claim the credit have

your PPP Loan, see Forgiveness of Pay-

been expanded.

check Protection Program (PPP) Loans,

tation that a taxpayer's household in-

come may not exceed 400% of the

• Rules for separated spouses. If

under Income, later.

Federal Poverty Line and generally in-

you are married but don't file a joint re-

Identity

verification. The

IRS

turn, you may qualify to claim the EIC if

creases the credit amounts. In addition,

launched an improved identity verifica-

you live with a qualifying child for more

in 2021, if you receive unemployment

tion

and sign-in process that enables

than half the year and either live apart

compensation, you are generally eligible

more people to securely access and use

from your spouse for the last 6 months

to claim the PTC if you meet the other

IRS

online tools and

applications. To

of 2021 or are legally separated accord-

requirements. For more information, see

provide verification services, the IRS is

ing to your state law under a written sep-

Pub. 974 and Form 8962 and its instruc-

using ID.me, a trusted technology pro-

aration agreement or a decree of sepa-

tions.

vider. The new process is one more step

rate maintenance and do not live in the

Changes to the earned income credit

the IRS is taking to ensure that taxpayer

same household as your spouse at the

(EIC). For 2021, the following changes

end 2021.

information is provided only to the per-

have been made to the EIC.

• Investment

income

limit in-

son who legally has a right to the data.

• EIC rules for taxpayers without

creased. The amount of investment in-

Taxpayers using the new mobile-friend-

a qualifying child. Special rules apply

come you can receive and still be eligi-

ly verification procedure can gain entry

if you are claiming the EIC without a

ble to claim the EIC has increased to

to existing IRS online services such as

qualifying child. In these cases, the min-

$10,000.

the Child Tax Credit Update Portal, On-

imum age has been lowered to age 19

• Prior year (2019) earned income.

line Account, Get Transcript Online, Get

an Identity Protection PIN (IP PIN), and

except for specified students who must

You can elect to use your 2019 earned

be at least age 24 at the end of the year.

income to figure your 2021 earned in-

Online Payment Agreement. Additional

However, the applicable minimum age

come credit if your 2019 earned income

IRS applications will transition to the

is lowered further for former foster

is more than your 2021 earned income.

new method over the next year. Each

youth and qualified homeless youth to

See the instructions for line 27a.

online service will also provide informa-

age 18. Additionally, you no longer need

File Schedule EIC (Form 1040) if you

tion that will instruct taxpayers on the

to be under age 65 to claim the EIC

steps they need to follow for access to

without a qualifying child.

have a qualifying child. If you have at

the

service.

You

can

also

see

• EIC rules for taxpayers with a

least one child who meets the conditions

IR-2021-228 for more information.

to be your qualifying child for purposes

qualifying child. If you are claiming the

File?

DRAFTage 19 or full-

AS OF

2021 return, you do not have to attach

lumbia – even if you don’t live in the

Do You Have To

Form 8962.

District of Columbia. If you live in

Exception for certain children under

Maine or Massachusetts, you have until

time students. If certain

April 19, 2022, because of the Patriots'

RicoDecembercan use Tax Topic 901 to see if

3,If you2021

conditions apply, you can elect to in-

Day holiday in those states. If you file

Use Chart A, B, or C to see if you must

clude on your return the income of a

after this date, you may have to pay in-

file a return. U.S. citizens who lived in

child who was under age 19 at the end

terest and penalties. See Interest and

or had income from a U.S. possession

of 2021 or was a full-time student under

Penalties, later.

should see Pub. 570. Residents of Puerto

age 24 at the end of 2021. To do so, use

were serving in, or in support

Form 8814. If you make this election,

they must file.

of, the U.S. Armed Forces in a designa-

your child doesn't have to file a return.

Even

if you do

not

otherwise

For

details, use

Tax Topic 553

or see

ted combat zone or contingency opera-

tion, you may be able to file later. See

TIP

have

to

file

a

return,

you

Form 8814.

Pub. 3 for details.

should file one to get a refund

A child born on January 1, 1998, is

of any federal income tax withheld. You

considered to be age 24 at the end of

If you e-file your return, there is no

should also file if you are eligible for

2021. Do not use Form 8814 for such a

need to mail it. However, if you choose

any of the following credits.

child.

to mail it instead, filing instructions and

• Earned income credit.

Resident aliens. These rules also apply

addresses are at the end of these instruc-

tions.

•

Refundable child tax credit or ad-

if you were a resident alien. Also, you

ditional child tax credit.

may qualify for certain tax treaty bene-

The chart at the end of these in-

•

American opportunity credit.

fits. See Pub. 519 for details.

TIP structions provides the current

•

Credit for federal tax on fuels.

address for mailing your re-

•

Premium tax credit.

Nonresident aliens and dual-status ali-

turn. Use these addresses for Forms

•

Health coverage tax credit.

ens. These rules also apply if you were

1040 or 1040-SR filed in 2022. The ad-

•

Recovery rebate credit.

a nonresident alien or a dual-status alien

dress for returns filed after 2022 may be

•

Credits for sick and family leave.

and both of the following apply.

different. See IRS.gov/Form1040 for any

•

Child and dependent care credit.

•

You were married to a U.S. citizen

updates.

or resident alien at the end of 2021.

What if You Can't File on

See Pub. 501 for details. Also see

•

You elected to be taxed as a resi-

Pub. 501 if you do not have to file but

dent alien.

Time?

received a Form 1099-B (or substitute

See Pub. 519 for details.

statement).

Specific rules

apply to

deter-

You can get an automatic 6-month ex-

Requirement

to

reconcile

advance

!

tension if, no later than the date your re-

mine if you are a resident alien,

turn is due, you file Form 4868. For de-

payments of the premium tax credit.

CAUTION nonresident alien, or dual-sta-

tails, see Form 4868. Instead of filing

If you, your spouse with whom you are

tus alien. Most nonresident aliens and

Form 4868, you can apply for an auto-

filing a joint return, or a dependent was

dual-status aliens have

different

filing

matic extension by making an electronic

enrolled in coverage through the Mar-

requirements and may have to file Form

payment by the due date of your return.

ketplace for 2021 and advance payments

1040-NR. Pub. 519 discusses these re-

An automatic 6-month exten-

of the premium tax credit were made for

quirements and other information to

!

this coverage, you must file a 2021 re-

help aliens comply with U.S. tax law.

sion to file doesn't extend the

turn and attach Form 8962. You (or

CAUTION

time to pay your tax. If you

whoever enrolled you) should have re-

don’t pay your tax by the original due

ceived Form 1095-A from the Market-

When and Where

date of your return, you will owe interest

place with information about your cov-

on the unpaid tax and may owe penal-

You must attach Form 8962 even if

Should You File?

ties. See Form 4868.

erage and any advance payments.

someone else enrolled you, your spouse,

File Form 1040 or 1040-SR by April 18,

If you are a U.S. citizen or resident

or your dependent. If you are a depend-

2022. The due date is April 18, instead

alien, you may qualify for an automatic

ent who

is claimed on

someone

else's

of April 15, because of the Emancipa-

extension of time to file without filing

tion Day holiday in the District of Co-

Form 4868. You qualify if, on the due

-9-