1040 2020 Capital Gains And Dividends Worksheet Details

If you are looking for help preparing your taxes, the Tax Worksheet Instruction Form can be a valuable resource. This form provides clear and concise instructions on how to complete the tax worksheet, making the process simpler and easier to understand. With step-by-step guidance, you can be confident that you are completing your taxes correctly. So if you are looking for assistance in this area, be sure to consult the Tax Worksheet Instruction Form. It could make all the difference.

The listing contains details about the tax worksheet instruction. You might want to find out its length, the typical time to prepare the form, the fields you'll need to fill in, and so forth.

QuestionAnswer
Form NameTax Worksheet Instruction
Form Length1 pages
Fillable?No
Fillable fields0
Avg. time to fill out15 sec
Other namesqualified dividends and capital gain tax worksheet fillable 2020, qualified dividends and capital gain tax worksheet 2019, 2020 qualified dividends and capital gains worksheet, qualified dividend and capital gain worksheet 2019

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1040(and

TAX YEARDRAFT1040-ASSROF) R

2021

DecemberINSTRUCTIONS Including3,the instructions2021for Schedules 1 through 3

2021 Changes

American Rescue Plan (ARP) of 2021. The following ARP provisions affect tax year 2021.

Child and dependent care credit increased.

Self-only EIC expanded.

Child tax credit expanded. Advance payments of the child tax credit were made in 2021.

For details on these and other 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 03, 2021

Cat. No. 24811V

Table of Contents

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-2-

Form 1040 and 1040-SR Helpful Hints

For 2021, youDRAFTwill use Form 1040 or, if you were born before ASJanuary 2, 1957, you haveOFthe option to use Form 1040-SR.

You may only need to le 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 toDecemberwhich schedule(s) you will need to le based on your circumstances3,. See the instructions2021for the schedules for more information.

If you e-file your return, you generally won't notice much of a change and the software you use will generally determine which schedules you need.

IF YOU...

Have additional income, such as business or farm income or loss, unemployment compensation, prize or award money, or gambling winnings.

Have any deductions to claim, such as student loan interest, self-employment tax, or educator expenses.

THEN USE...

Schedule 1, Part I

Schedule 1, Part II

Owe alternative minimum tax (AMT) or need to make an excess advance premium tax credit repayment.

Owe other taxes, such as self-employment tax, household employment taxes, additional tax on IRAs or other qualied retirement plans and tax-favored accounts.

Can claim a nonrefundable credit (other than the nonrefundable child tax credit or the credit for other dependents), such as the foreign tax credit, education credits, or general business credit.

Can claim a refundable credit (other than the earned income credit, American opportunity credit, refundable child tax credit, additional child tax credit, or recovery rebate credit), such as the net premium tax credit, health coverage tax credit, or qualied sick and family leave credits from Schedule H or Schedule SE.

Have other payments, such as an amount paid with a request for an extension to le or excess social security tax withheld.

Schedule 2, Part I Schedule 2, Part II

Schedule 3, Part I

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 TASDRAFTdo for you?AS OF

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 everythingDecemberpossible to resolve your issue. TAS can help you if:3, 2021

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?

We have 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 - We Are Here to Help You, available at IRS.gov/Forms-Pubs. If you do not have internet access, you can call the IRS toll free at 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 ten basic rights that all taxpayers have when dealing with the IRS. The TAS Tax Toolkit at TaxpayerAdvocate.IRS.gov can help you understand what these rights mean to you and how they apply. These are your rights. Know them.

How else does the Taxpayer Advocate Service 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 800-829-3676.

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 mayDRAFThave advance payments of the premium tax creditASmade on their behalfOFdirectly 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. TheDecemberMarketplace is required to send Form 1095-A by January 31, 2022, 3,listing the advance2021payments 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 2021, 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 February 2022. This information may be relevant if you purchased health insurance coverage for 2021 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 2021, 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 nancial assistance to buy health insurance.

-5-

What's New

For information about any additional changes to the 2021 tax law or any other devel- opments affecting Form 1040 or 1040-SR or the instructions, go to IRS.gov/ Form1040.

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-

-6-

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

 

 

 

 

 

 

 

 

 

 

-7-

Free Software Options for Doing Your Taxes

Why have 49 million Americans used Free File?

Security—Free File uses the latest encryption technology to safeguard your information. DRAFTFlexible Payments—File early; pay byASApril 18, 2022 (for mostOFpeople).

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. DecemberIt’s Free—through IRS.gov/FreeFile. 3, 2021

Faster Refunds—Join the eight in 10 taxpayers who get their refunds faster by using direct deposit and e-le.

Do Your Taxes for Free

If your adjusted gross income was $73,000 or less in 2021, you can use free tax software to prepare and e-le 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-le available for free. Seventy percent of the nation’s taxpayers are eligible.

Just visit IRS.gov/FreeFile for details. Free File combines all the benets of e-le 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 nd 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-led 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 $58,000 in adjusted gross income) and elderly taxpayers (age 60 and older). At selected sites, taxpayers can input and electronically le their own tax return with the assistance of an IRS-certied volunteer.

See How To Get Tax Help near the end of these instructions for additional information or visit IRS.gov (Keyword: 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 conrmation from the IRS. Go to IRS.gov/Payments to see all your online payment options.

-8-

Filing Requirements

These rules apply to all U.S. citizens, regardless of where they live, and resident ali- ens.

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.

 

 

 

 

 

 

 

 

 

 

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-

 

 

 

 

 

 

 

 

 

date of your return, you meet one of the

4-month extension of time to file doesn't

 

press Worldwide, DHL Express Enve-

following conditions.

extend the time to pay your tax. See

 

lope, DHL Import Express 10:30, DHL

You live outside the United States

Form 4868.

 

 

 

Import Express 12:00, and DHL Import

and Puerto Rico and your main place of

Private Delivery Services

 

Express Worldwide.

business or post of duty is outside the

 

 

UPS Next Day Air Early A.M.,

United States and Puerto Rico.

If you choose to mail your return, you

 

UPS Next Day Air, UPS Next Day Air

You are in military or naval serv-

can use certain private delivery services

 

Saver, UPS 2nd Day Air, UPS 2nd Day

 

 

DRAFT AS OF

ice on duty outside the United States and

designated by the IRS to meet the “time-

 

Air A.M., UPS Worldwide Express

Puerto Rico.

 

ly mailing treated as timely filing/

 

Plus, and UPS Worldwide Express.

This extension gives you an extra 2

paying” rule for tax returns and pay-

 

 

To check for any updates to the list of

ments. These private delivery services

 

 

months to file and pay the tax, but inter-

include only the following.

 

 

 

designated private delivery services, go

endDecemberof the 2-FedEx International Economy.

3, 2021

est will be charged from the original due

 

• FedEx First Overnight, FedEx Pri-

 

to

IRS.gov/PDS

. For the IRS mailing ad-

date of the return on any unpaid tax.

ority Overnight, FedEx Standard Over-

 

dress to use if you’re using a private de-

You must include a statement showing

night, FedEx 2 Day, FedEx International

 

livery service, go to

IRS.gov/

that you meet the requirements. If you

Next Flight Out, FedEx International

 

PDSStreetAddresses

.

 

are still unable to file your return by the

Priority, FedEx International

First, and

 

 

The private delivery service can tell

 

 

month period, you can get

 

 

 

 

 

 

 

 

 

• DHL Express 9:00, DHL Express

 

you how to get written proof of the mail-

an additional 4 months if, no later than

 

 

 

 

ing date.

June 15, 2022, you file Form 4868. This

10:30, DHL Express 12:00,

DHL Ex-

 

Chart A—For Most People

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IF your filing status is . . .

 

AND at the end of 2021

 

 

THEN file a return if your gross

 

 

you were* . . .

 

 

income** was at least . . .

 

Single

 

 

under 65

 

 

$12,550

 

 

 

 

 

65 or older

 

 

14,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

under 65 (both spouses)

 

 

$25,100

 

 

 

Married filing jointly***

 

65 or older (one spouse)

 

 

26,450

 

 

 

 

 

 

65 or older (both spouses)

 

 

27,800

 

 

 

Married filing separately

 

any age

 

 

$5

 

 

 

Head of household

 

under 65

 

 

$18,800

 

 

 

 

65 or older

 

 

20,500

 

 

 

 

 

 

 

 

 

 

 

Qualifying widow(er)

 

under 65

 

 

$25,100

 

 

 

 

65 or older

 

 

26,450

 

 

 

 

 

 

 

 

 

 

 

*If you were born on January 1, 1957, you are considered to be age 65 at the end of 2021. (If your spouse died in 2021 or

 

if you are preparing a return for someone who died in 2021, see Pub. 501.)

 

 

 

 

 

 

 

 

**Gross income means all income you received in the form of money, goods, property, and services that isn't exempt from

 

tax, including any income from sources outside the United States or from the sale of your main home (even if you can

 

exclude part or all of it). Don’t include any social security benefits unless (a) you are married filing a separate return and

 

you lived with your spouse at any time in 2021, or (b) one-half of your social security benefits plus your other gross

 

income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the

 

instructions for 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 2021 (or on the date your spouse died) and your gross income was at

 

least $5, you must file a return regardless of your age.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-10-

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.

Single dependents. Were you either age 65 or older or blind?

Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income is the total of your unearnedDRAFTand earned income.AS OF

No. You must file a return if any of the following apply.

Your unearned income was over $1,100.

DecemberYour earned income was over $12,550.3, 2021 Your gross income was more than the larger of—

$1,100, or

• Your earned income (up to $12,200) plus $350. Yes. You must file a return if any of the following apply.

Your unearned income was over $2,800 ($4,500 if 65 or older and blind).

Your earned income was over $14,250 ($15,950 if 65 or older and blind).

Your gross income was more than the larger of—

$2,800 ($4,500 if 65 or older and blind), or

Your earned income (up to $12,200) plus $2,050 ($3,750 if 65 or older and blind).

Married dependents. Were you either age 65 or older or blind?

No. You must file a return if any of the following apply.

Your unearned income was over $1,100.

Your earned income was over $12,550.

Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.

Your gross income was more than the larger of—

$1,100, or

Your earned income (up to $12,200) plus $350.

Yes. You must file a return if any of the following apply.

Your unearned income was over $2,450 ($3,800 if 65 or older and blind).

Your earned income was over $13,900 ($15,250 if 65 or older and blind).

Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.

Your gross income was more than the larger of—

$2,450 ($3,800 if 65 or older and blind), or

Your earned income (up to $12,200) plus $1,700 ($3,050 if 65 or older and blind).

-11-

Chart C—Other Situations When You Must File

You must file a return if any of the seven conditions below apply for 2021.

1.You owe any special taxes, including any of the following.

a.Alternative minimum tax.

b.AdditionalDRAFTtax on a qualified plan, including an individual retirementASarrangement (IRA),OFor other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.

c.Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.

d.Social security and Medicare tax on tips you didn't report to your employer or on wages you received from an employer

Decemberwho didn't withhold these taxes.3, 2021 e. Write-in taxes, including 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. See the instructions for Schedule 2, line 8. f. Recapture taxes. See the instructions for line 16 and Schedule 2, lines 10 through 18.

2. You (or your spouse if filing jointly) received health savings account, Archer MSA, or Medicare Advantage MSA distributions.

3. You had net earnings from self-employment of at least $400.

4. You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.

5. Advance payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage through the Marketplace. You or whoever enrolled you should have received Form(s) 1095-A showing the amount of the advance payments.

6. Advance payments of the health coverage tax credit were made for you, your spouse, or a dependent. You or whoever enrolled you should have received Form(s) 1099-H showing the amount of the advance payments.

7. You are required to include amounts in income under section 965 or you have a net tax liability under section 965 that you are paying in installments under section 965(h) or deferred by making an election under section 965(i).

Need more information or forms? Visit IRS.gov.

-12-

CAUTION
Free File makes available free brand-name software and free e-file. Visit IRS.gov/

Line

!

Also see the instructions for Schedule 1 through Schedule 3 that follow the

Form 1040 and 1040-SR instructions.

Instructions

for

DRAFT AS

OF

 

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

Forms 1040

Fiscal year filers. If you are a fiscal year filer using a tax year other than January 1

and 1040-SR

you were born before January 2, 1957.

 

 

of your fiscal year in the top margin of page 1 of Form 1040 or 1040-SR.

 

 

through December 31, 2021, write “Tax Year” and the beginning and ending months

Decembertax

3, 2021

 

 

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 return indicating the line number and the word, code, and/or dollar amount you

need to enter.

For example, if you received wages as a household employee and didn't receive a W-2 because you were paid only $2,000, the instructions for line 1 state that you must enter “HSH” and the amount of the wages next to line 1. You may instead put an aster- isk next to line 1 and in the white space at the bottom of page 2 of Form 1040 or 1040-SR, enter “*Line 1: HSH $2,000.”

Section references are to the Internal Revenue Code.

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 widow(er).

For information about marital status, see Pub. 501.

More than one filing status can TIP apply to you. You can choose the one 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, 2021.

You were never married.

You were legally separated accord- ing to your state law under a decree of divorce or separate maintenance. But if, at the end of 2021, your divorce wasn't final (an interlocutory decree), you are considered married and can't check the box.

You were widowed before January 1, 2021, and didn't remarry before the end of 2021. But if you have a child, you may be able to use the qualifying widow(er) filing status. See the instruc- tions for Qualifying Widow(er), later.

Married Filing Jointly

You can check the “Married filing joint- ly” box at the top of Form 1040 or 1040-SR if any of the following apply.

You were married at the end of 2021, even if you didn't live with your spouse at the end of 2021.

Your spouse died in 2021 and you didn't remarry in 2021.

You were married at the end of

2021 and your spouse died in 2022 be- fore filing a 2021 return.

A married couple filing jointly report their combined income and deduct their combined allowable expenses on one re- turn. 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 re- sponsible for any additional taxes as- sessed by the IRS. You may want to file separately if:

You believe your spouse isn't re- porting all of his or her income, or

You don’t want to be responsible for any taxes due if your spouse doesn't have enough tax withheld or doesn't pay enough estimated tax.

See the instructions for Married Filing Separately. Also see Innocent Spouse Relief under General Information, later.

Nonresident aliens and dual-status ali- ens. Generally, a married couple can't file a joint return if either spouse is a nonresident alien at any time during the year. However, if you were a nonresi- dent alien or a dual-status alien and were married to a U.S. citizen or resident ali- en at the end of 2021, you can elect to be treated as a resident alien and file a joint return. See Pub. 519 for details.

-13-

Need more information or forms? Visit IRS.gov.

Married Filing Separately

 

You are married but lived apart

boxes. If you don’t enter the name, it

Check

the “Married

filing

separately”

from your spouse for the last 6 months

will take us longer to process your re-

of 2021 and you meet the other rules un-

turn.

box at the top of Form 1040 or 1040-SR

der Married persons who live apart, lat-

 

if you are married and file a separate re-

Qualifying child. To find out if some-

er.

 

 

 

turn. Enter your

spouse’s

name in

the

 

 

 

You are married to a nonresident

one is your qualifying child, see Step 1

entry

space

below

the

filing

status

under Who Qualifies as Your Depend-

 

 

 

 

 

 

 

 

 

 

alien at any time during the year and the

 

 

 

DRAFT AS OF

checkboxes. Be sure to enter your spou-

election to treat the alien spouse as a res-

ent, later.

se’s SSN or Individual Taxpayer Identi-

ident alien is not made.

 

Dependent. To find out if someone is

fication Number (ITIN) in the space for

Check the “Head of household” box on-

your dependent, see Who Qualifies as

spouse’s

SSN

on

Form

1040

or

ly if you are unmarried (or considered

Your Dependent, later.

1040-SR. If

your spouse

doesn’t

have

unmarried) and either Test 1 or Test 2

The dependents you claim are

and isn’t required to have an SSN or

 

 

 

 

December 3, 2021

ITIN, enter “NRA” in the entry space

applies.

 

 

TIP those you list by name and SSN

below the filing status checkboxes.

 

 

Test 1. You paid over half the cost of

in the Dependents section on

For electronic filing, enter the spou-

keeping up a home that was the main

Form 1040 or 1040-SR.

home

for all

of 2021 of your

parent

Exception to time lived with you.

se's name or “NRA” if the spouse

whom you can claim as a dependent, ex-

Temporary absences by you or the other

doesn’t have an SSN or ITIN in the en-

cept under a multiple support agreement

try space below the filing status check-

(see Who Qualifies as Your Dependent,

person for special circumstances, such

boxes.

 

 

 

 

 

 

 

 

 

later). Your parent didn't have to live

as school, vacation, business, medical

If you are married and file a separate

with you.

 

 

care, military service, or detention in a

Test 2. You paid over half the cost of

juvenile facility, count as time lived in

return,

you

generally

report

only

your

the home. Also see Kidnapped child, lat-

keeping up a home in which you lived

own income, deductions,

and credits.

er, under Who Qualifies as Your De-

and in which one of the following also

Generally, you are responsible only for

pendent, if applicable.

lived for more than half of the year (if

the tax on your own income. Different

If the person for whom you kept up a

half or less, see Exception to time lived

rules

apply

to

people in

community

with you, later).

 

home was born or died in 2021, you still

property states; see Pub. 555.

 

 

 

 

 

 

 

1. Any person whom you can claim

may be able to file as head of household.

 

 

 

 

 

 

 

 

 

 

However, you will usually pay more

If the person is your qualifying child, the

as a dependent. But don’t include:

 

tax than if you use another filing status

a.

Your child whom you claim as

child must have lived with you for more

for which you qualify. Also, if you file a

than half the part of the year he or she

your dependent because of the rule for

separate

return,

you can't

take the

stu-

was alive. If the person is anyone else,

Children of divorced or separated pa-

dent loan interest deduction or the edu-

see Pub. 501. Similarly, if you adopted

rents under Who Qualifies as Your De-

cation credits, and you will only be able

the person for whom you kept up a

pendent, later;

 

to take the earned income credit in very

 

home in 2021, the person was lawfully

b.

Any person who is your depend-

limited circumstances. You also can't

placed with you for legal adoption by

take the standard deduction if your

ent only because he or she lived with

you in 2021, or the person was an eligi-

spouse itemizes deductions.

 

 

 

you for all of 2021; or

 

ble foster child placed with you during

 

 

You may be able to file as head

c.

Any person you claimed as a de-

2021, the person is considered to have

 

 

pendent under a multiple support agree-

lived with you for more than half of

TIP of household if you had a child

ment. See Who Qualifies as Your De-

2021 if your main home was this per-

 

 

living with you and you

lived

 

 

pendent, later.

 

son’s main home for more than half the

apart from your spouse during the last 6

 

2.

Your unmarried qualifying child

time since he or she was adopted or

months

of 2021. See

Married persons

placed with you in 2021.

who isn't your dependent.

 

who live apart, later.

 

 

 

 

 

 

 

 

 

 

 

 

Keeping up a home. To find out what

 

 

 

 

 

3.

Your

married qualifying

child

 

 

 

 

 

 

 

 

 

 

Head of Household

 

 

 

 

is included in the cost of keeping up a

 

 

 

 

who isn't your dependent only because

 

 

 

 

home, see Pub. 501. Similarly, if you

 

 

 

 

 

 

 

 

 

 

 

You can check the “Head of household”

you can be claimed as a dependent on

adopted the person for whom you kept

someone else's 2021 return.

 

box at the top of Form 1040 or 1040-SR

 

up a home in 2021, the person was law-

4.

Your qualifying child who, even

if you are unmarried and provide a home

fully placed with you for legal adoption

for certain other persons. You are con-

though you are the custodial parent, isn't

by you in 2021, or the person was an eli-

sidered unmarried for this purpose if any

your dependent because of the rule for

gible foster child placed with you during

of the following applies.

 

 

 

 

Children of divorced or separated pa-

2021, the person is considered to have

• You were legally separated accord-

rents under Who Qualifies as Your De-

lived with you for more than half of

ing to your state law under a decree of

pendent, later.

 

2021 if your main home was this per-

divorce or separate maintenance at the

If the child isn't claimed as your de-

son's main home for more than half the

end of 2021. But if, at the end of 2021,

pendent, enter the child's name in the en-

time since he or she was adopted or

your divorce wasn't final (an interlocuto-

try space below the filing status check-

placed with you in 2021.

ry decree), you are considered married.

 

 

 

 

 

Need more information or forms? Visit IRS.gov.

 

-14-

 

 

Married persons who live apart. Even

entry

 

space

below

the

filing

status

 

 

 

 

 

Name and Address

rated at the end of 2021, you are consid-

it will take us longer to process your re-

if you weren’t divorced or legally sepa-

checkboxes. If you don’t enter the name,

 

 

 

 

ered unmarried if all of the following

turn.

 

 

 

 

 

 

 

 

 

 

Print or type the information in the

apply.

3. This child lived in your home for

spaces provided. If you are married fil-

You lived apart from your spouse

all of 2021. If the child didn't live with

ing a separate return, enter your spouse's

You file DRAFTa separate return from

 

AS OF

 

for the last 6 months of 2021. Tempora-

you for the required time, see Exception

name in the entry space below the filing

ry absences for special circumstances,

to time lived with you, later.

 

 

 

 

status checkboxes instead of below your

such as for business, medical care,

4.

 

You paid

over half

the

cost

of

name.

 

 

 

school, or military service, count as time

keeping up your home.

 

 

 

 

 

 

If you filed a

joint return for

lived in the home.

 

 

 

 

 

 

 

 

 

 

 

 

5.

 

You could have filed a joint re-

TIP 2020 and you are filing a joint

 

 

 

Decemberthe

 

3, 2021

your spouse.

turn with your spouse the year he or she

 

return for 2021 with the same

You paid over half the cost of

died, even if you didn't actually do so.

 

spouse, be sure to enter your names and

keeping up your home for 2021.

If your spouse died in 2021, you can't

SSNs in the same order as on your 2020

return.

 

 

Your home was the main home of

file as qualifying widow(er). Instead, see

 

 

your child, stepchild, or foster child for

 

instructions

for

 

Married

Filing

Name Change

 

 

more than half of 2021 (if half or less,

Jointly, earlier.

 

 

 

 

 

 

 

 

 

see Exception to time lived with you,

Adopted child. An adopted child is al-

If you changed your name because of

earlier).

marriage, divorce, etc., be sure to report

ways treated as your own child. An

You can claim this child as your

the change to the Social Security Ad-

adopted child includes a child lawfully

dependent or could claim the child ex-

placed with you for legal adoption.

 

ministration (SSA) before filing your re-

cept

that the child's other parent can

 

turn. This prevents delays in processing

Dependent. To find out if someone is

claim him or her under the rule for Chil-

your return and issuing refunds. It also

your

dependent,

see

Who

Qualifies

as

dren

of divorced or separated parents

safeguards your future

social security

Your Dependent, later.

 

 

 

 

 

under Who Qualifies as Your Depend-

 

 

 

 

 

benefits.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ent, later.

 

 

The dependents you claim are

Address Change

 

 

Adopted child. An adopted child is

TIP those you list by name and SSN

 

 

 

 

in the Dependents section

on

If you plan to move after filing your re-

always treated as your own child. An

 

 

Form 1040 or 1040-SR.

 

 

 

 

 

turn, use Form 8822 to notify the IRS of

adopted child includes a child lawfully

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

your new address.

 

 

placed with you for legal adoption.

Exception to time lived with you.

 

 

P.O. Box

 

 

Foster child. A foster child is any

Temporary absences by you or the child

 

 

child placed with you by an authorized

for

special

circumstances,

such

as

Enter your box number only if your post

school, vacation, business, medical care,

office doesn't deliver mail to your home.

placement agency or by judgment, de-

military service, or detention in a juve-

Foreign Address

 

 

cree, or other order of any court of com-

 

 

nile facility, count as time lived in the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

petent jurisdiction.

home. Also see Kidnapped child, later,

If you have a foreign address, enter the

Qualifying Widow(er)

under Who Qualifies as Your Depend-

city name on the appropriate line. Don’t

You

can check the “Qualifying wid-

ent, if applicable.

 

 

 

 

 

 

 

enter any other information on that line,

ow(er)” box at the top of Form 1040 or

A child is considered to have lived

but also complete the spaces below that

line. Don’t abbreviate the country name.

1040-SR and use joint return tax rates

with you for all of 2021 if the child was

Follow the country’s practice for enter-

for 2021 if all of the following apply.

born or died in 2021 and your home was

ing the postal code and the name of the

1.

Your spouse died in 2019 or 2020

the child's home for the entire time he or

province, county, or state.

 

and you didn't remarry before the end of

she was alive. Similarly, if you adopted

 

Death of a Taxpayer

 

2021.

the child in 2021, the child was lawfully

 

 

 

 

 

 

 

2.

You have a child or stepchild (not

placed

with

you

for

legal

adoption

by

See Death of a Taxpayer under General

you in 2021, or the child was an eligible

a foster child) whom you can claim as a

Information, later.

 

 

foster

child

placed

with

you

during

 

 

dependent or could claim as a dependent

 

 

 

 

2021,

the child

is considered

to have

 

 

 

 

except that, for 2021:

 

 

 

 

lived with you for all of 2021 if your

Social Security

 

$4,300 or more,

 

for the entire time since he or she was

 

a.

The child had gross income of

main home was this child's main home

Number (SSN)

 

b.

The child filed a joint return, or

adopted or placed with you in 2021.

 

 

c.

You could be claimed as a de-

Keeping up a home. To find out what

An incorrect or missing SSN can in-

pendent on someone else’s return.

is included in the cost of keeping up a

crease your tax, reduce your refund, or

If the child isn’t claimed as your de-

home, see Pub. 501.

 

 

 

 

 

 

delay your refund. To apply for an SSN,

 

 

 

 

 

 

 

 

 

 

 

fill in

Form SS-5 and

return it,

along

pendent, enter the child’s name in the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

with

the appropriate

evidence

docu-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-15-

 

 

 

Need more information or forms? Visit IRS.gov.

ments, to the Social Security Adminis-

 

 

 

ITINs assigned

before 2013

turn or you were a dual-status alien”

tration (SSA). You can get Form SS-5

TIP have expired and must be re-

box. If you were a dual-status alien and

online at SSA.gov/forms/ss-5.pdf, from

 

 

 

newed if you need to file a tax

you file a joint return with your spouse

your local

 

 

 

return in 2022. If you previously submit-

who was a U.S. citizen or resident alien

SSA office, or by calling the

SSA at 800-772-1213. It usually takes

ted a renewal application and it was ap-

at the end of 2021 and you and your

about 2 weeks to get an SSN once the

proved, you do not need to renew again

spouse agree to be taxed on your com-

SSA has all the evidence and informa-

unless you haven't used your ITIN on a

bined worldwide income, don’t check

tion it needs.

DRAFT AS OF

 

 

 

 

federal tax return at least once for tax

the box.

 

Check that both the name and SSN

years 2018, 2019, or 2020.

 

 

 

Age/Blindness

An ITIN is for tax use only. It doesn't

on your Forms 1040 or 1040-SR, W-2,

If you or your spouse (if you are married

and 1099 agree with your social security

entitle you to social security benefits or

and filing a joint return) were born be-

showsDecemberan

 

 

3, 2021

card. If they

don’t, certain

deductions

change

your employment

or immigra-

fore January 2, 1957, or were blind at

and credits on Form 1040 or 1040-SR

tion status under U.S. law.

 

 

 

the end of 2021, check the appropriate

may be reduced or disallowed and you

For more information on ITINs, in-

boxes on

the line labeled “Age/Blind-

may not receive credit for

your

social

cluding

application, expiration,

and re-

ness.”

 

security earnings. If your

Form

W-2

 

newal,

see Form W-7 and its

instruc-

Don’t

check any boxes for your

incorrect SSN or name, notify

tions.

 

 

 

 

 

 

 

your employer or the form-issuing agent

 

 

 

 

 

 

 

spouse if your filing status is head of

 

 

 

 

 

 

 

 

as soon as possible to make sure your

If you receive an SSN after previous-

household.

earnings are credited to your social se-

ly using an ITIN, stop using your ITIN.

Death of spouse in 2021. If your

curity record. If the name or SSN on

Use your SSN instead. Visit a local IRS

spouse was born before January 2, 1957,

your social security card is incorrect,

office or write a letter to the IRS ex-

but died in 2021 before reaching age 65,

call the SSA.

 

 

 

 

plaining that you now have an SSN and

don’t check the box that says “Spouse

Once you are issued an SSN, use it to

want all your tax records combined un-

was born before January 2, 1957.”

der your SSN. Details about what to in-

A person is considered to reach age

file your tax return. Use your SSN to file

clude with the letter and where to mail it

65 on the

day before his or her 65th

your tax return even if your SSN does

are at IRS.gov/ITIN.

 

 

 

 

 

 

birthday.

 

not authorize employment or if you have

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonresident Alien Spouse

 

been issued an SSN that authorizes em-

Example. Your spouse was born on

ployment and you lose your employ-

If your spouse is a nonresident alien, he

February 14, 1956, and died on February

ment authorization. An ITIN will not be

or she must have either an SSN or an

13, 2021. Your spouse is considered age

issued to you once you have been issued

ITIN if:

 

 

 

 

 

65 at the time of death. Check the appro-

an SSN. If you received your SSN after

You file a joint return, or

 

 

priate box for your spouse. However, if

previously using an ITIN, stop using

Your spouse is filing a separate re-

your spouse died on February 12, 2021,

your ITIN. Use your SSN instead.

 

turn.

 

 

 

 

 

 

 

your spouse isn't considered age 65.

IRS Individual Taxpayer

 

 

 

 

 

 

 

 

 

Don’t check the box.

 

 

 

 

 

 

 

 

 

Death of taxpayer in 2021. If you are

 

 

 

 

 

 

 

 

 

Identification Numbers

 

Standard Deduction

preparing a return for someone who died

(ITINs) for Aliens

 

 

 

in 2021, see Pub. 501 before completing

If you are a nonresident or resident alien

TIP

If you are filing Form 1040-SR,

the standard deduction information.

and you don’t have and aren’t eligible to

you can find a Standard De-

Blindness

get an SSN, you must apply for an ITIN.

 

 

 

duction Chart on the last page

It takes about 7 weeks to get an ITIN.

of that form that can calculate the

If you weren’t totally blind as of De-

 

 

 

 

 

 

 

amount of your standard deduction in

cember 31, 2021, you must get a state-

If you already have an ITIN, enter it

most situations.

 

 

 

ment certified by your eye doctor (oph-

wherever your SSN is requested on your

 

 

 

 

 

 

 

 

thalmologist or optometrist) that:

tax return.

 

 

 

 

Don’t file the Standard Deduction

• You can't see better than 20/200 in

Some ITINs must be renewed. If you

Chart with your return.

 

 

 

your better eye with glasses or contact

Single and Married Filing

lenses, or

 

haven't used your ITIN on a federal tax

• Your field of vision is 20 degrees

return at least once for tax years 2018,

Jointly

 

 

 

or less.

 

2019, or 2020, it expired at the end of

If you or your spouse (if you are married

If your

eye condition isn't likely to

2021 and must be renewed if you need

and filing a joint return) can be claimed

improve beyond the conditions listed

to file a federal tax return in 2022. You

as a dependent on someone else’s return,

above, you can get a statement certified

don't need to renew your ITIN if you

check the appropriate box in the Stand-

by your eye doctor (ophthalmologist or

don't need to

file a federal

tax return.

ard Deduction section.

 

 

 

optometrist) to this effect instead.

You can find more information at

 

 

 

If you were a dual-status alien, check

You must keep the statement for your

IRS.gov/ITIN.

 

 

 

 

 

 

 

 

 

 

 

the “Spouse itemizes on a separate re-

records.

 

Need more information or forms? Visit IRS.gov.

 

 

-16-

 

 

 

 

 

Beginning in 2021, if you receive a

check the box. If you are filing a joint

An exchange of virtual currency

notice or letter but you would prefer to

return, your spouse can also have $3 go

for property, goods, or services;

 

have it in Braille or large print, you can

to the fund. If you check a box, your tax

An exchange/trade of virtual cur-

use Form 9000, Alternative Media Pref-

or refund won't change.

rency for another virtual currency;

 

erence, to request notices in an alterna-

Virtual Currency

A sale of virtual currency; and

 

tive format including Braille, large print,

Any other disposition of a finan-

audio, or electronic. You can

attach

Virtual currency is a digital representa-

cial interest in virtual currency.

 

of formats

 

DRAFT AS OF

 

 

 

Form 9000 to your return or mail it sep-

tion of value, other than a representation

A

transaction

involving

virtual

cur-

arately.

 

 

 

of the U.S. dollar or a foreign currency

rency

does not

include the

holding of

You can download, or view online,

(“real currency”), that functions as a unit

virtual currency in a wallet or account,

of account, a store of value, or a medium

tax forms and publications in a variety

or the transfer of virtual currency from

 

 

including text-only,

Braille

of exchange. Some virtual currencies are

 

 

one wallet or account you own or con-

 

 

 

 

 

 

 

 

 

If yourDecemberfiling status is married filing sep- virtual currency that are used as a3,medi- cluding2021the use of real

ready

files,

browser-friendly

HTML

convertible, which means that they have

trol to another that you own or control.

(other than tax forms), accessible PDF,

an equivalent value in real currency or

If your only transactions involving virtu-

and large print.

 

act as a substitute for real currency. The

al currency during 2021 were purchases

Married Filing Separately

IRS uses the term “virtual currency” to

of virtual currency for real currency, in-

describe the various types of convertible

 

 

 

 

 

 

 

 

 

currency

elec-

arately and your spouse itemizes deduc-

um of exchange, such as digital currency

tronic platforms

such as

PayPal

and

Venmo, you are not required to check

tions

on his

or her return, check the

and cryptocurrency. Regardless of the

the “Yes” box next to the virtual curren-

“Spouse itemizes on a separate return or

label applied, if a particular asset has the

cy question. You must not leave the

you were a dual-status alien” box.

characteristics of virtual currency, it will

field blank even if you are not required

If your filing status is married filing

be treated as virtual currency for Federal

to answer “Yes”. If you disposed of any

income tax purposes.

separately and your spouse was born be-

virtual currency that was held as a capi-

 

fore January 2, 1957, or was blind at the

If, in 2021, you engaged in any trans-

tal asset through a sale, exchange, or

end of 2021, you can check the appro-

action involving virtual currency, check

transfer, check “Yes” and use Form

priate box(es) on the line labeled “Age/

the “Yes” box next to the question on

8949 to figure your capital gain or loss

Blindness” if your spouse had no in-

virtual currency on page 1 of Form 1040

and report it on Schedule D (Form

come, isn't filing a return, and can't be

or 1040-SR. A transaction involving vir-

1040).

 

 

 

 

 

claimed as a dependent on another per-

tual currency includes, but is not limited

If you received any virtual currency

son's return.

 

 

 

to:

 

 

 

as compensation for services or disposed

Presidential Election

 

payment for goods or services provided;

 

of any virtual currency that you held for

Campaign Fund

 

The receipt of virtual currency as

you must report the income as you

 

The receipt or transfer of virtual

 

 

 

 

 

 

sale to customers in a trade or business,

This

fund helps pay for Presidential

currency for free (without providing any

would report other income of the same

election campaigns. The fund

reduces

consideration) that does not qualify as a

type (for example, W-2 wages on Form

candidates' dependence on large contri-

bona fide gift;

1040 or 1040-SR, line 1, or inventory or

butions from individuals and groups and

The receipt of new virtual currency

services from Schedule C on Schedule

places candidates on an equal financial

as a result of mining and staking activi-

1).

 

 

 

 

 

 

footing in the general election. The fund

ties;

 

 

 

 

 

 

 

 

 

 

 

 

 

also helps pay for pediatric medical re-

The receipt of virtual currency as a

For more information, go to

IRS.gov/

search. If you want $3 to go to this fund,

result of a hard fork;

virtualcurrencyfaqs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-17-

Need more information or forms? Visit IRS.gov.

Who Qualifies as Your Dependent

Dependents, Qualifying Child for Child Tax Credit, and Credit for Other Dependents

Step 1 Do You Have a Qualifying Child?

A qualifying child is a child who is your...

Follow the steps below to find out if a person qualifies as your

Son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half

dependent and to find out if your dependent qualifies you to

brother, half sister, or a descendant of any of them (for example, your grandchild,

take the child tax credit or the credit for other dependents. If

niece, or nephew)

you have more than four dependents, check the box under De-

 

 

 

 

AND

 

pendents on page 1 of Form 1040 or 1040-SR and include a

 

 

AS OF

statement showingDRAFTthe information required in columns (1)

December 3, 2021or

through (4).

was ...

TIP

The dependents you claim are those you list by name

Under age 19 at the end of 2021 and younger than you

and SSN in the Dependents section on Form 1040 or

(or your spouse if filing jointly)

 

1040-SR.

 

 

Before you begin. See the definition of Social security num- ber, 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 2021 return (including extensions). If an ITIN is applied for on or before the due date of a 2021 return (including exten- sions) and the IRS issues an ITIN as result of the application, the IRS will consider the ITIN as issued on or before the due date of the return.

Under age 24 at the end of 2021, 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 his or her own support for 2021 (see Pub. 501)

AND

Who isn't filing a joint return for 2021

or is filing a joint return for 2021 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 2021. 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 2021, 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.

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

Need more information or forms? Visit IRS.gov.

-18-

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)
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 2021. For this purpose, a person isn't a taxpayer if he or she 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 $4,300 in 2021. If the person was permanently and totally disabled, see Exception to gross income test, later.
AND
For whom you provided over half of his or her support in 2021. But see Children of divorced or separated parents, Multiple support agreements, and Kidnapped child, later.
Need more information or forms? Visit IRS.gov.
through (3) of the Dependents section on page 1 of Form 1040 or 1040-SR for this child. Then, go to Step 3.

the definition of a U.S. national or U.S. resident alien. If the

 

 

 

 

 

 

 

 

 

 

child was adopted, see Exception to citizen test, later.)

 

4. Did this child have an SSN valid for employment issued

Yes. Continue

No. STOP

 

before the due date of your 2021 return (including

You can't claim this child

 

extensions)? (See Social Security Number, later.)

 

 

Yes. You can claim the

No. STOP

 

as a dependent.

 

 

 

 

child tax credit for this

You can claim the credit

 

 

 

person. Check the

 

DRAFT AS

OF

2. Was the child married?

 

 

“Child tax credit” box

for other dependents for

Yes. See Married

No. Continue

 

in column (4) of the

this child. Check the

 

Dependents section on

“Credit for other

person, later.

 

page 1 of Form 1040 or

dependents” box in

 

 

 

1040-SR for this

 

column (4) of the

 

 

 

 

 

 

person.

 

Dependents section on

3. Could you, or your spouse if filing jointly, be claimed as a

 

 

page 1 of Form 1040 or

 

 

 

 

December 3, 2021

dependent on someone else's 2021 tax return? See Steps 1,

 

 

 

 

1040-SR for this person.

2, and 4.

child as a dependent.

 

 

Is Your Qualifying Relative

Yes. STOP

No. You can claim this

 

Step 4

Your Dependent?

You can't claim any

Complete columns (1)

 

 

dependents. Complete the rest of Form 1040 or 1040-SR and any applicable schedules.

Step 3 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

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 U.S. resident alien. If the child was adopted, see Exception to citizen test, later.)

Yes. Continue

No. STOP

You can’t claim the child tax credit or the credit for other dependents for this child.

3. Was the child under age 18 at the end of 2021?

Yes. Continue

No. You can claim the

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.

 

-19-

1. Does any person meet the conditions to be your qualifying

relative was adopted, see Exception to citizenship test,

later.)

 

 

relative?

 

 

 

 

 

 

 

 

 

Yes. You can claim

No. STOP

Yes. Continue

No. STOP

 

 

the credit for other

You can’t claim the

 

 

 

 

 

dependents for this

 

 

 

 

 

 

dependent. Check the

credit for other

 

 

 

 

 

 

2. Was your qualifying relative a U.S. citizen, U.S. national,

 

“Credit for other

dependents for this

 

dependents” box in

qualifying relative.

 

DRAFT

AS OF

U.S. resident alien, or a resident of Canada or Mexico? (See

 

column (4) of the

 

 

Pub. 519 for the definition of a U.S. national or U.S.

 

Dependents section on

 

 

resident alien. If your qualifying relative was adopted, see

 

page 1 of Form 1040 or

 

 

Exception to citizen test, later.)

No.

 

 

 

1040-SR for this

 

 

Yes. Continue

STOP

 

person.

 

 

 

 

 

 

 

 

December

 

 

3, 2021

 

 

person as a dependent.

Definitions and Special Rules

 

 

You can't claim this

 

 

 

 

 

 

 

 

 

Adopted child. An adopted child is always treated as your own

3. Was your qualifying relative married?

 

 

child. An adopted child includes a child lawfully placed with

Yes. See Married

No. Continue

you for legal adoption.

 

 

person, later.

 

Adoption taxpayer identification numbers (ATINs). If you

 

 

 

 

 

 

 

 

 

 

have a dependent who was placed with you for legal adoption

4. Could you, or your spouse if filing jointly, be claimed as a

and you don’t know his or her SSN, you must get an ATIN for

dependent on someone else's 2021 tax return? See Steps 1,

the dependent from the IRS. See Form W-7A for details. If the

2, and 4.

No. You can claim this

dependent isn't a U.S. citizen or resident alien, apply for an

Yes. STOP

ITIN instead using Form W-7.

 

 

You can't claim any

person as a dependent.

 

 

 

 

Complete columns (1)

Children of divorced or separated parents. A child will be

dependents. Complete

through (3) of the

the rest of Form 1040 or

Dependents section on

treated as the qualifying child or qualifying relative of his or her

1040-SR and any

page 1 of Form 1040 or

noncustodial parent (defined later) if all of the following condi-

applicable schedules.

1040-SR. Then, go to

tions apply.

 

 

 

 

Step 5.

 

1. The parents are divorced, legally separated, separated un-

 

Does Your Qualifying Relative

der a written separation agreement, or lived apart at all times

Step 5

during the last 6 months of 2021 (whether or not they are or

 

Qualify You for the Credit for

were married).

 

 

 

Other Dependents?

2021 from the parents (and the rules on Multiple support agree-

 

 

 

 

 

2. The child received over half of his or her support for

1. Did your qualifying relative have an SSN, ITIN, or ATIN

ments, later, don’t apply). Support of a child received from a pa-

rent's spouse is treated as provided by the parent.

issued on or before the due date of your 2021 return

(including extensions)? (Answer “Yes” if you are applying

3.

The child is in custody of one or both of the parents for

for an ITIN or ATIN for the qualifying relative on or before

more than half of 2021.

 

 

the return due date (including extensions).)

 

 

4.

Either of the following applies.

Yes. Continue

No. STOP

a.

The custodial parent signs Form 8332 or a substantially

 

You can’t claim the

 

 

similar statement that he or she won't claim the child as a de-

 

 

credit for other

 

 

pendent for 2021, and the noncustodial parent includes a copy

 

 

dependents for this

 

 

of the form or statement with his or her return. If the divorce de-

 

 

qualifying relative.

 

 

 

 

 

cree or separation agreement went into effect after 1984 and be-

 

 

 

 

 

2. Was your qualifying relative a U.S. citizen, U.S. national, or

fore 2009, the noncustodial parent may be able to include cer-

tain pages from the decree or agreement instead of Form 8332.

U.S. resident alien? (See Pub. 519 for the definition of a

See

Post-1984 and pre-2009

decree or agreement and

U.S. national or a U.S. resident alien. If your qualifying

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 2021.

If conditions (1) through (4) apply, only the noncustodial pa- rent can claim the child for purposes of the child tax credits and credit for other dependents (lines 19 and 28). However, this

Need more information or forms? Visit IRS.gov.

-20-

doesn't allow the noncustodial parent to claim head of house-

income for services performed at a sheltered workshop may be

hold filing status, the credit for child and dependent care expen-

excluded for this test. For details, see Pub. 501.

ses, the exclusion for dependent care benefits, the earned in-

Exception to time lived with you. Temporary absences by you

come credit, or the health coverage tax credit. The custodial pa-

or the other person for special circumstances, such as school,

rent or another taxpayer, if eligible, can claim the child for the

vacation, business, medical care, military service, or detention

earned income credit and these other benefits. See Pub. 501 for

in a juvenile facility, count as time the person lived with you.

details.

Also see Children of divorced or separated parents, earlier, or

Custodial and noncustodial parents. The custodial parent is

Kidnapped child, later.

the parent with whom the child lived for the greater number of

If the person meets all other requirements to be your qualify-

nights in 2021. The noncustodial parent is the other parent. If

ing child but was born or died in 2021, the person is considered

 

with each parent for an equal number of nights,

to have lived with you for more than half of 2021 if your home

the child was DRAFT AS OF

the custodial parent is the parent with the higher adjusted gross

was this person's home for more than half the time he or she

income. See Pub. 501 for an exception for a parent who works

was alive in 2021. If the person meets all other requirements to

at night, rules for a child who is emancipated under state law,

be your qualifying child but you adopted the person in 2021, the

and other details.

person was lawfully placed with you for legal adoption by you

Post-1984 and pre-2009 decree or agreement. The decree

in 2021, or the person was an eligible foster child placed with

2021, the person is considered to have lived with

Decemberyou during 3, 2021

or agreement must state all three of the following.

you for more than half of 2021 if your main home was this per-

1. The noncustodial parent can claim the child as a depend-

son's main home for more than half the time since he or she was

ent without regard to any condition, such as payment of support.

adopted or placed with you in 2021.

2. The other parent won't claim the child as a dependent.

Any other person is considered to have lived with you for all

3.

The years for which the claim is released.

of 2021 if the person was born or died in 2021 and your home

The noncustodial parent must include all of the following pa-

was this person's home for the entire time he or she was alive in

2021 or if you adopted the person in 2021, the person was law-

ges from the decree or agreement.

fully placed with you for legal adoption by you in 2021, or the

Cover page (include the other parent's SSN on that page).

person was an eligible foster child placed with you during 2021

The pages that include all the information identified in (1)

and your main home was the person's main home for the entire

through (3) above.

time since he or she was adopted or placed with you in 2021.

Signature page with the other parent's signature and date

 

Foster child. A foster child is any child placed with you by an

of agreement.

!

You must include the required information even if you

authorized placement agency or by judgment, decree, or other

order of any court of competent jurisdiction.

filed it with your return in an earlier year.

 

Kidnapped child. If your child is presumed by law enforce-

CAUTION

 

 

 

Post-2008 decree or agreement. If the divorce decree or

ment authorities to have been kidnapped by someone who isn't a

family member, you may be able to take the child into account

separation agreement went into effect after 2008, the noncusto-

in determining your eligibility for head of household or qualify-

dial parent can't include pages from the decree or agreement in-

ing widow(er) filing status, the child tax credit, the credit for

stead of Form 8332. The custodial parent must sign either Form

other dependents, and the earned income credit (EIC). For de-

8332 or a substantially similar statement the only purpose of

tails, see Pub. 501 (Pub. 596 for the EIC).

which is to release the custodial parent's claim to certain tax

 

benefits for a child, and the noncustodial parent must include a

Married person. If the person is married and files a joint re-

copy with his or her return. The form or statement must release

turn, you can't claim that person as your dependent. However, if

the custodial parent's claim to the child without any conditions.

the person is married but doesn't file a joint return or files a

For example, the release must not depend on the noncustodial

joint return only to claim a refund of withheld income tax or es-

parent paying support.

timated tax paid, you may be able to claim him or her as a de-

Release of certain tax benefits revoked. A custodial parent

pendent. (See Pub. 501 for details and examples.) In that case,

go to Step 2, question 3 (for a qualifying child), or Step 4, ques-

who has revoked his or her previous release of a claim to certain

tion 4 (for a qualifying relative).

tax benefits for a child must include a copy of the revocation

 

with his or her return. For details, see Form 8332.

 

Multiple support agreements. If no one person contributed

Exception to citizen test. If you are a U.S. citizen or U.S. na-

over half of the support of your relative (or a person who lived

tional and your adopted child lived with you all year as a mem-

with you all year as a member of your household) but you and

ber of your household, that child meets the requirement to be a

another person(s) provided more than half of your relative's

U.S. citizen in Step 2, question 1; Step 3, question 2; Step 4,

support, special rules may apply that would treat you as having

question 2; and Step 5, question 2.

provided over half of the support. For details, see Pub. 501.

Exception to gross income test. If your relative (including a

Permanently and totally disabled. A person is permanently

person who lived with you all year as a member of your house-

and totally disabled if, at any time in 2021, the person can't en-

hold) is permanently and totally disabled (defined later), certain

gage in any substantial gainful activity because of a physical or

-21-

Need more information or forms? Visit IRS.gov.

3. Credit for child and dependent care expenses (Schedule 3, line 2 or 13g).

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.

daughter. However, if your mother's AGI is higher than yours and you do not claim your daughter as a qualifying child, your daughter is the qualifying child of your mother.

Public assistance payments. If you received payments under

For more details and examples, see Pub. 501.

the Temporary Assistance for Needy Families (TANF) program

If you will be claiming the child as a qualifying child, go to

or other public assistance program and you used the money to

Step 2. Otherwise, stop; you can't claim any benefits based on

for all of the

DRAFT AS OF

support another person, see Pub. 501.

this child.

Qualifying child of more than one person. Even if a child

Social security number. You must enter each dependent's so-

meets the conditions to be the qualifying child of more than one

cial security number (SSN). Be sure the name and SSN entered

person, only one person can claim the child as a qualifying child

agree with the dependent's social security card. Otherwise, at

 

following tax benefits, unless the special rule for

 

the time we process your return, we may reduce or disallow any

Children of divorced or separated parents, described earlier,

tax benefits (such as the child tax credit) based on that depend-

applies.

 

 

ent. If the name or SSN on the dependent's social security card

1. Nonrefundable child tax credit and credit for other de-

isn't correct or you need to get an SSN for your dependent, con-

pendents (line 19) and refundable child tax credit or additional

tact the Social Security Administration. See Social Security

child tax credit (line 28).

Number (SSN), earlier. If your dependent won't have a number

December 3, 2021

2. Head of household filing status.

by the date your return is due, see What if You Can't File on

 

 

Time? earlier.

4.Exclusion for dependent care benefits (Form 2441, Part

III).

5.Earned income credit (line 27a).

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.

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 pa- rents 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 2021. 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 high- er adjusted gross income (AGI) for 2021.

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 2021.

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 qualify- ing child of the person who had the highest AGI for 2021, 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 daughter meets the conditions to be a quali- fying child for both you and your mother. Your daughter doesn't meet the conditions to be a qualifying child of any other person, including her other parent. Under the rules just described, you can claim your daughter as a qualifying child for all of the five tax benefits just listed for which you otherwise qualify. Your mother can't claim any of those five tax benefits based on your

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 Social Security Administration before the due date of your 2021 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 im- migration status has changed so that your child is now a U.S. citizen or permanent resident, ask the SSA for a new social se- curity 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 2021 and you do not have an SSN for the child, enter “Died” in column (2) of 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 2021 return (in- cluding extensions), you can't claim the child tax credit or the credit for other dependents on your original or an amended 2021 return.

If you apply for an ITIN on or before the due date of your 2021 return (including extensions) and the IRS issues you an ITIN as a result of the application, the IRS will consider your ITIN as issued on or before the due date of your return.

Student. A student is a child who during any part of 5 calendar months of 2021 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 of- fering courses only through the Internet.

Need more information or forms? Visit IRS.gov.

-22-

 

 

 

 

 

 

 

Foreign-Source Income

 

 

own individual income tax return. The

Income

 

 

 

 

 

 

 

 

 

 

as interest,

dividends,

 

and

pensions,

ing your self-employment tax. For that

 

 

 

 

 

 

 

You must report unearned income, such

only exception is for purposes of figur-

 

 

 

 

 

 

 

 

 

 

Generally,

you must report all income

from sources outside the United States

purpose, you must take into account all

your self-employment income for the

except income that is exempt from tax

unless exempt

by law

or a tax treaty.

year from services performed both be-

by law. For details, see the following in-

You must

also

report

earned

income,

fore and after the beginning of the case.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DRAFT AS OF

structions and the Schedule

1 instruc-

such as

wages

and

tips,

from sources

Also, you (or the trustee if one is ap-

tions, especially the instructions for lines

outside the United States.

 

 

 

 

 

pointed) must allocate between you and

1 through

7 and Schedule

1, lines 1

If you worked abroad, you may be

the bankruptcy estate the wages, salary,

through 8z. Also see Pub. 525.

 

 

 

 

able to exclude part or all of your for-

or other compensation and withheld in-

Forgiveness of Paycheck

eign earned income. For details, see

come tax reported to you on Form W-2.

 

 

 

 

 

 

 

December 3, 2021

Protection Program (PPP)

 

 

 

 

 

 

 

 

 

 

 

 

 

come and withheld income tax reported

Loans

 

 

 

 

 

Pub. 54 and Form 2555.

 

 

 

 

 

 

 

A similar allocation is required for in-

 

 

 

 

 

 

 

Foreign retirement plans. If you were

 

 

 

The forgiveness of a PPP Loan creates

a beneficiary of

a

foreign retirement

include a statement that indicates you

plan, you may have to report the undis-

tax-exempt

income, so

although you

filed a chapter 11 case and that explains

tributed

income

earned

in your

plan.

don't need to report the income from the

how income and withheld income tax re-

However, if you were the beneficiary of

forgiveness of your PPP Loan on Form

ported to you on Forms W-2 and 1099

a Canadian

registered

retirement

plan,

1040 or 1040-SR, you do need to report

are allocated between you and the estate.

see Rev. Proc. 2014-55, 2014-44 I.R.B.

certain information related to your PPP

For more details, including acceptable

753,

available

 

at

 

 

IRS.gov/irb/

Loan.

 

 

 

 

 

 

 

 

allocation methods, see Notice 2006-83,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014-44_IRB#RP2014-55, to find out if

 

 

 

 

 

 

 

2006-40 I.R.B. 596, available at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rev. Proc. 2021-48,

2021-49

I.R.B.

you can elect to defer tax on the undis-

IRS.gov/irb/

835,

permits taxpayers

to treat

tax-ex-

tributed income.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2006-40_IRB#NOT-2006-83.

empt income resulting from the forgive-

Report

distributions

from

foreign

 

 

 

Community Property States

ness of a PPP Loan as received or ac-

pension plans on lines 5a and 5b.

 

 

crued: (1) as, and to the extent that, eli-

Foreign

accounts

and

trusts. You

Community property states include Ari-

gible expenses are paid or incurred; (2)

zona, California, Idaho, Louisiana, Ne-

when you apply for forgiveness of the

must complete Part III of Schedule B if

vada, New Mexico, Texas, Washington,

PPP Loan; or (3) when forgiveness of

you:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and Wisconsin. If you and your spouse

the PPP Loan is granted. If

you have

Had a foreign account; or

 

 

 

 

 

 

lived in a community property state, you

tax-exempt

income resulting

from the

Received

a

distribution

from, or

must usually follow state law to deter-

forgiveness

of a PPP

Loan, attach a

were a grantor of, or a transferor to, a

mine what is community income and

statement to your return reporting each

foreign trust.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

what is separate income. For details, see

taxable year for which you are applying

Foreign

financial

assets. If

you

had

Form 8958 and Pub. 555.

Rev. Proc. 2021-48, and which section

foreign

financial

assets

in 2021,

you

Nevada, Washington, and California

of Rev. Proc. 2021-48 you are apply-

may have to file Form 8938. See Form

domestic partners. A registered do-

ing—either section 3.01(1), (2), or (3).

8938 and its instructions.

 

 

 

 

 

 

 

 

 

 

mestic partner in Nevada, Washington,

Any statement should include the fol-

Chapter 11 Bankruptcy

 

 

 

 

or California must generally report half

lowing information for each PPP Loan:

 

 

1.

Your name, address, and ITIN or

Cases

 

 

 

 

 

 

 

 

 

 

 

the combined community income of the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SSN;

 

 

 

 

 

 

If you are a debtor in a chapter 11 bank-

individual and his or her domestic part-

 

 

 

 

 

 

ner. See Form 8958 and Pub. 555.

2. A statement that you are applying

ruptcy case, income taxable to the bank-

Rounding Off to Whole

or applied section 3.01(1), (2), or (3) of

ruptcy estate and reported on the estate's

Rev. Proc. 2021-48, and for what taxa-

income tax return includes:

 

 

 

Dollars

ble year (2020 or 2021) as applicable;

Earnings from

services

you

per-

You can round off cents to whole dollars

3.

The

amount of

tax-exempt in-

formed after the beginning of the case

on your return and schedules. If you do

(both wages and

self-employment in-

come from forgiveness of the PPP Loan

round to whole dollars, you must round

come); and

 

 

 

 

 

 

 

 

 

 

 

that you are treating as received or ac-

 

 

 

 

 

 

 

 

 

 

 

all amounts. To round, drop amounts un-

Income from property described in

crued and for what taxable year (2020 or

der 50 cents and increase amounts from

2021); and

 

 

 

 

 

section 541 of title 11 of the U.S. Code

50 to 99 cents to the next dollar. For ex-

 

 

 

 

 

that you either owned when the case be-

4.

Whether forgiveness of the PPP

ample, $1.39 becomes $1 and $2.50 be-

gan or that you acquired after the case

Loan has been granted as of the date you

began and before the case was closed,

comes $3.

file your return.

 

 

 

 

dismissed, or converted to a case under a

If you have to add two or more

Write “RP2021-48” at the top of your

different chapter.

 

 

 

 

 

 

 

 

 

amounts to figure the amount to enter on

attached statement.

 

 

 

 

Because this income is taxable to the

a line, include cents when adding the

 

 

 

 

 

 

 

amounts and round off only the total.

 

 

 

 

 

 

 

estate, don’t include this income on your

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-23-

 

 

 

 

 

Need more information or forms? Visit IRS.gov.

If you are entering amounts that in-

!

You may owe social security

for section 401(k)(11) and SIMPLE

clude cents, make sure to include the

and Medicare or railroad re-

plans). This additional deferral amount

decimal point. There is no cents column

CAUTION tirement

(RRTA) tax on

unre-

isn't subject to the overall limit on elec-

on the form.

ported tips. See the instructions for

tive deferrals.

 

 

 

 

!

 

The lines on Forms 1040 and

Schedule 2, line 5.

 

 

!

You can't deduct the amount

 

 

 

 

 

 

 

 

1040-SR are the same. Referen-

 

 

 

 

 

 

deferred. It isn't included as in-

 

 

 

DRAFT AS OF

your Form

CAUTION ces to lines in the following in-

Dependent

care

benefits, which

CAUTION come in

box 1 of

structions

refer to the line on either

should be shown in

box 10 of

your

W-2.

 

 

 

 

 

form.

 

 

 

 

 

Form(s) W-2. But first complete Form

Disability

 

 

 

 

 

 

 

 

 

2441 to see if you can exclude part or all

pensions

shown on

 

 

 

 

 

 

of the benefits.

 

 

 

Form 1099-R if you haven’t reached the

Line 1

 

 

 

 

 

 

 

 

 

Employer-provided adoption bene-

minimum retirement age set by your em-

December 3,mum

2021

Wages, Salaries, Tips, etc.

fits, which should be shown in box 12 of

ployer. But see Insurance Premiums for

your Form(s) W-2 with code T. But see

Retired Public Safety Officers in the in-

Enter the total of your wages, salaries,

the Instructions for Form 8839 to find

structions for lines 5a and 5b. Disability

tips, etc. If a joint return, also include

out if you can exclude part or all of the

pensions received after you reach mini-

your spouse's income. For most people,

benefits. You may also be able to ex-

 

retirement age and other payments

the amount to enter on this line should

clude amounts if you adopted a child

 

shown on Form 1099-R (other than pay-

be shown in box 1 of their Form(s) W-2.

with special needs and the adoption be-

ments from an IRA*) are reported on

But the following types of income must

came final in 2021.

 

 

lines 5a and 5b. Payments from an IRA

also be included in the total on line 1.

Scholarship and fellowship grants

are reported on lines 4a and 4b.

All wages received as a household

not reported on Form W-2. Also enter

Corrective distributions from a re-

employee. An employer isn’t required to

“SCH” and the amount on the dotted

tirement plan shown on Form 1099-R of

provide a Form W-2 to you if he or she

line next to line 1. However, if you were

excess elective deferrals and excess con-

paid you wages of less than $2,300 in

a degree candidate, include on line 1 on-

tributions (plus earnings). But don’t in-

2021. If you received wages as a house-

ly the amounts you used for expenses

clude distributions from an IRA* on

hold employee and you didn’t receive a

other than tuition and course-related ex-

line 1. Instead, report distributions from

Form W-2 because an employer paid

penses. For example, amounts used for

an IRA on lines 4a and 4b.

 

 

you less than $2,300 in 2021, enter

room, board, and travel must be reported

Wages from Form 8919, line 6.

“HSH” and the amount not reported to

on line 1.

elective

deferrals.

The

*This includes a Roth, SEP, or SIMPLE IRA.

you on a Form W-2 in the space to the

Excess

 

 

 

 

 

 

left of line 1. For information on em-

amount deferred should be shown in

 

 

 

 

 

 

ployment taxes for household employ-

box 12 of your Form W-2, and the “Re-

Were You a Statutory Employee?

ees, see Tax Topic 756.

tirement plan” box in box 13 should be

 

 

 

waiver payments

checked. If the total amount you (or

If you were a statutory employee, the

Any

Medicaid

you received that you choose to include

your spouse if filing jointly) deferred for

“Statutory employee” box in box 13 of

in earned income for purposes of claim-

2021

under

all

plans

was more

than

your Form W-2 should be checked. Stat-

ing a credit or other tax benefit, even if

$19,500 (excluding catch-up contribu-

utory employees include full-time life

you didn’t receive a Form W-2 reporting

tions as explained later), include the ex-

insurance salespeople and certain agent

these payments. See the instructions for

cess on line 1. This limit is (a) $13,500

or commission drivers, certain traveling

Schedule 1, line 8z.

if you have only SIMPLE plans, or (b)

salespeople, and

certain homeworkers.

Tip income you didn't report to

$22,500 for section 403(b) plans if you

Statutory employees report the amount

your employer. This should include any

qualify for the 15-year rule in Pub. 571.

shown in box 1 of Form W-2 on a

allocated tips shown in box 8 on your

Although designated Roth contributions

Schedule C along with any related busi-

Form(s) W-2 unless you can prove that

are subject to this limit, don’t include

ness expenses.

 

 

 

 

your unreported tips are less than the

the excess attributable to such contribu-

Missing or Incorrect Form W-2?

amount in box 8. Allocated tips aren't in-

tions on line 1. They are already inclu-

cluded as income in box 1. See Pub. 531

ded as income in box 1 of your Form

Your employer is required to provide or

for more details. Also include the value

W-2.

 

 

 

 

 

 

 

 

 

 

send Form W-2 to you no later than

of any noncash tips you received, such

 

 

 

 

 

 

A higher limit may apply to partici-

January 31, 2022. If you don’t receive it

as tickets, passes, or other items of val-

pants

in section

457(b) deferred

com-

by early February, use

Tax Topic 154

to

ue. Although you don’t report these non-

pensation plans for the 3 years before re-

find out what to do. Even if you don’t

cash tips to your employer, you must re-

tirement age. Contact your plan adminis-

get a Form W-2, you must still report

port them on line 1.

trator for more information.

 

your earnings on line 1. If you lose your

 

 

 

 

 

 

 

 

 

 

 

 

 

If you were age 50 or older at the end

Form W-2 or it is incorrect, ask your

 

 

 

 

 

 

employer for a new one.

 

 

 

 

 

 

 

 

of 2021, your employer may have al-

 

 

 

 

 

 

 

 

 

 

 

 

lowed an additional deferral (catch-up

 

 

 

 

 

 

 

 

 

 

 

 

contributions) of up to $6,500 ($3,000

 

 

 

 

 

 

Need more information or forms? Visit IRS.gov.

 

 

-24-

 

 

 

 

 

 

 

 

Line 2a

 

 

 

ble bond premium or acquisition premi-

stock, you can't count certain days dur-

 

 

 

um, see Pub. 550.

 

 

 

 

 

 

 

 

ing which your risk of loss was dimin-

Tax-Exempt Interest

 

 

Interest credited in 2021 on deposits

ished. See Pub. 550 for more details.

 

 

Preferred dividends attributable to peri-

If you received any tax-exempt interest

that you couldn't withdraw because of

ods totaling less than 367 days are sub-

(including any tax-exempt original issue

the bankruptcy or insolvency of the fi-

ject to the 61-day holding period rule

discount (OID)), such as from municipal

nancial institution may not have to be

just described.

 

 

 

 

 

 

DRAFTinterest that includesASamounts

in

 

OF

 

 

bonds, each payer should send you a

included in your 2021 income. For de-

 

 

Dividends on any share of stock to

Form 1099-INT or a Form 1099-OID. In

tails, see Pub. 550.

 

 

 

 

 

 

 

the extent that you are under an obliga-

general, your tax-exempt stated interest

 

If

you

get

a

2021

Form

tion (including a short sale) to make re-

should be shown in box 8 of Form

TIP 1099-INT for U.S. savings bond

lated payments with respect to positions

1099-INT

or, for a tax-exempt

OID

 

 

 

 

 

 

 

 

 

 

 

 

 

substantially similar or related proper-

December 3,

 

 

2021

bond, in box 2 of Form 1099-OID and

you reported before 2021, see Pub. 550.

ty.

 

• Payments in lieu of dividends, but

your tax-exempt OID should be shown

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in box 11 of Form 1099-OID. Enter the

Line 3a

 

 

 

 

 

 

 

 

 

 

only if you know or have reason to

total on line 2a. However, if you ac-

 

 

 

 

 

 

 

 

 

 

know that the payments aren't qualified

quired a tax-exempt bond at a premium,

Qualified Dividends

 

 

 

 

dividends.

 

 

 

 

only report the net amount of tax-ex-

 

 

 

 

 

 

Dividends from a corporation that

empt interest on line 2a (that is, the ex-

Enter your total qualified dividends on

first became a surrogate foreign corpora-

cess of the tax-exempt interest received

line 3a. Qualified dividends are also in-

tion after December 22, 2017, other than

during the year over the amortized bond

cluded in the ordinary dividend total re-

a foreign corporation that is treated as a

premium for the year). Also, if you ac-

quired to be shown on line 3b. Qualified

domestic

corporation

under

section

quired a tax-exempt OID bond at an ac-

dividends are eligible for a lower tax

7874(b).

 

 

 

 

 

quisition premium, only report the net

rate than other ordinary income. Gener-

 

Example 1. You bought 5,000 shares

amount of tax-exempt OID on line 2a

ally,

these

dividends

are

shown

in

of XYZ Corp. common stock on July 8,

(that is, the excess of tax-exempt OID

box 1b of Form(s) 1099-DIV. See Pub.

2021. XYZ Corp. paid a cash dividend

for the year over the amortized acquisi-

550 for the definition of qualified divi-

of 10 cents per share. The ex-dividend

tion premium for the year). See Pub. 550

dends if you received dividends not re-

date

was

July 16, 2021. Your Form

for more information about OID, bond

ported on Form 1099-DIV.

 

 

 

 

 

 

 

 

 

 

1099-DIV from XYZ Corp. shows $500

premium, and acquisition premium.

Exception. Some dividends may be re-

in box 1a (ordinary dividends) and in

 

 

 

 

 

 

Also include on line 2a any ex-

ported as qualified dividends in box 1b

box 1b (qualified dividends). However,

empt-interest dividends from a mutual

of Form 1099-DIV but aren't qualified

you sold the 5,000 shares on August 11,

fund or other regulated investment com-

dividends. These include:

 

 

 

 

 

2021. You held your shares of XYZ

pany. This amount should be shown in

Dividends you received as a nomi-

Corp. for only 34 days of the 121-day

box 11 of Form 1099-DIV.

 

 

nee. See the Schedule B instructions.

 

 

period (from July 9, 2021, through Au-

Don’t include interest earned on your

Dividends you received on any

gust 11, 2021). The 121-day period be-

IRA, health savings account, Archer or

share of stock that you held for less than

gan on May 17,

2021 (60 days before

61 days during the 121-day period that

the

ex-dividend

date),

and ended on

Medicare Advantage MSA, or Coverdell

began 60 days before

the

ex-dividend

September 14, 2021. You have no quali-

education savings account.

 

 

 

 

date. The ex-dividend date is the first

fied dividends from XYZ Corp. because

 

Don't include any amounts re-

!

date following the declaration of a divi-

you held the XYZ stock for less than 61

lated to the forgiveness of PPP

dend on which the purchaser of a stock

days.

 

 

 

 

 

 

CAUTION Loans on this line.

 

 

isn't entitled to receive the next dividend

 

Example 2. The facts are the same as

 

 

 

 

 

 

payment. When counting the number of

 

 

 

 

 

 

 

in Example 1 except that you bought the

Line 2b

 

 

 

you disposed of the stock but not the day

 

 

 

 

 

 

days you held the stock, include the day

stock on July 15, 2021 (the day before

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Interest

 

 

follow. Also, when counting the number

the ex-dividend date), and you sold the

 

 

stock on September 16, 2021. You held

 

 

 

 

 

 

you acquired it. See the examples that

 

 

 

 

 

 

 

 

 

Each

payer should

send you a

Form

of days you

held

the

stock, you

can't

the

stock

for

63

days

(from

July 16,

2021, through September 16, 2021). The

1099-INT

or Form

1099-OID.

Enter

count certain

days

during

which

your

$500

of

qualified dividends shown in

your

total

taxable interest income on

risk

of loss

was

diminished. See

Pub.

box 1b of Form 1099-DIV are all quali-

line 2b. But you must fill in and attach

550 for more details.

 

 

 

 

 

 

 

 

 

 

 

 

fied

dividends because

you held the

Schedule B if the total is over $1,500 or

• Dividends attributable to periods

stock for 61 days of the 121-day period

any of the other conditions listed at the

totaling more than 366 days that you re-

(from July 16, 2021, through September

beginning of the Schedule B instructions

ceived on any share of preferred stock

14, 2021).

 

 

 

 

applies to you.

 

 

 

held for less than 91 days during the

 

 

 

 

 

 

 

 

Example

3. You bought

10,000

For more details about reporting taxa-

181-day period that began 90 days be-

 

ble interest, including market discount

fore the ex-dividend date. When count-

shares of ABC Mutual Fund common

on bonds and adjustments for amortiza-

ing

the number

of days

you held

the

stock

on

July 8, 2021. ABC

Mutual

 

 

 

 

 

 

 

 

 

 

-25-

 

 

 

Need more information or forms? Visit IRS.gov.

Fund paid a cash dividend of 10 cents a

Lines 4a and 4b

 

 

a.

Distribution code T is shown in

share. The ex-dividend date was July 16,

 

 

box 7 of Form 1099-R and you made a

2021. The ABC Mutual Fund advises

IRA Distributions

 

 

contribution (including a conversion) to

you that the part of the dividend eligible

 

 

a Roth IRA for 2015 or an earlier year.

to be treated as qualified dividends

You should receive a Form 1099-R

b.

Distribution code Q is shown in

equals 2 cents a share. Your Form

showing the total amount of any distri-

box 7 of Form 1099-R.

 

1099-DIV from ABC Mutual Fund

bution from your IRA before income tax

 

 

 

 

dividends fromDRAFT AS OF

 

shows total ordinary dividends of $1,000

or other deductions were withheld. This

3. You converted part or all of a tra-

and qualified dividends of $200. How-

amount should be shown in box 1 of

ditional, SEP, or SIMPLE IRA to a Roth

ever, you sold the 10,000 shares on Au-

Form 1099-R. Unless otherwise noted in

IRA in 2021.

 

 

gust

11,

2021.

You

have no

qualified

the line 4a and 4b instructions, an IRA

4. You had a 2020 or 2021 IRA con-

 

 

 

 

ABC Mutual Fund be-

includes a

traditional

IRA, Roth IRA,

tribution returned to you, with the rela-

December1099-R, box 1) on line 4b.

3, 2021

cause you held the ABC Mutual Fund

simplified

employee

pension

(SEP)

ted earnings or less any loss, by the due

stock for less than 61 days.

 

 

 

 

 

IRA, and a savings incentive match plan

date (including extensions) of your tax

 

 

Use

the Qualified

Dividends

for employees (SIMPLE) IRA. Except

return for that year.

 

 

TIP

as provided next, leave line 4a blank and

5.

You made excess contributions to

and

Capital

Gain

Tax

Work-

enter the total distribution (from Form

your

IRA for an earlier year and

had

 

 

sheet or the

Schedule

D

Tax

 

 

 

 

 

 

 

them returned to you in 2021.

 

Worksheet, whichever applies, to figure

Exception 1. Enter the total distribution

 

6. You recharacterized part or all of

your tax. See the instructions for line 16

for details.

 

 

 

 

 

 

 

 

 

on line 4a if you rolled over part or all of

a contribution to a Roth IRA as a contri-

 

 

 

 

 

 

 

 

 

 

 

 

the distribution from one:

 

 

bution to another type of IRA, or vice

 

 

 

 

 

 

 

 

 

 

 

 

Roth IRA to another Roth IRA, or

versa.

 

 

Line 3b

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

• IRA (other than a Roth IRA) to a

Exception 3. If all or part of the distri-

Ordinary Dividends

 

 

 

 

 

qualified plan or another IRA (other

 

 

 

 

 

than a Roth IRA).

 

 

 

bution is a qualified charitable distribu-

Each payer should send you a Form

Also enter “Rollover” next to line 4b.

tion (QCD), enter the total distribution

1099-DIV. Enter your total ordinary div-

If the total distribution was rolled over,

on line 4a. If the total amount distributed

idends on line 3b. This amount should

enter -0- on line 4b. If the total distribu-

is a QCD, enter -0- on line 4b. If only

be

shown

in

box

1a

of

Form(s)

tion wasn't rolled over, enter the part not

part of the distribution is a QCD, enter

1099-DIV.

 

 

 

 

 

 

 

 

 

rolled over on line 4b unless Exception 2

the part that is not a QCD on line 4b un-

You

must

fill in and

attach

Sched-

applies to the part not rolled over. Gen-

less Exception 2 applies to that part. En-

ter “QCD” next to line 4b.

 

erally, a rollover must be made within

 

ule B if the total is over $1,500 or you

 

A QCD is a distribution made direct-

60 days after the day you received the

received, as

a nominee,

ordinary divi-

distribution. For more details

on roll-

ly by the trustee of your IRA (other than

dends that actually belong to someone

overs, see Pub. 590-A and Pub. 590-B.

an ongoing SEP or SIMPLE IRA) to an

else.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If you rolled over the distribution into

organization eligible to receive tax-de-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ductible contributions (with certain ex-

Nondividend Distributions

 

 

 

 

a qualified plan or you made the rollover

 

 

 

 

ceptions). You must have been at least

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Some distributions are a return of your

in 2022, include a statement explaining

age 70 1/2 when

the distribution

was

what you did.

 

 

 

cost

(or

other

basis). They

won't

be

 

 

 

made.

 

 

Exception 2. If any of the following ap-

 

 

taxed until you

recover

your

cost

(or

Generally, your

total QCDs for

the

ply, enter the total distribution on line 4a

other basis). You must reduce your cost

year can't be more than $100,000. (On a

and see Form 8606 and its instructions

(or

other basis)

by these distributions.

joint return, your spouse can also have a

to figure the amount to enter on line 4b.

After you get back all of your cost (or

QCD of up to $100,000.) The amount of

1. You received a distribution from

other basis), you must report these dis-

the QCD is limited to the amount that

tributions as capital gains on Form 8949.

an IRA (other than a Roth IRA) and you

would otherwise be included in your in-

For details, see Pub. 550.

 

 

 

 

 

 

made nondeductible contributions to any

 

 

 

 

 

 

come. If your IRA includes nondeducti-

 

 

 

 

 

 

 

 

 

 

 

 

of your traditional or SEP IRAs for 2021

 

 

Dividends on insurance poli-

ble contributions, the distribution is first

 

 

or an earlier year. If you made nonde-

TIP cies are a partial return of the

considered to be paid out of otherwise

ductible contributions to these IRAs for

 

 

premiums you paid. Don’t re-

taxable income. See Pub. 590-B for de-

 

 

2021, also

see Pub.

590-A and Pub.

port them as dividends. Include them in

tails.

 

 

 

590-B.

 

 

 

 

 

 

 

income on Schedule 1, line 8z, only if

 

 

 

 

 

You can't

claim a charitable

2. You received a distribution from

!

they exceed the total of all net premiums

contribution deduction for any

you paid for the contract.

 

 

 

 

 

 

a Roth IRA. But if either (a) or (b) be-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

low applies, enter -0-

on line

4b; you

CAUTION QCD not included in your in-

 

 

 

 

 

 

 

 

 

 

 

 

come.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

don’t have to see Form 8606 or its in-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

structions.

 

 

 

 

Exception 4. If all or part of the distri-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

bution is a health savings account (HSA)

Need more information or forms? Visit IRS.gov.

-26-

funding distribution (HFD), enter the to-

 

 

 

 

 

 

 

 

 

 

show the taxable amount, you must use

Lines 5a and 5b

 

 

 

 

 

tal distribution on line 4a. If the total

 

 

 

 

 

the General Rule explained in Pub. 939

amount distributed is an HFD and you

Pensions and Annuities

 

 

 

to figure the taxable part to enter on

elect to exclude it from income, enter -0-

 

 

 

line 5b. But if your annuity starting date

on line 4b. If only part of the distribu-

You should receive a Form 1099-R

(defined later) was after July 1, 1986,

tion is an HFD and you elect to exclude

showing the total amount of your pen-

see Simplified Method, later, to find out

that part from income, enter the part that

sion and annuity payments before in-

if you must use that method to figure the

rectly by the trusteeDRAFTof your IRA (other

AS OF

isn't an HFD on line 4b unless Exception

come tax or other deductions were with-

taxable part.

2 applies to that part. Enter “HFD” next

held. This amount should be shown in

You can ask the IRS to figure the tax-

to line 4b.

 

 

 

box 1 of Form 1099-R. Pension and an-

able part for you for a $1,000 fee. For

An

HFD is

a distribution made di-

nuity

payments

include

distributions

details, see Pub. 939.

from 401(k), 403(b), and governmental

 

 

 

 

 

 

If your Form 1099-R shows a taxable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DecemberDisability pensions received before3,the

2021

than an ongoing SEP or SIMPLE IRA)

457(b)

plans. Rollovers and

lump-sum

amount, you can report that amount on

to your HSA. If eligible, you can gener-

distributions are

explained

later. Don’t

line 5b. But you may be able to report a

ally elect to exclude an HFD from your

include the following payments on lines

lower taxable amount by using the Gen-

5a and

5b. Instead,

report

them

on

income once in your lifetime. You can't

eral Rule or the Simplified Method or if

line 1.

 

 

 

 

 

 

 

 

 

exclude more

than the limit on

HSA

 

 

 

 

 

 

 

 

 

 

exclusion for retired public safety of-

 

 

 

 

 

 

 

 

 

 

contributions or more than the amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ficers, discussed next, applies.

you reach the minimum retirement age

that would otherwise be included in your

 

 

set by your employer.

 

 

 

 

 

 

 

 

income. If your IRA includes nondeduc-

 

 

 

 

 

 

Insurance Premiums for Retired

• Corrective distributions (including

tible contributions, the HFD is first con-

sidered to be paid out of otherwise taxa-

any earnings) of excess elective defer-

Public Safety Officers

ble income. See Pub. 969 for details.

rals or other excess contributions to re-

If you are an eligible retired public safe-

 

 

The amount of an HFD reduces

tirement plans. The plan must advise

ty officer (law enforcement officer, fire-

!

 

you of the year(s) the distributions are

fighter, chaplain, or member of a rescue

 

the amount you can contribute

includible in income.

 

 

 

 

 

 

squad or ambulance crew), you can elect

CAUTION

to your HSA for the year. If you

 

Attach

Form(s)

1099-R

to

to

exclude from income distributions

fail to

maintain eligibility for an

HSA

 

TIP Form 1040 or 1040-SR if any

made from your eligible retirement plan

for the 12 months following the month of

 

federal

income tax

was

with-

that are used to pay the premiums for

the HFD, you may have to report the

 

held.

 

 

 

 

 

 

 

 

 

coverage by an accident or health plan

HFD as income and pay an additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or a long-term care insurance contract.

tax. See Form 8889, Part III.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fully Taxable Pensions and

 

 

 

You can do this only if you retired be-

 

 

 

 

 

 

 

 

 

More than one exception applies. If

 

 

 

cause of disability or because you

more than one exception applies, include

Annuities

 

 

 

 

 

 

 

reached normal retirement age. The pre-

a statement showing the amount of each

Your payments are fully taxable if (a)

miums can be for coverage for you, your

exception, instead of making an entry

you didn't contribute to the cost (see

spouse, or dependents. The distribution

next to line 4b. For example: “Line 4b –

Cost, later) of your pension or annuity,

must be from a plan maintained by the

$1,000 Rollover and $500 HFD.” But

or (b) you got your entire cost back tax

employer from which you retired as a

you do not need to attach a statement if

free before 2021. But see Insurance Pre-

public safety officer. Also, the distribu-

only Exception 2 and one other excep-

miums for Retired Public Safety Offi-

tion must be made directly from the plan

tion apply.

 

 

 

cers, later. If your pension or annuity is

to the provider of the accident or health

More than one distribution. If you (or

fully taxable, enter the total pension or

plan or long-term care insurance con-

annuity

payments

(from

Form(s)

tract. You can exclude from income the

your

spouse if

filing jointly) received

1099-R, box 1) on line 5b; don’t make

smaller of the amount of the premiums

more

than one

distribution,

figure the

an entry on line 5a.

 

 

 

 

 

 

or $3,000. You can make this election

taxable amount of each distribution and

 

 

 

 

 

 

Fully taxable pensions and annuities

only for amounts that would otherwise

enter the total of the taxable amounts on

be included in your income.

line 4b. Enter the total amount of those

also include military retirement pay

An eligible retirement plan is a gov-

distributions on line 4a.

 

 

shown on Form 1099-R. For details on

 

 

You may have to pay an addi-

military

disability pensions,

see

Pub.

ernmental plan that is a qualified trust or

!

 

525.

If

you

received

 

a

Form

a section 403(a), 403(b), or 457(b) plan.

 

tional

tax if you received an

 

 

RRB-1099-R, see Pub. 575 to find out

If you make this election, reduce the

CAUTION

early

distribution

from

your

how to report your benefits.

 

 

 

 

 

otherwise taxable amount of your pen-

IRA and the total wasn't rolled over. See

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

sion or annuity by the amount excluded.

the instructions for Schedule 2, line 8,

Partially Taxable Pensions and

The amount shown in box 2a of Form

for details.

 

 

 

 

 

 

 

 

 

Annuities

 

 

 

 

 

 

 

1099-R doesn't reflect the exclusion. Re-

More information. For more informa-

Enter the total pension or annuity pay-

port your total distributions on line 5a

tion

about IRAs, see Pub.

590-A and

and the taxable amount on line 5b. Enter

ments (from Form 1099-R, box 1) on

Pub. 590-B.

 

 

 

“PSO” next to line 5b.

 

 

 

line 5a.

If your

Form 1099-R doesn't

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-27-

 

 

 

 

Need more information or forms? Visit IRS.gov.

Simplified Method Worksheet—Lines 5a and 5b

Keep for Your Records

Before you begin:

If you are the beneciary of a deceased employee or former employee who died before August 21, 1996, include

 

any death benet 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, gure 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 2021 on Form 1040 or

of last year’sDRAFT AS OF

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.

 

 

2. Enter your cost in the plan at the annuity starting date

2.

 

 

 

 

Note. If you completed this worksheet last year, skip line 3 and enter the amount from line 4

 

 

 

 

 

worksheet on line 4 below (even if the amount of your pension or annuity has

 

 

 

 

 

4.December 3, 2021

changed). Otherwise, go to line 3.

 

 

 

 

 

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 beneciary, enter the appropriate

 

 

 

 

 

number from Table 2 below

3.

 

 

 

 

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

. . . . . .

. . . . . . . . 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 ofcer, see Insurance Premiums for Retired Public

Safety Ofcers before entering an amount on line 5b . . . . . . . . . . . . . . . . . . . . . . 9.

10.Was your annuity starting date before 1987?

Yes.

STOP

Do not complete the rest of this worksheet.

No.

 

 

 

 

Add lines 6 and 8. This is the amount you have recovered tax free through 2021. You will need this

 

number if you need to ll 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1 for Line 3 Above

 

 

 

 

 

 

 

 

 

 

AND your annuity starting date was—

 

IF the age at annuity starting

before November 19, 1996,

 

after November 18, 1996,

 

date was . . .

 

enter on line 3 . . .

 

 

enter on line 3 . . .

 

 

55 or under

300

 

 

360

 

 

 

 

56–60

260

 

 

310

 

 

 

 

61–65

240

 

 

260

 

 

 

 

66–70

170

 

 

210

 

 

 

 

71 or older

120

 

 

160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2 for Line 3 Above

 

 

 

 

 

 

 

IF the combined ages at annuity

 

 

 

 

 

 

 

 

 

 

starting date were . . .

 

 

THEN enter on line 3 . . .

 

 

110 or under

 

 

 

410

 

 

 

 

 

 

111–120

 

 

 

360

 

 

 

 

 

 

121–130

 

 

 

310

 

 

 

 

 

 

131–140

 

 

 

260

 

 

 

 

 

 

141 or older

 

 

 

210

 

 

 

 

 

Need more information or forms? Visit IRS.gov.

-28-

If you are retired on disability and re- porting your disability pension on line 1, include only the taxable amount on that line and enter “PSO” and the amount ex- cluded on the dotted line next to line 1.

If you are the beneficiary of an em- ployee who died, see Pub. 575. If there is more than one beneficiary, see Pub. 575 or Pub. 721 to figure each benefi- ciary's taxable amount.

If you or the plan participant TIP was born before January 2, 1936, you could pay less tax on

the distribution. See Form 4972.

Simplified Method

Cost

 

 

 

Lines 6a and 6b

 

 

 

 

DRAFT ASty

OF

 

 

 

You must use the Simplified Method if

Your cost is generally your net invest-

Social Security Benefits

 

either of the following applies.

ment in the plan as of the annuity start-

You should receive a Form SSA-1099

1. Your annuity starting date was af-

ing date. It doesn't include pre-tax con-

showing in box 3 the total social securi-

ter July 1, 1986, and you used this meth-

tributions. Your net investment may be

 

benefits paid to you. Box 4 will show

od last year to figure the taxable part.

shown in box 9b of Form 1099-R.

 

the amount of any benefits you repaid in

Decemberretirement plan that is contributed 3,to an-

Use2021the

2. Your annuity starting date was af-

Rollovers

 

 

2021. If you received railroad retirement

ter November 18, 1996, and both of the

 

 

benefits treated as social security, you

following apply.

Generally, a ro