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            Department of the Treasury                        Contents
            Internal Revenue Service
                                                              What's New    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                                                              Reminders    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Publication 554
Cat. No. 15102R                                               Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                                                              Chapter  1.  2022 Filing Requirements . . . . . . . . . .                  5
                                                                General Requirements            . . . . . . . . . . . . . . . . . . . .  5
Tax Guide
                                                              Chapter  2.  Taxable and Nontaxable Income . . . . .                       6
                                                                Compensation for Services . . . . . . . . . . . . . . . . .              6
for Seniors                                                     Retirement Plan Distributions           . . . . . . . . . . . . . . . .  7
                                                                Social Security and Equivalent Railroad 
For use in preparing                                                Retirement Benefits         . . . . . . . . . . . . . . . . . . .    12
                                                                Sickness and Injury Benefits            . . . . . . . . . . . . . . .    15
2022 Returns                                                    Life Insurance Proceeds           . . . . . . . . . . . . . . . . . .    16
                                                                Sale of Home . . . . . . . . . . . . . . . . . . . . . . . . . .         17
                                                                Reverse Mortgages           . . . . . . . . . . . . . . . . . . . . .    19
                                                                Other Items     . . . . . . . . . . . . . . . . . . . . . . . . . . .    19
                                                              Chapter  3.  Adjustments to Income . . . . . . . . . . .                   20
                                                                Individual Retirement Arrangement (IRA) 
                                                                    Contributions and Deductions              . . . . . . . . . . . .    20
                                                              Chapter  4.  Deductions         . . . . . . . . . . . . . . . . . . . .    21
                                                                Standard Deduction          . . . . . . . . . . . . . . . . . . . . .    21
                                                                Itemized Deductions . . . . . . . . . . . . . . . . . . . . .            22
                                                              Chapter  5.  Credits    . . . . . . . . . . . . . . . . . . . . . . . .    26
                                                                Credit for the Elderly or the Disabled              . . . . . . . . .    26
                                                                Child and Dependent Care Credit                 . . . . . . . . . . .    29
                                                                Earned Income Credit (EIC)            . . . . . . . . . . . . . . . .    29
                                                              Chapter  6.  Estimated Tax . . . . . . . . . . . . . . . . . .             31
                                                                Who Must Make Estimated Tax Payments                        . . . . .    31
                                                              Chapter  7.  How To Get Tax Help . . . . . . . . . . . . .                 31
                                                              Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36

                                                              Future Developments
                                                              For the latest information about developments related to 
                                                              Pub.  554,  such  as  legislation  enacted  after  it  was 
                                                              published, go to IRS.gov/Pub554.

                                                              What's New
                                                              Standard deduction amount increased.                      For 2022, the 
                                                              standard deduction amount has been increased for all fil-
                                                              ers. The amounts are:
                                                              • Single or Married filing separately—$12,950.
                                                              • Married filing jointly or Qualifying surviving 
                                                                spouse—$25,900.
Get forms and other information faster and easier at:
• IRS.gov (English)         • IRS.gov/Korean (한국어)            • Head of household—$19,400.
• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский)       Alternative  minimum  tax  exemption  increased.                          The 
• IRS.gov/Chinese (中文)      • IRS.gov/Vietnamese (Tiếng Việt) 
                                                              AMT  exemption  amount  has  increased  to  $75,900 

Jan 31, 2023

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($118,100  if  married  filing  jointly  or  qualifying  surviving     processing of your return. It also allows your designee to 
spouse; $59,050 if married filing separately).                         perform  certain  actions.  See  your  income  tax  return  in-
Earned income credit. The maximum amount of income                     structions for details.
you  can  earn  and  still  get  the  credit  has  changed.  You       Employment  tax  withholding.    Your  wages  are  subject 
may be able to take the credit if you earn less than:                  to  withholding  for  income  tax,  social  security  tax,  and 
• $16,480 ($22,610 if married filing jointly), don't have a            Medicare tax even if you are receiving social security ben-
  qualifying child, and are at least 25 years old and un-              efits.
  der age 65;                                                          Social  security  benefits  information.   Social  security 
                                                                       beneficiaries may quickly and easily obtain various infor-
• $43,492 ($49,622 if married filing jointly), and you 
                                                                       mation  from  the  Social  Security  Administration’s  (SSA’s) 
  have one qualifying child;
                                                                       website with a my Social Security account, including get-
• $49,399 ($55,529 if married filing jointly), and you                 ting a replacement SSA 1099 or SSA 1042S. For more in-‐ ‐
  have two qualifying children; or                                     formation,  go  to SSA.gov/myaccount.  See Obtaining  so-
• $53,057 ($59,187 if married filing jointly), and you                 cial security information, later.
  have three or more qualifying children.                              Photographs  of  missing  children. The  Internal  Reve-
                                                                       nue Service is a proud partner with the National Center for 
For more information, see Earned Income Credit, later.
                                                                       Missing & Exploited Children® (NCMEC). Photographs of 
Standard mileage rate. For 2022, the standard mileage                  missing  children  selected  by  the  Center  may  appear  in 
rate  allowed  for  operating  expenses  for  a  car  when  you        this publication on pages that would otherwise be blank. 
use it for medical reasons increased to 18 cents a mile for            You can help bring these children home by looking at the 
January  1  through  June  30,  2022,  and  22  cents  a  mile         photographs  and  calling  800-THE-LOST  (800-843-5678) 
from July 1 through December 31, 2022.                                 if you recognize a child.

Reminders                                                              Introduction
Qualified  disaster  tax  relief. Special  rules  provide  for         The  purpose  of  this  publication  is  to  provide  a  general 
tax-favored withdrawals and repayments from certain re-                overview of selected topics that are of interest to older tax-
tirement plans for taxpayers who suffered economic loss                payers.  This  publication  will  help  you  determine  if  you 
as  a  result  of  a  qualified  disaster.  See  Form  8915-F,         need to file a return and, if so, what items to report on your 
Qualified Disaster Retirement Plan Distributions and Re-               return. Each topic is discussed only briefly, so you will find 
payments, for more information.                                        references  to  other  free  IRS  publications  that  provide 
Maximum  age  for  traditional  IRA  contributions.    The             more detail on these topics if you need it.
age  restriction  for  contributions  to  a  traditional  IRA  has     Table I  has a list of questions you may have about filing 
been eliminated.                                                       your federal tax return. To the right of each question is the 
Increase in age for mandatory distributions.       Individu-           location of the answer in this publication. Also, at the back 
als who reach age 70 /  on January 1, 2022, or later may 1 2           of this publication, there is an index to help you search for 
delay  distributions  until  April  1  of  the  year  following  the   the topic you need.
year in which they turn age 72.                                        While most federal income tax laws apply equally to all 
                                                                       taxpayers,  regardless  of  age,  there  are  some  provisions 
Form 1040-SR.    Form 1040-SR, U.S. Tax Return for Se-                 that give special treatment to older taxpayers. The follow-
niors, was introduced in 2019. You can use this form if you            ing are some examples.
are age 65 or older at the end of 2022. The form generally 
mirrors  Form  1040.  However,  the  Form  1040-SR  has                • Higher gross income threshold for filing. You 
larger text and some helpful tips for older taxpayers. See               must be age 65 or older at the end of the year to get 
the Instructions for Form 1040 for more information.                     this benefit. You are considered age 65 on the day be-
                                                                         fore your 65th birthday. Therefore, you are considered 
Tax return preparers. Choose your preparer carefully. If 
                                                                         age 65 at the end of the year if your 65th birthday is on 
you pay someone to prepare your return, the preparer is 
                                                                         or before January 1 of the following year.
required,  under  the  law,  to  sign  the  return  and  fill  in  the 
other blanks in the Paid Preparer Use Only area of your                • Higher standard deduction. If you don't itemize de-
return. Remember, however, that you are still responsible                ductions, you are entitled to a higher standard deduc-
for  the  accuracy  of  every  item  entered  on  your  return.  If      tion if you are age 65 or older at the end of the year. 
there is any underpayment, you are responsible for paying                You are considered age 65 at the end of the year if 
it, plus any interest and penalty that may be due.                       your 65th birthday is on or before January 1 of the fol-
                                                                         lowing year.
Third party designee. You can check the “Yes” box in 
the Third Party Designee area of your return to authorize              • Credit for the elderly or the disabled. If you qualify, 
the IRS to discuss your return with your preparer, a friend,             you may benefit from the credit for the elderly or the 
a family member, or any other person you choose. This al-                disabled. To determine if you qualify and how to figure 
lows the IRS to call the person you identified as your des-              this credit, see Credit for the Elderly or the Disabled, 
ignee to answer any questions that may arise during the                  later.

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Return preparation assistance. The IRS wants to make Although we can’t respond individually to each com-
it easier for you to file your federal tax return. You may find ment received, we do appreciate your feedback and will
it helpful to visit a Volunteer Income Tax Assistance consider your comments and suggestions as we revise
(VITA), Tax Counseling for the Elderly (TCE), or American our tax forms, instructions, and publications. Don’t send
Association of Retired Persons (AARP) Tax-Aide site near tax questions, tax returns, or payments to the above ad-
you. dress.
Volunteer Income Tax Assistance and Tax Coun- Getting answers to your tax questions. If you have
seling for the Elderly. These programs provide free a tax question not answered by this publication or the How
help for low-income taxpayers and taxpayers age 60 or To Get Tax Help section at the end of this publication, go
older to prepare and file their returns. For the VITA/TCE to the IRS Interactive Tax Assistant page at IRS.gov/
site nearest you, contact your local IRS office. For more Help/ITA where you can find topics by using the search
information, see Preparing and filing your tax return under feature or viewing the categories listed.
How To Get Tax Help.
Getting tax forms, instructions, and publications.
AARP Tax-Aide. AARP Foundation Tax-Aide offers Go to IRS.gov/Forms to download current and prior-year
free tax preparation and has more than 5,000 locations in forms, instructions, and publications.
neighborhood libraries, malls, banks, community centers,
Ordering tax forms, instructions, and publications.
and senior centers annually during the filing season. Visit
Go to IRS.gov/OrderForms to order current forms, instruc-
AARP.org/TaxAide or call 888-OUR-AARP
tions, and publications; call 800-829-3676 to order
(888-687-2277) for more information.
prior-year forms and instructions. The IRS will process
Comments and suggestions. We welcome your com- your order for forms and publications as soon as possible.
ments about this publication and suggestions for future Don’t resubmit requests you’ve already sent us. You can
editions. get forms and publications faster online.
You can send us comments through IRS.gov/
FormComments. Or, you can write to the Internal Reve-
nue Service, Tax Forms and Publications, 1111 Constitu-
tion Ave. NW, IR-6526, Washington, DC 20224.

Publication 554 (2022) Page 3

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Table I. What You Should Know About Federal Taxes
Note. The following is a list of questions you may have about filling out your federal income tax return.
To the right of each question is the location of the answer in this publication.

What I Should Know Where To Find the Answer
Do I need to file a return? See chapter 1.
Is my income taxable or nontaxable?
See chapter 2.
If it is nontaxable, must I still report it?
How do I report benefits I received from the Social
Security Administration or the Railroad Retirement Board? See Social Security and Equivalent Railroad Retirement
Benefits in chapter 2.
Are these benefits taxable?
Must I report the sale of my home?
See Sale of Home in chapter 2.
If I had a gain, is any part of it taxable?
What are some of the items that I can deduct to reduce my See chapters and .3 4
income?
How do I report the amounts I set aside for my IRA? See Individual Retirement Arrangement Contributions
and Deductions in chapter 3.
Would it be better for me to claim the standard deduction See chapter 4.
or itemize my deductions?
What are some of the credits I can claim to reduce my tax? See chapter 5 for discussions on the credit for the elderly
or the disabled, the child and dependent care credit, and
the earned income credit.
Must I make estimated tax payments? See chapter 6.
How do I contact the IRS or get more information? See chapter 7.

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                                                                    amount  shown  on  the  appropriate  line  in Table  1-1.  For 
                                                                    other filing requirements, see your tax return instructions 
1.                                                                  or Pub. 501, Dependents, Standard Deduction, and Filing 
                                                                    Information.  If  you  were  a  nonresident  alien  at  any  time 
                                                                    during the year, the filing requirements that apply to you 
2022 Filing Requirements                                            may  be  different  from  those  that  apply  to  U.S.  citizens. 
                                                                    See Pub. 519, U.S. Tax Guide for Aliens.
If income tax was withheld from your pay, or if you qualify 
for a refundable credit (such as the earned income credit,          Gross income. Gross income is all income you receive 
the additional child tax credit, or the American opportunity        in the form of money, goods, property, and services that 
credit), you should file a return to get a refund even if you       isn't exempt from tax. If you are married and live with your 
aren't otherwise required to file a return.                         spouse in a community property state, half of any income 
                                                                    defined by state law as community income may be con-
       Don't file a federal income tax return if you don't          sidered  yours.  States  with  community  property  laws  in-
TIP    meet the filing requirements and aren't due a re-            clude Arizona, California, Idaho, Louisiana, Nevada, New 
       fund.  If  you  need  assistance  to  determine  if  you     Mexico, Texas, Washington, and Wisconsin. A registered 
need  to  file  a  federal  income  tax  return  for  2022,  go  to domestic  partner  in  Nevada,  Washington,  or  California 
IRS.gov/ITA and use the Interactive Tax Assistant (ITA).            must  generally  report  half  the  combined  community  in-
                                                                    come of the individual and his or her domestic partner. For 
                                                                    more  information  about  community  property,  see  Pub. 
                                                                    555, Community Property.
General Requirements                                                For  more  information  on  what  to  include  in  gross  in-
                                                                    come, see chapter 2.
If you are a U.S. citizen or resident alien, you must file a 
return if your gross income for the year was at least the 

Table 1-1. 2022 Filing Requirements Chart for Most Taxpayers
           Note. You must file a return if your gross income was at least the amount shown in the last column.

                                            AND at the end of 2022                      THEN file a return if your 
IF your filing status is. . .               you were . . .*                             gross income  was at least. . .**

Single                                      under 65                                          $12,950
                                            65 or older                                       $14,700
Head of household                           under 65                                          $19,400
                                            65 or older                                       $21,150
Married filing jointly***                   under 65 (both spouses)                           $25,900
                                            65 or older (one spouse)                          $27,300
                                            65 or older (both spouses)                        $28,700
Married filing separately                   any age                                           $ 5
Qualifying surviving spouse                 under 65                                          $25,900
                                            65 or older                                       $27,300

* If you were born before January 2, 1958, you are considered to be age 65 or older at the end of 2022. (If your spouse 
    died in 2022 or if you are preparing a return for someone who died in 2022, see Pub. 501.)
** Gross income means all income you receive 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). It also 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. Don't include 
    any social security benefits unless (a) you are married filing separately and you lived with your spouse at any time in 
    2022, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more 
    than $25,000 ($32,000* if married filing jointly). If (a) or (b) applies, see the Instructions for Form 1040 or Pub. 915, Social 
    Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must 
    include in gross income.
*** If you didn't live with your spouse at the end of 2022 (or on the date your spouse died) and your gross income was at 
    least $5, you must file a return regardless of your age.

                                                                       Chapter 1  2022 Filing Requirements    Page 5

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Self-employed persons.   If you are self-employed in a               for both years, you must file a return for 2022 even though 
business  that  provides  services  (where  the  production,         you didn't have to file a return for 2021.
purchase, or sale of merchandise isn't an income-produc-
ing factor), gross income from that business is the gross 
receipts. If you are self-employed in a business involving 
manufacturing,  merchandising,  or  mining,  gross  income 
from  that  business  is  the  total  sales  minus  the  cost  of 
goods sold. In either case, you must add any income from 
investments and from incidental or outside operations or             2.
sources. See Pub. 334, Tax Guide for Small Business, for 
more information.
                                                                     Taxable and Nontaxable 
Dependents. If you could be claimed as a dependent by 
another taxpayer (that is, you meet the dependency tests             Income
in Pub. 501), special filing requirements apply. See Pub. 
501.                                                                 Generally,  income  is  taxable  unless  it  is  specifically  ex-
                                                                     empt (not taxed) by law. Your taxable income may include 
Decedents                                                            compensation for services, interest, dividends, rents, roy-
                                                                     alties,  income  from  partnerships,  estate  or  trust  income, 
A personal representative of a decedent's estate can be              gain  from  sales  or  exchanges  of  property,  and  business 
an executor, administrator, or anyone who is in charge of            income of all kinds.
the decedent's property.                                             Under special provisions of the law, certain items are par-
If  you  are  acting  as  the  personal  representative  of  a       tially or fully exempt from tax. Provisions that are of spe-
person who died during the year, you may have to file a              cial interest to older taxpayers are discussed in this chap-
final return for that decedent. You also have other duties,          ter.
such as notifying the IRS that you are acting as the per-
sonal  representative.  Form  56,  Notice  Concerning  Fidu-
ciary Relationship, is available for this purpose.                   Compensation for Services
When you file a return for the decedent, either as the 
                                                                     Generally,  you  must  include  in  gross  income  everything 
personal  representative  or  as  the  surviving  spouse,  you 
                                                                     you receive in payment for personal services. In addition 
should enter “DECEASED,” the decedent's name, and the 
                                                                     to  wages,  salaries,  commissions,  fees,  and  tips,  this  in-
date of death across the top of the tax return.
                                                                     cludes other forms of compensation such as fringe bene-
If  no  personal  representative  has  been  appointed  by           fits and stock options.
the due date for filing the return, the surviving spouse (on         You don’t need to receive the compensation in cash for 
a joint return) should sign the return and enter in the sig-         it  to  be  taxable.  Payments  you  receive  in  the  form  of 
nature area “Filing as surviving spouse.”                            goods or services must generally be included in gross in-
For more information, see Pub. 559, Survivors, Execu-                come at their fair market value.
tors, and Administrators.
                                                                     Volunteer  work.    Don't  include  in  your  gross  income 
Surviving  spouse. If  you  are  the  surviving  spouse,  the        amounts you receive for supportive services or reimburse-
year your spouse died is the last year for which you can             ments for out-of-pocket expenses under any of the follow-
file a joint return with that spouse. After that, if you don't       ing volunteer programs.
remarry,  you  must  file  as  a  qualifying  surviving  spouse,     •   Retired Senior Volunteer Program (RSVP).
head of household, or single. For more information about 
each of these filing statuses, see Pub. 501.                         •   Foster Grandparent Program.
If you remarry before the end of the year in which your              •   Senior Companion Program.
spouse died, a final joint return with the deceased spouse 
can't  be  filed.  You  can,  however,  file  a  joint  return  with •   Service Corps of Retired Executives (SCORE).

your new spouse. In that case, the filing status of your de-         Unemployment compensation.      You must include in in-
ceased spouse for his or her final return is married filing          come  all  unemployment  compensation  you  or  your 
separately.                                                          spouse (if married filing jointly) received.
        The level of income that requires you to file an in-
                                                                     More information.   See Pub. 525, Taxable and Nontaxa-
!       come tax return changes when your filing status              ble  Income,  for  more  detailed  information  on  specific 
CAUTION changes (see Table 1-1). Even if you and your de-
ceased spouse weren't required to file a return for several          types of income.
years, you may have to file a return for tax years after the 
year of death. For example, if your filing status changes 
from filing jointly in 2021 to single in 2022 because of the 
death of your spouse, and your gross income is $17,500 

Page 6    Chapter 2  Taxable and Nontaxable Income

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Coronavirus-related distribution. A coronavirus-rela-
ted distribution is any distribution from an eligible retire-
Retirement Plan Distributions ment plan that meets the following requirements.
This section summarizes the tax treatment of amounts 1. The distribution was made after December 31, 2019,
you receive from traditional individual retirement arrange- and before December 31, 2020.
ments (IRAs), employee pensions or annuities, and disa-
2. The distribution was made to an individual that was
bility pensions or annuities. A traditional IRA is any IRA
diagnosed with either SARS-CoV-2 or coronavirus
that isn't a Roth or SIMPLE IRA. A Roth IRA is an individ-
disease 2019 (COVID-19) by the Centers for Disease
ual retirement plan that can be either an account or an an-
Control and Prevention (CDCP), or whose spouse or
nuity and features nondeductible contributions and
dependent was diagnosed with SARS-CoV-2 or
tax-free distributions. A SIMPLE IRA is a tax-favored re-
COVID-19 by the CDCP.
tirement plan that certain small employers (including
self-employed individuals) can set up for the benefit of 3. The individual, the individual’s spouse, or a member
their employees. More detailed information can be found of the individual’s household (as defined below) expe-
in Pub. 590-A, Contributions to Individual Retirement Ar- rienced adverse financial consequences as a result of
rangements; Pub. 590-B, Distributions from Individual Re- being quarantined, furloughed, laid off, or had work
tirement Arrangements; and Pub. 575, Pension and Annu- hours reduced or a reduction in pay (or self-employ-
ity Income. ment income) due to coronavirus, was unable to work
due to lack of childcare resulting from coronavirus,
Individual Retirement Arrangements closed or reduced hours of a business owned or oper-
ated by the individual, or had a job offer rescinded or
(IRAs) start date delayed (including for a spouse or member
of the household) due to coronavirus.
In general, distributions from a traditional IRA are taxable
in the year you receive them. Exceptions to the general For purposes of applying the factors in (3) above, a
rule are rollovers, tax-free withdrawals of contributions, member of the individual’s household is someone who
and the return of nondeductible contributions. These are shares the individual’s principal residence. See Pub. 575
discussed in Pub. 590-B. and Form 8915-F and its instructions for more information.

If you made nondeductible contributions to a tra- IRA distributions as income. If the distribution meets
TIP ditional IRA, you must file Form 8606, Nondeduc- the “coronavirus-related distribution” definition, you can
tible IRAs. If you don't file Form 8606 with your re- elect to include the taxable amounts as income ratably
turn, you may have to pay a $50 penalty. Also, when you over 3 years and recontribute the amount of the distribu-
receive distributions from your traditional IRA, the tion to an eligible retirement plan within 3 years.
amounts will be taxed unless you can show, with satisfac-
tory evidence, that nondeductible contributions were After age 59 / . 1 2 After you reach age 59 / , you can re-1 2
made. ceive distributions from your traditional IRA without having
to pay the 10% additional tax.
Early distributions. Generally, early distributions are
amounts distributed from your traditional IRA account or Required Distributions
annuity before you are age 59 / , or amounts you receive 1 2
when you cash in retirement bonds before you are age General required minimum distribution rule. If you
59 / . You must include early distributions of taxable 1 2 are the owner of a traditional IRA, you must generally re-
amounts in your gross income. These taxable amounts ceive the entire balance in your IRA or start receiving peri-
are also subject to an additional 10% tax unless the distri- odic distributions from your IRA by April 1 of the year fol-
bution qualifies for an exception. For purposes of the addi- lowing the year in which you reach age 72 (70 / for those 1 2
tional 10% tax, an IRA is a qualified retirement plan. For individuals who reach age 70 / before January 1, 2021). 1 2
more information about this tax, see Tax on Early Distribu- See When Must You Withdraw Assets? (Required Mini-
tions under Pensions and Annuities, later. mum Distributions) in Pub. 590-B. If distributions from
your traditional IRA(s) are less than the required minimum
Tax benefits of a coronavirus-related distribution. If distribution for the year, you may have to pay a 50% ex-
a distribution meets the requirements to be a “coronavi- cise tax for that year on the amount not distributed as re-
rus-related distribution” (defined below), you can elect to quired. For purposes of the 50% excise tax, an IRA is a
include the taxable amounts as income ratably over 3 qualified retirement plan. For more information about this
years and recontribute the amount of the distribution to an tax, see Tax on Excess Accumulation under Pensions and
eligible retirement plan within 3 years. Such distributions Annuities, later. See also Excess Accumulations (Insuffi-
are also not subject to the 10% additional tax on distribu- cient Distributions) in Pub. 590-B.
tions that generally applies before age 59 / . For more in-1 2
formation concerning the reporting of the distribution and
the ability to recontribute the distribution, see Form
8915-F and its instructions.

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Pensions and Annuities From this total cost, subtract any refunded premiums,
rebates, dividends, unrepaid loans, or other tax-free
Generally, if you didn't pay any part of the cost of your em- amounts you received by the later of the annuity starting
ployee pension or annuity, and your employer didn't with- date or the date on which you received your first payment.
hold part of the cost of the contract from your pay while Annuity starting date. The annuity starting date is the
you worked, the amounts you receive each year are fully later of the first day of the first period for which you re-
taxable. However, see Insurance Premiums for Retired ceived a payment from the plan or the date on which the
Public Safety Officers, later. plan's obligations became fixed.
If you paid part of the cost of your pension or annuity The amount of your contributions to the plan may
plan (see Cost, later), you can exclude part of each annu- TIP be shown in box 9b of any Form 1099-R, Distribu-
ity payment from income as a recovery of your cost (in- tions From Pensions, Annuities, Retirement or
vestment in the contract). This tax-free part of the pay- Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that
ment is figured when your annuity starts and remains the you receive.
same each year, even if the amount of the payment
changes. The rest of each payment is taxable. However, Foreign employment contributions. If you worked
see Insurance Premiums for Retired Public Safety Offi- abroad, certain amounts your employer paid into your re-
cers, later. tirement plan that weren't includible in your gross income
may be considered part of your cost. For details, see For-
You figure the tax-free part of the payment using one of eign employment contributions in Pub. 575.
the following methods.
• Simplified Method. You must generally use this Withholding. The payer of your pension, profit-sharing,
method if your annuity is paid under a qualified plan (a stock bonus, annuity, or deferred compensation plan will
qualified employee plan, a qualified employee annuity, withhold income tax on the taxable part of amounts paid to
or a tax-sheltered annuity plan or contract). You can't you. However, you can choose not to have tax withheld on
use this method if your annuity is paid under a non- the payments you receive, unless they are eligible rollover
qualified plan. distributions. (These are distributions that are eligible for
rollover treatment but aren't paid directly to another quali-
• General Rule. You must use this method if your an- fied retirement plan or to a traditional IRA.) See Withhold-
nuity is paid under a nonqualified plan. You generally ing Tax and Estimated Tax and Rollovers in Pub. 575 for
can't use this method if your annuity is paid under a more information.
qualified plan. For payments other than eligible rollover distributions,
Contact your employer or plan administrator to you can tell the payer how much to withhold by filing a
TIP find out if your pension or annuity is paid under a Form W-4P, Withholding Certificate for Periodic Pension
qualified or nonqualified plan. or Annuity Payments.

Simplified Method. Under the Simplified Method, you
You determine which method to use when you first be-
figure the tax-free part of each annuity payment by divid-
gin receiving your annuity, and you continue using it each
ing your cost by the total number of anticipated monthly
year that you recover part of your cost.
payments. For an annuity that is payable over the lives of
Exclusion limit. If your annuity starting date is after the annuitants, this number is based on the annuitants'
1986, the total amount of annuity income you can exclude ages on the annuity starting date and is determined from a
over the years as a recovery of the cost can't exceed your table. For any other annuity, this number is the number of
net cost (figured without any reduction for a refund fea- monthly annuity payments under the contract.
ture). Any unrecovered cost at your (or the last annui- Who must use the Simplified Method. You must
tant's) death is allowed as an “other itemized deduction” use the Simplified Method if your annuity starting date is
on the final return of the decedent. after November 18, 1996, and you meet both of the follow-
If you contributed to your pension or annuity and your ing conditions.
annuity starting date is before 1987, you can continue to
take your monthly exclusion for as long as you receive 1. You receive your pension or annuity payments from a
your annuity. If you chose a joint and survivor annuity, qualified plan.
your survivor can continue to take the survivor's exclusion 2. On your annuity starting date, at least one of the fol-
figured as of the annuity starting date. The total exclusion lowing conditions applies to you.
may be more than your cost.
a. You are under age 75.
Cost. Before you can figure how much, if any, of your
b. You are entitled to less than 5 years of guaranteed
pension or annuity benefits are taxable, you must deter-
payments.
mine your cost in the plan (your investment in the con-
tract). Your total cost in the plan includes everything that If your annuity starting date is after July 1, 1986, and
you paid. It also includes amounts your employer contrib- before November 19, 1996, and you previously chose to
uted that were taxable to you when paid. However, see use the Simplified Method, you must continue to use it
Foreign employment contributions, later. each year that you recover part of your cost. You could

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have chosen to use the Simplified Method if your annuity temporary annuity payable to the annuitant's child under
is payable for your life (or the lives of you and your survi- age 25.
vor annuitant) and you met both of the conditions listed
You don't need to complete line 3 of the work-
above.
TIP sheet or make the computation on line 4 if you re-
Guaranteed payments. Your annuity contract pro- ceived annuity payments last year and used last
vides guaranteed payments if a minimum number of pay- year's worksheet to figure your taxable annuity. Instead,
ments or a minimum amount (for example, the amount of enter the amount from line 4 of last year's worksheet on
your investment) is payable even if you and any survivor line 4 of this year's worksheet.
annuitant don't live to receive the minimum. If the mini-
mum amount is less than the total amount of the pay- Single-life annuity. If your annuity is payable for your
ments you are to receive, barring death, during the first 5 life alone, use Table 1 at the bottom of the worksheet to
years after payments begin (figured by ignoring any pay- determine the total number of expected monthly pay-
ment increases), you are entitled to less than 5 years of ments. Enter on line 3 the number shown for your age on
guaranteed payments. your annuity starting date. This number will differ depend-
ing on whether your annuity starting date is before No-
Who can't use the Simplified Method. You can't use vember 19, 1996, or after November 18, 1996.
the Simplified Method and must use the General Rule if
you receive pension or annuity payments from: Multiple-lives annuity. If your annuity is payable for
the lives of more than one annuitant, use Table 2 at the
• A nonqualified plan, such as a private annuity, a pur-
bottom of the worksheet to determine the total number of
chased commercial annuity, or a nonqualified em-
expected monthly payments. Enter on line 3 the number
ployee plan; or shown for the annuitants' combined ages on the annuity
• A qualified plan if you are age 75 or older on your an- starting date. For an annuity payable to you as the primary
nuity starting date and you are entitled to at least 5 annuitant and to more than one survivor annuitant, com-
years of guaranteed payments (defined above). bine your age and the age of the youngest survivor annui-
In addition, you had to use the General Rule for either tant. For an annuity that has no primary annuitant and is
circumstance described above if your annuity starting payable to you and others as survivor annuitants, combine
date is after July 1, 1986, and before November 19, 1996. the ages of the oldest and youngest annuitants. Don't treat
You also had to use it for any fixed-period annuity. If you as a survivor annuitant anyone whose entitlement to pay-
didn't have to use the General Rule, you could have ments depends on an event other than the primary annui-
chosen to use it. You also had to use the General Rule for tant's death.
payments from a qualified plan if your annuity starting However, if your annuity starting date is before 1998,
date is before July 2, 1986, and you didn't qualify to use don't use Table 2 and don't combine the annuitants' ages.
the Three-Year Rule. Instead, you must use Table 1 at the bottom of the work-
If you had to use the General Rule (or chose to use it), sheet and enter on line 3 the number shown for the pri-
you must continue to use it each year that you recover mary annuitant's age on the annuity starting date. This
your cost. number will differ depending on whether your annuity
Unless your annuity starting date was before 1987, starting date is before November 19, 1996, or after No-
once you have recovered all of your nontaxable invest- vember 18, 1996.
ment, all of each remaining payment you receive is fully Fixed-period annuities. If your annuity doesn't de-
taxable. Once your remaining payments are fully taxable, pend in whole or in part on anyone's life expectancy, the
there is no longer a concern with the General Rule or Sim- total number of expected monthly payments to enter on
plified Method. line 3 of the worksheet is the number of monthly annuity
Complete information on the General Rule, including payments under the contract.
the actuarial tables you need, is contained in Pub. 939,
General Rule for Pensions and Annuities. Line 6. The amount on line 6 should include all
amounts that could have been recovered in prior years. If
How to use the Simplified Method. Complete the you didn't recover an amount in a prior year, you may be
Simplified Method Worksheet in the Instructions for Form able to amend your returns for the affected years.
1040 or Instructions for Form 1040-NR, or in Pub. 575 to
figure your taxable annuity for 2022. Be sure to keep the Be sure to keep a copy of the completed work-
completed worksheet; it will help you figure your taxable TIP sheet; it will help you figure your taxable annuity in
annuity next year. later years.
To complete line 3 of the worksheet, you must deter-
mine the total number of expected monthly payments for Example. Jean Smith, age 65, began receiving retire-
your annuity. How you do this depends on whether the an- ment benefits in 2022, under a joint and survivor annuity.
nuity is for a single life, multiple lives, or a fixed period. For Jean's annuity starting date is January 1, 2022. The bene-
this purpose, treat an annuity that is payable over the life fits are to be paid over the joint lives of Jean and their
of an annuitant as payable for that annuitant's life even if spouse, Courtney, age 65. Jean had contributed $31,000
the annuity has a fixed-period feature or also provides a to a qualified plan and had received no distributions be-
fore the annuity starting date. Jean is to receive a

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retirement benefit of $1,200 a month, and Courtney is to Nonperiodic Distributions
receive a monthly survivor benefit of $600 upon Jean's
death. If you receive a nonperiodic distribution from your retire-
Jean must use the Simplified Method to figure their tax- ment plan, you may be able to exclude all or part of it from
able annuity because the payments are from a qualified your income as a recovery of your cost. Nonperiodic distri-
plan and they are under age 75. You can find a blank ver- butions include cash withdrawals, distributions of current
sion of this worksheet in Pub. 575. earnings (dividends) on your investment, and certain
loans. For information on how to figure the taxable amount
Survivors of retirees. Benefits paid to you as a survivor of a nonperiodic distribution, see Taxation of Nonperiodic
under a joint and survivor annuity must be included in your Payments in Pub. 575.
gross income in the same way the retiree would have in-
The taxable part of a nonperiodic distribution may
cluded them in gross income.
be subject to an additional 10% tax. See Tax on
If you receive a survivor annuity because of the death CAUTION!
Early Distributions, later.
of a retiree who had reported the annuity under the
Three-Year Rule, include the total received in your in-
come. The retiree's cost has already been recovered tax Lump-sum distributions. If you receive a lump-sum dis-
free. tribution from a qualified employee plan or qualified em-
If the retiree was reporting the annuity payments under ployee annuity and the plan participant was born before
the General Rule, you must apply the same exclusion per- January 2, 1936, you may be able to elect optional meth-
centage the retiree used to your initial payment called for ods of figuring the tax on the distribution. The part from
in the contract. The resulting tax-free amount will then re- active participation in the plan before 1974 may qualify as
main fixed. Any increases in the survivor annuity are fully capital gain subject to a 20% tax rate. The part from par-
taxable. ticipation after 1973 (and any part from participation be-
If the retiree was reporting the annuity payments under fore 1974 that you don't report as capital gain) is ordinary
the Simplified Method, the part of each payment that is tax income. You may be able to use the 10-year tax option
free is the same as the tax-free amount figured by the re- (explained in Pub. 575) to figure tax on the ordinary in-
tiree at the annuity starting date. See Simplified Method, come part.
earlier. Form 1099-R. If you receive a total distribution from a
plan, you should receive a Form 1099-R. If the distribution
How to report. If you file Form 1040, 1040-SR, or
qualifies as a lump-sum distribution, box 3 shows the cap-
1040-NR, report your total annuity on line 5a, and the tax-
ital gain part of the distribution. The amount in box 2a,
able part on line 5b. If your pension or annuity is fully taxa-
Taxable amount, minus the amount in box 3, Capital gain,
ble, enter it on line 5b. Don't make an entry on line 5a.
is the ordinary income part.
Example. You are a Form 1040 or 1040-SR filer and More information. For more detailed information on
you received monthly payments totaling $1,200 (12 lump-sum distributions, see Pub. 575 or Form 4972, Tax
months x $100) during 2022 from a pension plan that was on Lump-Sum Distributions.
completely financed by your employer. You had paid no
tax on the payments that your employer made to the plan,
Tax on Early Distributions
and the payments weren't used to pay for accident,
health, or long-term care insurance premiums (as dis- Most distributions you receive from your qualified retire-
cussed later under Insurance Premiums for Retired Public ment plan and nonqualified annuity contracts before you
Safety Officers). The entire $1,200 is taxable. You include reach age 59 / are subject to an additional tax of 10%. 1 2
$1,200 only on Form 1040 or 1040-SR, line 5b. The tax applies to the taxable part of the distribution.
Joint return. If you file a joint return and you and your
For this purpose, a qualified retirement plan is:
spouse each receive one or more pensions or annuities,
report the total of the pensions and annuities on line 5a of • A qualified employee plan (including a qualified cash
Form 1040, 1040-SR, or 1040-NR. Report the total of the or deferred arrangement (CODA) under Internal Reve-
taxable parts on line 5b of Form 1040, 1040-SR, or nue Code section 401(k)),
1040-NR. • A qualified employee annuity plan,
Form 1099-R. You should receive a Form 1099-R for • A tax-sheltered annuity plan (section 403(b) plan),
your pension or annuity. Form 1099-R shows your pen-
sion or annuity for the year and any income tax withheld. • An eligible state or local government section 457 de-
You should receive a Form W-2, Wage and Tax State- ferred compensation plan (to the extent that any distri-
ment, if you receive distributions from certain nonqualified bution is attributable to amounts the plan received in a
plans. direct transfer or rollover from one of the other plans
listed here or an IRA), or
You must attach Forms 1099-R or Forms W-2 to
• An IRA.
! your 2022 tax return if federal income tax was
CAUTION withheld. Generally, you should be sent these
forms by January 31, 2023.

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You may have to pay a 25%, rather than a 10%, • An IRA.
! additional tax if you receive distributions from a An excess accumulation is the undistributed re-
CAUTION SIMPLE IRA before you are age 59 / . See Pub. 1 2
TIP mainder of the required minimum distribution that
560, Retirement Plans for Small Business (SEP, SIMPLE,
was left in your qualified retirement plan.
and Qualified Plans).
5% owners. If you are a 5% owner, see Pub. 575 for
General exceptions to tax. The early distribution tax
more information on distribution dates.
doesn't apply to any distributions that are:
• Made as part of a series of substantially equal periodic Amount of tax. If you don't receive the required mini-
payments (made at least annually) for your life (or life mum distribution, you are subject to an additional tax. The
expectancy) or the joint lives (or joint life expectan- tax equals 50% of the difference between the amount that
cies) of you and your designated beneficiary (if from a must be distributed and the amount that was distributed
qualified retirement plan, the payments must begin af- during the tax year. You can get this excise tax excused if
ter separation from service); you establish that the shortfall in distributions was due to
reasonable error and that you are taking reasonable steps
• Made because you are totally and permanently disa- to remedy the shortfall.
bled;
• Made on or after the death of the plan participant or Form 5329. You must file a Form 5329 if you owe a tax
contract holder. because you didn't receive a minimum required distribu-
tion from your qualified retirement plan.
Reporting tax. If you owe the tax on early distributions,
you must generally attach Form 5329, Additional Taxes on Additional information. For more detailed information
Qualified Plans (Including IRAs) and Other Tax-Favored on the tax on excess accumulation, see Pub. 575.
Accounts, to your 2022 income tax return. If you don’t
have to file a 2022 income tax return, you may file Form Insurance Premiums for Retired Public
5329 by itself. See the Instructions for Form 5329. In addi- Safety Officers
tion, you don’t have to attach Form 5329 to your income
tax return if distribution code 1 (early distribution, no If you are an eligible retired public safety officer (law en-
known exception) is correctly shown in box 7 of all your forcement officer, firefighter, chaplain, or member of a res-
Forms 1099-R, and you owe the additional tax on each cue squad or ambulance crew), you can elect to exclude
Form 1099-R. Instead, multiply the taxable part of the from income distributions made from your eligible retire-
early distribution by 10% (0.10) and enter the result on ment plan that are used to pay the premiums for accident
Schedule 2 (Form 1040), line 8. See the instructions for or health insurance or long-term care insurance. The pre-
Schedule 2 (Form 1040), line 8, for more information miums can be for coverage for you, your spouse, or de-
about reporting the early distribution tax. pendent(s). The distribution must be made directly from
the plan to the insurance provider. You can exclude from
Tax on Excess Accumulation income the smaller of the amount of the insurance premi-
ums or $3,000. You can only make this election for
amounts that would otherwise be included in your income.
To make sure that most of your retirement benefits are
The amount excluded from your income can't be used to
paid to you during your lifetime, rather than to your benefi-
claim a medical expense deduction.
ciaries after your death, the payments that you receive
from qualified retirement plans must begin no later than An eligible retirement plan is a governmental plan that
your required beginning date. Unless the rule for 5% own- is a:
ers applies, this is generally April 1 of the year that follows
the later of: • Qualified trust,
• The calendar year in which you reach age 70 / , or1 2 • Section 403(a) plan,
• The calendar year in which you retire from employ- • Section 403(b) annuity, or
ment with the employer maintaining the plan. • Section 457(b) plan.
However, your plan may require you to begin to receive
payments by April 1 of the year that follows the year in If you make this election, reduce the otherwise taxable
which you reach age 70 / , even if you haven't retired.1 2 amount of your pension or annuity by the amount exclu-
ded. The taxable amount shown in box 2a of any Form
For this purpose, a qualified retirement plan includes: 1099-R that you receive doesn't reflect the exclusion. Re-
port your total distributions on Form 1040, 1040-SR, or
• A qualified employee plan, 1040-NR, line 5a. Report the taxable amount on Form
• A qualified employee annuity plan, 1040, 1040-SR, or 1040-NR, line 5b. Enter “PSO” next to
the appropriate line on which you report the taxable
• An eligible section 457 deferred compensation plan, amount.
• A tax-sheltered annuity plan (section 403(b) plan) (for
benefits accruing after 1986), or

Chapter 2 Taxable and Nontaxable Income Page 11

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Railroad Retirement Benefits (Form SSA-1042S or Form RRB-1042S if you are a non-
resident alien) showing the amount of the benefits.
Benefits paid under the Railroad Retirement Act fall into
two categories. These categories are treated differently
Social Security Information
for income tax purposes.
Obtaining social security information. Social security
Social security equivalent benefits. The first category
beneficiaries may quickly and easily obtain various infor-
is the amount of tier 1 railroad retirement benefits that
mation from the SSA's website with a my Social Security
equals the social security benefit that a railroad employee
account to:
or beneficiary would have been entitled to receive under
the social security system. This part of the tier 1 benefit is • Keep track of your earnings and verify them every
the social security equivalent benefit (SSEB) and is trea- year,
ted for tax purposes like social security benefits. (See So- • Get an estimate of your future benefits if you are still
cial Security and Equivalent Railroad Retirement Benefits, working,
later.)
• Get a letter with proof of your benefits if you currently
Non-social security equivalent benefits. The second receive them,
category contains the rest of the tier 1 benefits, called the Change your address,
•
non-social security equivalent benefit (NSSEB). It also
contains any tier 2 benefit, vested dual benefit (VDB), and • Start or change your direct deposit,
supplemental annuity benefit. This category of benefits is • Get a replacement Medicare card, and
treated as an amount received from a qualified employee
plan. This allows for the tax-free (nontaxable) recovery of • Get a replacement SSA-1099 or SSA-1042S for the
employee contributions from the tier 2 benefits and the tax season.
NSSEB part of the tier 1 benefits. VDBs and supplemental For more information and to set up an account, go to
annuity benefits are non-contributory pensions and are SSA.gov/myaccount.
fully taxable.
More information. For more information about railroad Are Any of Your Benefits Taxable?

retirement benefits, see Pub. 575. Note. When the term “benefits” is used in this section,
it applies to both social security benefits and the SSEB
Military Retirement Pay portion of tier 1 railroad retirement benefits.

Military retirement pay based on age or length of service To find out whether any of your benefits may be taxa-
is taxable and must be included in income as a pension ble, compare the base amount for your filing status (ex-
on Form 1040, 1040-SR, or 1040-NR, lines 5a and 5b. plained later) with the total of:
But, certain military and government disability pensions
that are based on a percentage of disability from active • One-half of your benefits; plus
service in the U.S. Armed Forces of any country generally • All your other income, including tax-exempt interest.
aren't taxable. For more information, including information
about veterans' benefits and insurance, see Pub. 525. When making this comparison, don't reduce your other
income by any exclusions for:
• Interest from qualified U.S. savings bonds,
Social Security and Equivalent • Employer-provided adoption benefits,
Railroad Retirement Benefits • Foreign earned income or foreign housing, or
• Income earned in American Samoa or Puerto Rico by
This discussion explains the federal income tax rules for bona fide residents.
social security benefits and equivalent tier 1 railroad retire-
ment benefits. Figuring total income. To figure the total of one-half of
your benefits plus your other income, use Worksheet 2-B.
Social security benefits include monthly retirement, sur-
If that total amount is more than your base amount, part of
vivor, and disability benefits. They don't include supple-
your benefits may be taxable.
mental security income (SSI) payments, which aren't taxa-
ble. If you are married and file a joint return for 2022, you
Equivalent tier 1 railroad retirement benefits are the and your spouse must combine your incomes and your
part of tier 1 benefits that a railroad employee or benefi- benefits to figure whether any of your combined benefits
ciary would have been entitled to receive under the social are taxable. Even if your spouse didn't receive any bene-
security system. They are commonly called the social se- fits, you must add your spouse's income to yours to figure
curity equivalent benefit (SSEB) portion of tier 1 benefits. whether any of your benefits are taxable.
If you received these benefits during 2022, you should
have received a Form SSA-1099 or Form RRB-1099

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Worksheet 2-B. A Quick Way To Check if Your Benefits May 
Be Taxable                                                                                    Keep for Your Records
A. Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include 
   the full amount of any lump-sum benefit payments received in 2022, for 2022 and 
   earlier years. (If you received more than one form, combine the amounts from box 5 
   and enter the total.)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   A.   
   Note. If the amount on line A is zero or less, stop here; none of your benefits are 
   taxable this year.
B. Enter one-half of the amount on line A  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                B.   
C. Enter your taxable pensions, wages, interest, dividends, and other taxable income . . . . . . . .                                                C.   
D. Enter any tax-exempt interest income (such as interest on municipal bonds) plus any 
   exclusions from income for:
   • Interest from qualified U.S. savings bonds,
   • Employer-provided adoption benefits,
   • Foreign earned income or foreign housing, or
   • Income earned in American Samoa or Puerto Rico by bona fide residents . . . . . . . . . . . . . .                                               D.  
E. Add lines B, C, and D and enter the total  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    E.  
F. If you are:
   • Married filing jointly, enter $32,000;
   • Single, head of household, qualifying surviving spouse, or married filing separately and 
   you 
    lived apart from your spouse for all of 2022, enter $25,000; or
   • Married filing separately and you lived with your spouse at any time during 2022,
    enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F.  
G. Is the amount on line F less than or equal to the amount on line E?
          No.  None of your benefits are taxable this year.
          Yes. Some of your benefits may be taxable. To figure how much of your benefits 
          are taxable, see Which worksheet to use under How Much Is Taxable.

    If the only income you received during 2022 was                   Your  gross  benefits  are  shown  in  box  3  of  Form 
TIP your social security or the SSEB portion of tier 1               SSA-1099  or  Form  RRB-1099.  Your  repayments  are 
    railroad  retirement  benefits,  your  benefits  gener-          shown in box 4. The amount in box 5 shows your net ben-
ally aren't taxable and you probably don't have to file a re-        efits  for  2022  (box  3  minus  box  4).  Use  the  amount  in 
turn. If you have income in addition to your benefits, you           box 5 to figure whether any of your benefits are taxable.
may have to file a return even if none of your benefits are 
taxable.                                                             Tax Withholding and Estimated Tax

                                                                     You can choose to have federal income tax withheld from 
Base Amount                                                          your social security and/or the SSEB portion of your tier 1 
                                                                     railroad retirement benefits. If you choose to do this, you 
Your base amount is:                                                 must complete a Form W-4V, Voluntary Withholding Re-
•  $25,000 if you are single, head of household, or quali-           quest.
   fying surviving spouse;
                                                                      If  you  don't  choose  to  have  income  tax  withheld,  you 
•  $25,000 if you are married filing separately and lived            may have to request additional withholding from other in-
   apart from your spouse for all of 2022;                           come,  or  pay  estimated  tax  during  the  year.  For  details, 
•  $32,000 if you are married filing jointly; or                     see Pub. 505, Tax Withholding and Estimated Tax, or the 
                                                                     Instructions for Form 1040-ES, Estimated Tax for Individu-
•  $0 if you are married filing separately and lived with 
                                                                     als.
   your spouse at any time during 2022.

Repayment of Benefits                                                How Much Is Taxable?

Any repayment of benefits you made during 2022 must be               If part of your benefits is taxable, how much is taxable de-
subtracted from the gross benefits you received in 2022. It          pends on the total amount of your benefits and other in-
doesn't  matter  whether  the  repayment  was  for  a  benefit       come. Generally, the higher that total amount, the greater 
you  received  in  2022  or  in  an  earlier  year.  If  you  repaid the taxable part of your benefits.
more  than  the  gross  benefits  you  received  in  2022,  see 
Repayments More Than Gross Benefits, later.

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Maximum taxable part. The taxable part of your bene- or Form RRB-1042S) in the appropriate column of Sched-
fits usually can't be more than 50%. However, up to 85% ule NEC (Form 1040-NR), line 8.
of your benefits can be taxable if either of the following sit-
uations applies to you. Benefits not taxable. Report your net benefits (the
amount in box 5 of your Form SSA-1099 or Form
• The total of one-half of your benefits and all your other RRB-1099) on Form 1040 or 1040-SR, line 6a. Enter -0-
income is more than $34,000 ($44,000 if you are mar- on Form 1040 or 1040-SR, line 6b. If you are married filing
ried filing jointly). separately and you lived apart from your spouse for all of
• You are married filing separately and lived with your 2022, also enter “D” to the right of the word “benefits” on
spouse at any time during 2022. Form 1040 or 1040-SR, line 6a.
If you are a nonresident alien, 85% of your benefits are
taxable. However, this income is exempt under some tax Lump-Sum Election
treaties.
You must include the taxable part of a lump-sum (retroac-
Which worksheet to use. A worksheet to figure your tive) payment of benefits received in 2022 in your 2022 in-
taxable benefits is in the Instructions for Form 1040. How- come, even if the payment includes benefits for an earlier
ever, you will need to use a different worksheet(s) if any of year.
the following situations applies to you.
This type of lump-sum benefit payment shouldn't
1. You contributed to a traditional IRA and you or your TIP be confused with the lump-sum death benefit that
spouse were covered by a retirement plan at work. In both the SSA and Railroad Retirement Board
this situation, you must use the special worksheets in (RRB) pay to many of their beneficiaries. No part of the
Pub. 590-A to figure both your IRA deduction and lump-sum death benefit is subject to tax. For more infor-
your taxable benefits. mation about the lump-sum death benefit, visit the SSA
website at SSA.gov, and use keyword: “death benefit.”
2. Situation (1) doesn't apply and you take one or more
of the following exclusions.
Generally, you use your 2022 income to figure the taxa-
• Interest from qualified U.S. savings bonds (Form ble part of the total benefits received in 2022. However,
8815, Exclusion of Interests From Series EE and I you may be able to figure the taxable part of a lump-sum
U.S. Savings Bonds Issued After 1989). payment for an earlier year separately, using your income
• Employer-provided adoption benefits (Form 8839, for the earlier year. You can elect this method if it lowers
Qualified Adoption Expenses). your taxable benefits. See Pub. 915 for more information.
• Foreign earned income or housing (Form 2555,
Foreign Earned Income). Repayments More Than Gross
Benefits
• Income earned in American Samoa (Form 4563,
Exclusion of Income for Bona Fide Residents of
In some situations, your Form SSA-1099 or Form
American Samoa) or Puerto Rico by bona fide
RRB-1099 will show that the total benefits you repaid
residents.
(box 4) are more than the gross benefits (box 3) you re-
In these situations, you must use Worksheet 1 in
ceived. If this occurred, your net benefits in box 5 will be a
Pub. 915, Social Security and Equivalent Railroad Re-
negative figure (a figure in parentheses) and none of your
tirement Benefits, to figure your taxable benefits.
benefits will be taxable. If you receive more than one form,
3. You received a lump-sum payment for an earlier year. a negative figure in box 5 of one form is used to offset a
In this situation, also complete Worksheet 2 or 3 and positive figure in box 5 of another form for that same year.
Worksheet 4 in Pub. 915. See Lump-Sum Election,
later. If you have any questions about this negative figure,
contact your local SSA office or your local U.S. RRB field
office.
How To Report Your Benefits
Joint return. If you and your spouse file a joint return,
If part of your benefits is taxable, you must use Form and your Form SSA-1099 or RRB-1099 has a negative
1040, 1040-SR, or 1040-NR. figure in box 5 but your spouse's doesn't, subtract the
box 5 amount on your form from the box 5 amount on your
Reporting on Form 1040 or 1040-SR. Report your net
spouse's form. You do this to get your net benefits when
benefits (the amount in box 5 of your Form SSA-1099 or
figuring if your combined benefits are taxable.
Form RRB-1099) on line 6a and the taxable part on
line 6b. If you are married filing separately and you lived Repayment of benefits received in an earlier year. If
apart from your spouse for all of 2022, also enter “D” to the total amount shown in box 5 of all of your Forms
the right of the word “benefits” on line 6a. SSA-1099 and RRB-1099 is a negative figure, you may be
able to take an itemized deduction for the part of this neg-
Reporting on Form 1040-NR. Report 85% of the total
ative figure that represents benefits you included in gross
amount of your benefits (box 5 of your Form SSA-1042S
income in an earlier year.

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The deduction must be more than $3,000 and you have payments as a disability pension. The payments must be
to follow some special instructions. See Pub. 915 for reported as a pension or annuity.
those instructions.
Accrued leave payment. If you retire on disability, any
lump-sum payment you receive for accrued annual leave
is a salary payment. The payment isn't a disability pay-
Sickness and Injury Benefits ment. Include it in your income in the tax year you receive
it.
Generally, you must report as income any amount you re-
ceive for personal injury or sickness through an accident
or health plan that is paid for by your employer. If both you Long-Term Care Insurance Contracts
and your employer pay for the plan, only the amount you
In most cases, long-term care insurance contracts are
receive that is due to your employer's payments is repor-
treated as accident and health insurance contracts.
ted as income. However, certain payments may not be
Amounts you receive from them (other than policyholder
taxable to you. Some of these payments are discussed
dividends or premium refunds) are generally excludable
later in this section. Also, see Military and Government
from income as amounts received for personal injury or
Disability Pensions and Other Sickness and Injury Bene-
sickness. However, the amount you can exclude may be
fits in Pub. 525.
limited. Long-term care insurance contracts are discussed
Cost paid by you. If you pay the entire cost of an acci- in more detail in Pub. 525.
dent or health plan, don't include any amounts you receive
from the plan for personal injury or sickness as income on Workers' Compensation
your tax return. If your plan reimbursed you for medical
expenses you deducted in an earlier year, you may have Amounts you receive as workers' compensation for an oc-
to include some, or all, of the reimbursement in your in- cupational sickness or injury are fully exempt from tax if
come. they are paid under a workers' compensation act or a stat-
ute in the nature of a workers' compensation act. The ex-
emption also applies to your survivors. The exemption,
Disability Pensions
however, doesn't apply to retirement plan benefits you re-
If you retired on disability, you must include in income any ceive based on your age, length of service, or prior contri-
disability pension you receive under a plan that is paid for butions to the plan, even if you retired because of an oc-
by your employer. You must report your taxable disability cupational sickness or injury.
payments as wages on Form 1040, 1040-SR, or If part of your workers' compensation reduces
1040-NR, line 1a, until you reach minimum retirement ! your social security or equivalent railroad retire-
age. Minimum retirement age is generally the age at CAUTION ment benefits, that part is considered social se-
which you can first receive a pension or annuity if you curity (or equivalent railroad retirement) benefits and may
aren't disabled. be taxable. For a discussion of the taxability of these ben-
If you were age 65 or older by the end of 2022 or efits, see Social Security and Equivalent Railroad Retire-
TIP you were retired on permanent and total disability ment Benefits, earlier.
and received taxable disability income, you may
be able to claim the credit for the elderly or the disabled. Return to work. If you return to work after qualifying for
See Credit for the Elderly or the Disabled, later. For more workers' compensation, salary payments you receive for
information on this credit, see Pub. 524, Credit for the Eld- performing light duties are taxable as wages.
erly or the Disabled.
Other Sickness and Injury Benefits
Beginning on the day after you reach minimum retire-
ment age, payments you receive are taxable as a pension In addition to disability pensions and annuities, you may
or annuity. Report the payments on Form 1040, 1040-SR, receive other payments for sickness or injury.
or 1040-NR, lines 5a and 5b. For more information on
pensions and annuities, see Pub. 575. Federal Employees' Compensation Act (FECA). Pay-
ments received under this Act for personal injury or sick-
Note. Don’t include in your income disability payments ness, including payments to beneficiaries in case of
you receive for injuries incurred as a direct result of terro- death, aren't taxable. However, you are taxed on amounts
rist attacks or military action directed against the United you receive under this Act as continuation of pay for up to
States (or its allies), whether outside or within the United 45 days while a claim is being decided. Report this in-
States. For more information, see Terrorist attacks in Pub. come on Form 1040, 1040-SR, or 1040-NR, line 1a. Also,
525. pay for sick leave while a claim is being processed is taxa-
ble and must be included in your income as wages.
Retirement and profit-sharing plans. If you receive
payments from a retirement or profit-sharing plan that
doesn't provide for disability retirement, don't treat the

Chapter 2 Taxable and Nontaxable Income Page 15

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If part of the payments you receive under FECA of installments to be paid. Include anything over this ex-
! reduces your social security or equivalent railroad cluded part in your income as interest.
CAUTION retirement benefits, that part is considered social
Installments for life. If, as the beneficiary under an in-
security (or equivalent railroad retirement) benefits and
surance contract, you are entitled to receive the proceeds
may be taxable. For a discussion of the taxability of these
in installments for the rest of your life without a refund or
benefits, see Social Security and Equivalent Railroad Re-
period-certain guarantee, figure the excluded part of each
tirement Benefits, earlier.
installment by dividing the amount held by the insurance
company by your life expectancy. If there is a refund or
Other compensation. Many other amounts you receive period-certain guarantee, the amount held by the insur-
as compensation for sickness or injury aren't taxable. ance company for this purpose is reduced by the actuarial
These include the following amounts. value of the guarantee.
• Benefits you receive under an accident or health in- Surviving spouse. If your spouse died before Octo-
surance policy on which either you paid the premiums ber 23, 1986, and insurance proceeds paid to you be-
or your employer paid the premiums but you had to in- cause of the death of your spouse are received in install-
clude the amount of employer-paid premiums in your ments, you can exclude, in any year, up to $1,000 of the
income. interest included in the installments. If you remarry, you
• Compensatory damages you receive for physical in- can continue to take the exclusion.
jury or physical sickness, whether paid in a lump sum
or in periodic payments. Surrender of policy for cash. If you surrender a life in-
surance policy for cash, you must include in income any
• Disability benefits you receive for loss of income or proceeds that are more than the cost of the life insurance
earning capacity as a result of injuries under a no-fault policy. In general, your cost (or investment in the contract)
car insurance policy. is the total of premiums that you paid for the life insurance
• Compensation you receive for permanent loss or loss policy, less any refunded premiums, rebates, dividends,
of use of a part or function of your body, for your per- or unrepaid loans that weren't included in your income.
manent disfigurement, or for such loss or disfigure- You should receive a Form 1099-R showing the total pro-
ment suffered by your spouse or dependent(s). This ceeds and the taxable part. Report these amounts on
compensation must be based only on the injury and Form 1040, 1040-SR, or 1040-NR, lines 5a and 5b.
not on the period of your absence from work. These
benefits aren't taxable even if your employer pays for Endowment Contract Proceeds
the accident and health plan that provides these bene-
fits. An endowment contract is a policy that pays you a speci-
fied amount of money on a certain date unless you die be-
fore that date, in which case the money is paid to your
Life Insurance Proceeds designated beneficiary. Endowment proceeds paid in a
lump sum to you at maturity are taxable only if the pro-
Life insurance proceeds paid to you because of the death ceeds are more than the cost of the policy. To determine
of the insured person aren't taxable unless the policy was your cost, subtract from the total premiums (or other con-
turned over to you for a price. This is true even if the pro- sideration) paid for the contract any amount that you pre-
ceeds were paid under an accident or health insurance viously received under the contract and excluded from
policy or an endowment contract issued on or before De- your income. Include in your income the part of the
cember 31, 1984. However, interest income received as a lump-sum payment that is more than your cost.
result of life insurance proceeds may be taxable.
Endowment proceeds that you choose to receive in in-
Proceeds not received in installments. If death bene- stallments instead of a lump-sum payment at the maturity
fits are paid to you in a lump sum or other than at regular of the policy are taxed as an annuity. The tax treatment of
intervals, include in your income only the benefits that are an annuity is explained in Pub. 575. For this treatment to
more than the amount payable to you at the time of the in- apply, you must choose to receive the proceeds in install-
sured person's death. If the benefit payable at death isn't ments before receiving any part of the lump sum. This
specified, include in your income the benefit payments election must be made within 60 days after the lump-sum
that are more than the present value of the payments at payment first becomes payable to you.
the time of death.
Accelerated Death Benefits
Proceeds received in installments. If you receive life
insurance proceeds in installments, you can exclude part
Certain amounts paid as accelerated death benefits under
of each installment from your income.
a life insurance contract or viatical settlement before the
To determine the excluded part, divide the amount held
insured's death are generally excluded from income if the
by the insurance company (generally, the total lump-sum
insured is terminally or chronically ill. However, see Ex-
payable at the death of the insured person) by the number
ception, later. For a chronically ill individual, accelerated
death benefits paid on the basis of costs incurred for

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qualified long-term care services are fully excludable. Ac- • Mobile home,
celerated death benefits paid on a per diem or other peri-
• Cooperative apartment, or
odic basis without regard to the costs are excludable up to
a limit. • Condominium.

In addition, if any portion of a death benefit under a life Repaying the first-time homebuyer credit. If you pur-
insurance contract on the life of a terminally or chronically chased your home in 2008 and claimed the first-time
ill individual is sold or assigned to a viatical settlement homebuyer credit, you must continue repaying the credit
provider, the amount received is also excluded from in- with your 2022 tax return. If you are required to repay the
come. Generally, a viatical settlement provider is one who credit because you sold the home or it otherwise ceased
regularly engages in the business of buying or taking as- to be your main home in 2022, you must generally repay
signment of life insurance contracts on the lives of insured the balance of the unpaid credit with your 2022 return.
individuals who are terminally or chronically ill. See the Instructions for Form 5405, Repayment of the
First-Time Homebuyer Credit, for more information and
To report taxable accelerated death benefits made on a
exceptions.
per diem or other periodic basis, you must file Form 8853,
Archer MSAs and Long-Term Care Insurance Contracts,
with your return. Maximum Amount of Exclusion

Terminally or chronically ill defined. A terminally ill You can generally exclude up to $250,000 of the gain
person is one who has been certified by a physician as (other than gain allocated to periods of nonqualified use)
having an illness or physical condition that can reasonably on the sale of your main home if all of the following are
be expected to result in death within 24 months from the true.
date of the certification. A chronically ill person is one who • You meet the ownership test.
isn't terminally ill but has been certified (within the previ-
ous 12 months) by a licensed health care practitioner as • You meet the use test.
meeting either of the following conditions. • During the 2-year period ending on the date of the
• The person is unable to perform (without substantial sale, you didn't exclude gain from the sale of another
help) at least two activities of daily living (eating, toilet- home.
ing, transferring, bathing, dressing, and continence)
Joint returns. You may be able to exclude up to
for a period of 90 days or more because of a loss of
$500,000 of the gain (other than gain allocated to periods
functional capacity.
of nonqualified use) on the sale of your main home if you
• The person requires substantial supervision to protect are married and file a joint return and meet the require-
himself or herself from threats to health and safety due ments listed in the discussion of the special rules for joint
to severe cognitive impairment. returns, later, under Married Persons.

Exception. The exclusion doesn't apply to any amount Reduced exclusion. Even if you don't meet the require-
paid to a person other than the insured if that other person ments described above, you can still claim an exclusion in
has an insurable interest in the life of the insured because some cases. Generally, you must have sold the home due
the insured: to a change in place of employment, health, or unforeseen
circumstances. The maximum amount you can exclude
• Is a director, officer, or employee of the other person;
will be reduced. See Pub. 523, Selling Your Home, for
or
more information.
• Has a financial interest in the business of the other
person. Expatriation tax. You can't exclude gain from the sale of
your home if you are subject to the expatriation tax. See
Pub. 519 for more information about the expatriation tax.
Sale of Home
Ownership and Use Tests
You may be able to exclude from income any gain up to
$250,000 ($500,000 on a joint return in most cases) on To claim the exclusion, you must meet the ownership and
the sale of your main home. Generally, if you can exclude use tests. These tests generally require that during the
all of the gain, you don't need to report the sale on your 5-year period ending on the date of the sale, you must
tax return. You can choose not to take the exclusion by in- have:
cluding the gain from the sale in your gross income on • Owned the home for at least 2 years (the ownership
your tax return for the year of the sale. test), and
Main home. Usually, your main home is the home you • Lived in the home as your main home for at least 2
live in most of the time and can be a: years (the use test). The 2 years of residence can fall
anywhere within the 5-year period, and it doesn't need
• House, to be a single block of time.
• Houseboat,

Chapter 2 Taxable and Nontaxable Income Page 17

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Exception to use test for individuals with a disability. • During the 2-year period ending on the date of the
There is an exception to the use test if, during the 5-year sale, neither you nor your spouse exclude gain from
period before the sale of your home: the sale of another home.

• You become physically or mentally unable to care for Sale of home by surviving spouse. If your spouse died
yourself, and and you didn't remarry before the date of sale, you are
• You owned and lived in your home as your main home considered to have owned and lived in the property as
for a total of at least 1 year. your main home during any period of time when your
spouse owned and lived in it as a main home.
If you qualify for this exception, you are considered to live
If you meet all of the following requirements, you may
in your home during any time that you own the home and
qualify to exclude up to $500,000 of any gain from the sale
live in a facility (including a nursing home) that is licensed
or exchange of your main home in 2022.
by a state or political subdivision to care for persons in
your condition. • The sale or exchange took place no more than 2 years
If you meet this exception to the use test, you still have after the date of death of your spouse.
to meet the 2-out-of-5-year ownership test to claim the ex-
• You haven't remarried.
clusion.
• You and your spouse met the use test at the time of
Exception to ownership test for property acquired in your spouse's death.
a like-kind exchange. If you acquired your main home in
a like-kind exchange, you must own the home for 5 years • You or your spouse met the ownership test at the time
of your spouse's death.
before you qualify for the exclusion. This special 5-year
ownership rule continues to apply to the home even if you • Neither you nor your spouse excluded gain from the
give it to another person. A like-kind exchange is an ex- sale of another home during the last 2 years.
change of property held for productive use in a trade or
business or for investment in which no gain or loss is rec- Home transferred from spouse. If your home was
ognized. See Pub. 523 for more information. transferred to you by your spouse (or former spouse if the
transfer was incident to divorce), you are considered to
Period of nonqualified use. Generally, the gain from have owned it during any period of time when your spouse
the sale or exchange of your main home won't qualify for owned it.
the exclusion to the extent that the gain is allocated to pe-
riods of nonqualified use. Nonqualified use is any period Use of home after divorce. You are considered to have
after December 31, 2008, during which the property isn't used property as your main home during any period when:
used as the main home. See Pub. 523 for more informa- • You owned it, and
tion.
• Your spouse or former spouse is allowed to live in it
under a divorce or separation instrument and uses it
Married Persons as his or her main home.

Generally, if the home you sold counts as your main home
and you are a married person filing separately, the first Business Use or Rental of Home
$250,000 of gain isn't taxable if all of the following are
true. You may be able to exclude gain from the sale of a home
that you have used for business or to produce rental in-
• You meet the ownership test. come. However, you must meet the ownership and use
• You meet the use test. tests. See Pub. 523 for more information.

• During the 2-year period ending on the date of the Recapturing depreciation. If you used all or part of your
sale, you didn’t exclude gain from the sale of another home for business or rental after May 6, 1997, you may
home. need to pay back (recapture) some or all of the deprecia-
tion you were entitled to take on your property when you
You may be able to exclude up to $500,000 of the gain sell it. See Pub. 523 for more information.
(other than gain allocated to periods of nonqualified use)
on the sale of your main home if you are married and file a
joint return and meet the requirements for joint returns dis- Reporting the Sale
cussed under Special rules for joint returns next.
Don't report the 2022 sale of your main home on your tax
Special rules for joint returns. You can exclude up to return unless:
$500,000 of the gain on the sale of your main home if all of • You received Form 1099-S, Proceeds From Real Es-
the following are true. tate Transactions;
• You are married and file a joint return for the year. • You have a gain and you don't qualify to exclude all of
• Either you or your spouse meets the ownership test. it;
• Both you and your spouse meet the use test. • You have a gain and you choose not to exclude it; or

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• You have a loss from the sale that is deductible. compensation for services or that are obtained fraudu-
lently.
A loss from the sale of your home, or the personal
! part of your home if it was also used for business Payments from a state fund for victims of crime.
CAUTION or to produce rental income, isn’t deductible. Don't include in your income payments from a state fund
for victims of crime if the payments are in the nature of
If any of the above apply, report the sale on Part I or welfare payments. Don't deduct medical expenses that
Part II of Form 8949 as a short-term or long-term transac- are reimbursed by such a fund.
tion, depending on how long you owned the home. If you
used your home for business or to produce rental income, Mortgage assistance payments. Payments made
you may have to use Form 4797, Sales of Business Prop- under section 235 of the National Housing Act for mort-
erty, to report the sale of the business or rental part. See gage assistance aren't included in the homeowner's in-
Pub. 523 for more information. come. Interest paid for the homeowner under the mort-
gage assistance program can't be deducted.
Also, mortgage payments provided under the Depart-
ment of Housing and Urban Development's Emergency
Reverse Mortgages Homeowners' Loan Program (EHLP), state housing fi-
nance authorities receiving funds allocated from the
A reverse mortgage is a loan where the lender pays you Housing Finance Agency Innovation Fund for the Hard-
(in a lump sum, a monthly advance, a line of credit, or a est-Hit Housing Markets (HFA Hardest Hit Fund), or other
combination of all three) while you continue to live in your similar state programs receiving funding from the EHLP
home. With a reverse mortgage, you retain title to your are excluded from income. Interest paid for the home-
home. Depending on the plan, your reverse mortgage be- owner under the EHLP or the HFA Hardest Hit Fund may
comes due with interest when you move, sell your home, be deductible. See Form 1098-MA, Mortgage Assistance
reach the end of a pre-selected loan period, or die. Be- Payments, and its instructions for details.
cause reverse mortgages are considered loan advances
and not income, the amount you receive isn't taxable. Any Payments to reduce cost of winter energy use.
interest (including original interest discount) accrued on a Payments made by a state to qualified people on the ba-
reverse mortgage isn’t deductible home mortgage inter- sis of need to reduce their cost of winter energy use aren't
est. See Pub. 936, Home Mortgage Interest Deduction, for taxable.
more information. Nutrition Program for the Elderly. Food benefits you
receive under the Nutrition Program for the Elderly aren't
taxable. If you prepare and serve free meals for the pro-
Other Items gram, include in your income as wages the cash pay you
receive, even if you are also eligible for food benefits.
The following items are generally excluded from taxable
Reemployment Trade Adjustment Assistance
income. You shouldn't report them on your return, unless
(RTAA). Payments you receive from a state agency un-
otherwise indicated as taxable or includible in income.
der RTAA must be included in your income. The state
Gifts and inheritances. In most cases, property you re- must send you Form 1099-G, Certain Government Pay-
ceive as a gift, bequest, or inheritance isn't included in ments, to advise you of the amount you should include in
your income. However, if property you receive this way income. The amount should be reported on Schedule 1
later produces income such as interest, dividends, or (Form 1040), line 8z.
rents, that income is taxable to you. If property is given to
Persons with disabilities. If you have a disability, in-
a trust and the income from it is paid, credited, or distrib-
clude in income compensation you receive for services
uted to you, that income is also taxable to you. If the gift,
you perform unless the compensation is otherwise exclu-
bequest, or inheritance is the income from property, that
ded. However, don't include in income the value of goods,
income is taxable to you.
services, and cash that you receive, not in return for your
Veterans' benefits. Don't include in your income any services, but for your training and rehabilitation because
veterans' benefits paid under any law, regulation, or ad- you have a disability. Excludable amounts include pay-
ministrative practice administered by the Department of ments for transportation and attendant care, such as inter-
Veterans Affairs (VA). See Pub. 525. preter services for the deaf, reader services for the blind,
and services to help individuals with an intellectual disabil-
Public assistance benefits. Other items that are gener- ity do their work.
ally excluded from taxable income also include the follow-
ing public assistance benefits. Medicare. Medicare benefits received under title XVIII of
the Social Security Act aren't includible in the gross in-
Welfare benefits. Don't include in your income benefit come of the individuals for whom they are paid. This in-
payments from a public welfare fund based upon need, cludes basic (Part A (Hospital Insurance Benefits for the
such as payments due to blindness. However, you must Aged)) and supplementary (Part B (Supplementary Medi-
include in your income any welfare payments that are cal Insurance Benefits for the Aged)).

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isn't a Roth or SIMPLE IRA. Roth and SIMPLE IRAs are
Social security benefits. The Social Security Adminis- defined earlier in the IRA discussion under Retirement
tration (SSA) provides benefits such as old age benefits, ‐ Plan Distributions. For more detailed information, see
benefits to disabled workers, and benefits to spouses and Pub. 590-A and Pub. 590-B.
dependents. These benefits may be subject to federal in-
come tax depending on your filing status and other in- Contributions. An IRA is a personal savings plan that of-
come. See Social Security and Equivalent Railroad Re- fers you tax advantages to set aside money for your retire-
tirement Benefits, earlier, and Pub. 915 for more ment. Two advantages of a traditional IRA are:
information. • You may be able to deduct some or all of your contri-
butions to it, depending on your circumstances; and
• Generally, amounts in your IRA, including earnings
and gains, aren't taxed until distributed.
Although interest earned from your traditional IRA
3. ! generally isn't taxed in the year earned, it isn't
CAUTION tax-exempt interest. Don't report this interest on
your tax return as tax-exempt interest.
Adjustments to Income
General limit. The most that can be contributed for 2022
You may be able to subtract amounts from your total in- to your traditional IRA is the smaller of the following
come (Form 1040 or 1040-SR, line 9) or total effectively amounts.
connected income (Form 1040-NR, line 9) to get your ad-
justed gross income (Form 1040, 1040-SR, or 1040-NR, • Your taxable compensation for the year, or
line 11). Some adjustments to income follow. • $6,000 ($7,000 if you were age 50 or older by the end
• Contributions to your IRA (Schedule 1 (Form 1040), of 2022).
line 20), explained later. Contributions to Kay Bailey Hutchison Spousal
• Some health insurance costs (Schedule 1 (Form IRAs. In the case of a married couple filing a joint return
1040), line 17) if you were self-employed and had a for 2022, up to $6,000 ($7,000 for each spouse age 50 or
net profit for the year, or if you received wages in 2022 older by the end of 2022) can be contributed to IRAs on
from an S corporation in which you were a behalf of each spouse, even if one spouse has little or no
more-than-2% shareholder. For more details, see compensation.
Pub. 535, Business Expenses. For more information on the general limit and the Kay
• Payments to your self-employed SEP, SIMPLE, or Bailey Hutchison Spousal IRA limit, see How Much Can
qualified plan (Schedule 1 (Form 1040), line 16). For Be Contributed? in Pub. 590-A.
more information, including limits on how much you Deductible contribution. Generally, you can deduct
can deduct, see Pub. 560. the lesser of the contributions to your traditional IRA for
• Penalties paid on early withdrawal of savings (Sched- the year or the general limit (or Kay Bailey Hutchison
ule 1 (Form 1040), line 18). Form 1099-INT, Interest Spousal IRA limit, if applicable) just explained. However, if
Income, or Form 1099-OID, Original Issue Discount, you or your spouse was covered by an employer retire-
will show the amount of any penalty you were ment plan at any time during the year for which contribu-
charged. tions were made, you may not be able to deduct all of the
• Alimony payments (Schedule 1 (Form 1040), contributions. Your deduction may be reduced or elimina-
line 19a). Certain conditions may apply for your ali- ted, depending on your filing status and the amount of
mony payment to be deductible from income. For your income. For more information, see Limit if Covered
more information, see Pub. 504, Divorced or Separa- by Employer Plan in Pub. 590-A.
ted Individuals. Nondeductible contribution. The difference be-
There are other items you can claim as adjustments to in- tween your total permitted contributions and your IRA de-
come. These adjustments are discussed in your tax return duction, if any, is your nondeductible contribution. You
instructions. must file Form 8606 to report nondeductible contributions
even if you don't have to file a tax return for the year.

Individual Retirement

Arrangement (IRA)

Contributions and Deductions

This section explains the tax treatment of amounts you
pay into traditional IRAs. A traditional IRA is any IRA that

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                                                                     or older at the time of death. A taxpayer is considered age 
                                                                     65 on the day before their birthday.
4.
                                                                     Example.    Your  spouse  was  born  on  February 
                                                                     14,1957, and died on February 13, 2022. Your spouse is 
                                                                     considered age 65 at the time of death. However, if your 
Deductions
                                                                     spouse died on February 12, 2022, your spouse isn't con-
Most taxpayers have a choice of taking a standard deduc-             sidered  age  65  at  the  time  of  death  and  isn't  age  65  or 
tion  or  itemizing  their  deductions.  You  benefit  from  the     older at the end of 2022.

standard  deduction  if  your  standard  deduction  is  more         Higher  standard  deduction  for  blindness. If  you  are 
than the total of your allowable itemized deductions. If you         blind on the last day of the year and you don't itemize de-
have a choice, you should use the method that gives you              ductions, you are entitled to a higher standard deduction.
the lower tax.
                                                                     Not totally blind. If you aren't totally blind, you must get 
                                                                     a certified statement from an eye doctor (ophthalmologist 
Standard Deduction                                                   or optometrist) that:
                                                                     • You can't see better than 20/200 in the better eye with 
The  standard  deduction  amount  depends  on  your  filing            glasses or contact lenses, or
status, whether you are 65 or older or blind, and whether 
another taxpayer can claim you as a dependent. Gener-                • Your field of vision isn't more than 20 degrees.
ally,  the  standard  deduction  amounts  are  adjusted  each        If  your  eye  condition  isn’t  likely  to  improve  beyond 
year for inflation. In most cases, you can use Worksheet             these  limits,  the  statement  should  include  this  fact.  You 
4-1 to figure your standard deduction amount.                        must keep the statement in your records.
                                                                     If your vision can be corrected beyond these limits only 
Persons not eligible for the standard deduction.   Your              by contact lenses that you can wear only briefly because 
standard  deduction  is  zero  and  you  should  itemize  any        of pain, infection, or ulcers, you can take the higher stand-
deductions you have if:                                              ard deduction for blindness if you otherwise qualify.
•  You are married and filing a separate return, and your 
                                                                     Spouse  age  65  or  older  or  blind. You  can  take  the 
   spouse itemizes deductions;
                                                                     higher  standard  deduction  if  your  spouse  is  age  65  or 
•  You are filing a tax return for a short tax year because          older or blind and:
   of a change in your annual accounting period; or
                                                                     • You file a joint return, or
•  You are a nonresident or dual-status alien during the 
   year. You are considered a dual-status alien if you               • You file a separate return and your spouse had no 
                                                                       gross income and can’t be claimed as a dependent by 
   were both a nonresident alien and a resident alien 
                                                                       another taxpayer.
   during the year.
If you are a nonresident alien who is married to a U.S.                     You can't claim the higher standard deduction for 
citizen  or  resident  alien  at  the  end  of  the  year,  you  can !      an individual other than yourself and your spouse.
                                                                     CAUTION
choose to be treated as a U.S. resident. See Pub. 519. If 
you make this choice, you can take the standard deduc-
                                                                     Example.    This  example  illustrates  how  to  determine 
tion.
                                                                     your standard deduction using Worksheet 4-1.
Decedent's final return. The amount of the standard de-              Jean  and  Terry  are  filing  a  joint  return  for  2022.  Both 
duction for a decedent's final tax return is the same as it          are  over  age  65.  Neither  is  blind,  and  neither  can  be 
would  have  been  had  the  decedent  continued  to  live.          claimed  as  a  dependent.  They  don't  itemize  deductions, 
However,  if  the  decedent  wasn't  age  65  or  older  at  the     so they use Worksheet 4-1. Because they are married fil-
time of death, the higher standard deduction for age can't           ing jointly, they enter $25,900 on line 1. They check the 
be claimed. See Death before age 65, later.                          “No” box on line 2, so they also enter $25,900 on line 4. 
                                                                     Because  they  are  both  over  age  65,  they  enter  $2,800 
Higher  standard  deduction  for  age  (65  or  older).  If          ($1,400  ×  2)  on  line  5.  They  enter  $28,700  ($25,900  + 
you don't itemize deductions, you are entitled to a higher           $2,800) on line 6, so their standard deduction is $28,700.
standard deduction if you are age 65 or older at the end of 
the  year.  You  are  considered  age  65  on  the  day  before      Standard Deduction for Dependents
your  65th  birthday.  Therefore,  you  can  take  a  higher 
standard deduction for 2022 if you were born before Janu-            The  standard  deduction  for  an  individual  who  can  be 
ary 2, 1958.                                                         claimed as a dependent on another person's tax return is 
                                                                     generally limited to the greater of:
Death  before  age  65. If  you  are  preparing  a  return  for 
someone who died in 2022, consider the taxpayer to be                • $1,150, or
age 65 or older at the end of 2022 only if they were age 65 

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Worksheet 4-1. 2022 Standard Deduction Worksheet                                       Keep for Your Records
Caution. If you are married filing separately and your spouse itemizes deductions, or if you are a dual-status alien, don't complete this worksheet. 
If you were born before January 2, 1958, and/or you were blind at the end of 2022, check the correct box(es) below. Put the total 
number of boxes checked in box c and go to line 1.
a.    You                                                             Born before January 2, 1958                                                                   Blind  
b.    Your spouse                                                     Born before January 2, 1958                                                                   Blind
c.    Total boxes checked    
   1. Enter the amount shown below for your filing status.
      • Single or married filing separately—$12,950
      • Married filing jointly or qualifying surviving                                                                           
                                                                      . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
        spouse—$25,900
      • Head of household—$19,400
   2. Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?
        No. Skip line 3; enter the amount from line 1 on line 4.
        Yes. Go to line 3.
   3. Is your earned income* more than $750?

        Yes. Add $400 to your earned income. Enter the total.                                                                    
                                                                      . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
        No. Enter $1,150.
   4. Enter the smaller of line 1 or line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.      
   5. If born before January 2, 1958, or blind, multiply the number in box c by $1,400 ($1,750 if single or head of 
      household). Enter the result here. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 5.      
   6. Add lines 4 and 5. This is your standard deduction for 2022** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     6.      
* Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also 
includes any taxable scholarship or fellowship grant. Generally, your earned income is the total of the amount(s) you reported on Form 1040 or 
1040-SR, line 1z, and Schedule 1 (Form 1040), lines 3, 6, 8r, 8t, and 8u minus the amount, if any, on Schedule 1 (Form 1040), line 15.
** You may be able to increase the amount of your standard deduction on line 6 by a loss you suffered related to property in one of 
the Presidentially declared disaster areas eligible for that relief. See Pub. 976 for more information.

•  The individual's earned income for the year plus $400              You  may  benefit  from  itemizing  your  deductions  on 
   (but not more than the regular standard deduction                  Schedule A (Form 1040) if you:
   amount).
                                                                      • Can't take the standard deduction;
  However, the standard deduction may be higher if the                • Had uninsured medical or dental expenses that are 
individual is age 65 or older or blind.                                 more than 7.5% of your adjusted gross income (AGI);
  If  you  (or  your  spouse  if  you  are  filing  jointly)  can  be • Paid interest on a loan secured by your home and that 
claimed  as  a  dependent  on  someone  else's  return,  use            you used to buy, build, or improve your home;
Worksheet 4-1, if applicable, to determine your standard 
deduction.                                                            • Paid real estate or personal property taxes;
                                                                      • Paid state and local income taxes or general sales 
                                                                        taxes;
Itemized Deductions                                                   • Had large uninsured casualty or theft losses due to a 
                                                                        federally declared disaster;
Some individuals should itemize their deductions because 
it  will  save  them  money.  Others  should  itemize  because        • Made large contributions to qualified charities (see 
they don't qualify for the standard deduction. See the dis-             Pub. 526, Charitable Contributions); or
cussion under Standard Deduction, earlier, to decide if it            • Have total itemized deductions that are more than the 
would be to your advantage to itemize deductions.                       standard deduction that applies to you.
  Medical and dental expenses, some taxes, certain in-                See  the  Instructions  for  Schedule  A  (Form  1040)  for 
terest  expenses,  charitable  contributions,  casualty  and          more information.
theft losses, and certain other expenses may be itemized 
as deductions on Schedule A (Form 1040).

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Medical and Dental Expenses                                       doesn't  matter  when  you  actually  pay  the  amount 
                                                                  charged.
You can deduct certain medical and dental expenses you 
paid  for  yourself,  your  spouse,  and  your  dependent(s)  if  Home Improvements
you itemize your deductions on Schedule A (Form 1040).
Table 4-1 shows some common items that you can or                 You can include in medical expenses amounts you pay for 
can't include in figuring your medical expense deduction.         home improvements if their main purpose is medical care 
For more information, see the following discussions of se-        for you, your spouse, or your dependent(s).
lected items, which are presented in alphabetical order. A 
more  extensive  list  of  items  and  further  details  can  be    Only reasonable costs to accommodate a home to your 
found in Pub. 502, Medical and Dental Expenses.                   disabled condition (or that of your spouse or your depend-
                                                                  ent(s)  who  lives  with  you)  are  considered  medical  care. 
        You can deduct only the amount of your medical            Additional  costs  for  personal  motives,  such  as  for  archi-
!       and  dental  expenses  that  is  more  than  7.5%  of     tectural  or  aesthetic  reasons,  aren't  medical  expenses. 
CAUTION your AGI.
                                                                  Pub.  502  contains  additional  information  and  examples, 
                                                                  including a capital expense worksheet, to assist you in fig-
What  to  include. Generally,  you  can  include  only  the       uring the amount of the capital expense that you can in-
medical and dental expenses you paid this year, regard-           clude in your medical expenses. Also, see Pub. 502 for in-
less of when the services were provided. If you pay medi-         formation  about  deductible  operating  and  upkeep 
cal  expenses  by  check,  the  day  you  mail  or  deliver  the  expenses related to such capital expense items, and for 
check  is  generally  the  date  of  payment.  If  you  use  a    information about improvements, for medical reasons, to 
pay-by-phone or online account to pay your medical ex-            property rented by a person with disabilities.
penses, the date reported on the statement of the financial 
institution showing when payment was made is the date of          Household Help
payment. You can include medical expenses you charge 
to  your  credit  card  in  the  year  the  charge  is  made.  It You can't include in medical expenses the cost of house-
                                                                  hold help, even if such help is recommended by a doctor. 
Table 4-1.  Medical and Dental Expenses Checklist
You can include:                                                  You can't include:
• Bandages                  • Medicare Part D                     • Contributions to Archer    • Medical insurance 
• Capital expenses for        premiums                              MSAs (see Pub. 969)          included in a car 
  equipment or              • Oxygen equipment and                • Bottled water                insurance policy 
  improvements to your        oxygen                              • Diaper service               covering all persons 
  home needed for           • Part of life-care fee paid          • Expenses for your            injured in or by your car
  medical care (see Pub.      to retirement home                    general health (even if    • Medicine you buy 
  502)                        designated for medical                following your doctor's      without a prescription
• Certain weight-loss         care                                  advice) such as:           • Nursing care for a 
  expenses for obesity      • Prescription medicines                —Health club dues;           healthy baby
• Diagnostic devices          (prescribed by a doctor)              —Household help (even if   • Prescription drugs you 
• Expenses of an organ        and insulin                           recommended by a             brought in (or ordered 
  donor                     • Psychiatric and                       doctor);                     shipped) from another 
• Eye surgery—to promote      psychological treatment               —Social activities, such     country, in most cases 
  the correct function of   • Social security tax,                  as dancing or swimming       (see Pub. 502)
  the eye                     Medicare tax, FUTA tax,               lessons; and               • Surgery for purely 
• Guide dogs or other         and state employment                  —Trip for general health     cosmetic reasons (see 
  service animals aiding      tax for worker providing              improvement                  Pub. 502)
  the blind, deaf, and        medical care (see Pub.              • Flexible spending          • Toothpaste, toiletries, 
  disabled                    502)                                  account reimbursements       cosmetics, etc.
• Hospital services fees    • Special items (artificial             for medical expenses (if   • Teeth whitening
  (lab work, therapy,         limbs, dentures,                      contributions were on a    • Weight-loss expenses 
  nursing services,           eyeglasses, contact                   pre-tax basis) (see Pub.     not for the treatment of 
  surgery, etc.)              lenses, hearing aids,                 502)                         obesity or other disease
• Lead-based paint            crutches, wheelchair,               • Funeral, burial, or 
  removal (see Pub. 502)      etc.)                                 cremation expenses
• Long-term care            • Special education for               • Health savings account 
  contracts, qualified (see   mentally or physically                payments for medical 
  Pub. 502)                   disabled persons (see                 expenses (see Pub. 502)
• Meals and lodging           Pub. 502)                           • Illegal operation or 
  provided by a hospital    • Stop-smoking programs                 treatment
  during medical treatment  • Transportation for                  • Life insurance or income 
• Medical and hospital        needed medical care                   protection policies, or 
  insurance premiums        • Treatment at a drug or                policies providing 
• Medical services fees       alcohol center (includes              payment for loss of life, 
  (from doctors, dentists,    meals and lodging                     limb, sight, etc.
  surgeons, specialists,      provided by the center)
  and other medical         • Wages for nursing 
  practitioners)              services (see Pub. 502)

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This is a personal expense that isn't deductible. However, 2. Not provide for a cash surrender value or other money
you may be able to include certain expenses paid to a that can be paid, assigned, pledged, or borrowed;
person providing nursing-type services. For more informa-
3. Provide that refunds, other than refunds on the death
tion, see Nursing Services, later. Also, certain mainte-
of the insured or complete surrender or cancellation
nance or personal care services provided for qualified
of the contract, and dividends under the contract must
long-term care can be included in medical expenses. For
be used only to reduce future premiums or increase
more information, see Qualified long-term care services
future benefits; and
under Long-Term Care, later.
4. Generally not pay or reimburse expenses incurred for
Hospital Services services or items that would be reimbursed under
Medicare, except where Medicare is a secondary
You can include in medical expenses amounts you pay for payer, or the contract makes per diem or other peri-
the cost of inpatient care at a hospital or similar institution odic payments without regard to expenses.
if a principal reason for being there is to receive medical
care. This includes amounts paid for meals and lodging. The amount of qualified long-term care premiums you
Also, see Meals and Lodging, later. can include is limited. You can include the following as
medical expenses on Schedule A (Form 1040).
Long-Term Care 1. Qualified long-term care premiums up to the following
amounts.
You can include in medical expenses amounts paid for
qualified long-term care services and certain amounts of a. Age 40 or under—$450.
premiums paid for qualified long-term care insurance con- b. Age 41 to 50—$850.
tracts.
c. Age 51 to 60—$1,690.
Qualified long-term care services. Qualified long-term
d. Age 61 to 70—$4,510.
care services are necessary diagnostic, preventive, thera-
peutic, curing, treating, mitigating, rehabilitative services, e. Age 71 or over—$5,640.
and maintenance and personal care services (defined
2. Unreimbursed expenses for qualified long-term care
later) that are:
services.
1. Required by a chronically ill individual, and
Note. The limit on premiums is for each person.
2. Provided under a plan of care prescribed by a li-
censed health care practitioner.
Meals and Lodging
Chronically ill individual. An individual is chronically
ill if, within the previous 12 months, a licensed health care You can include in medical expenses the cost of meals
practitioner has certified that the individual meets either of and lodging at a hospital or similar institution if your main
the following descriptions. reason for being there is to receive medical care.

1. He or she is unable to perform at least two activities of You may be able to include in medical expenses the
daily living without substantial assistance from an- cost of lodging (but not meals) not provided in a hospital
other individual for at least 90 days, due to a loss of or similar institution. You can include the cost of such
functional capacity. Activities of daily living are eating, lodging while away from home if all of the following re-
toileting, transferring, bathing, dressing, and conti- quirements are met.
nence.
• The lodging is primarily for, and essential to, medical
2. He or she requires substantial supervision to be pro- care.
tected from threats to health and safety due to severe
cognitive impairment. • The medical care is provided by a doctor in a licensed
hospital or in a medical care facility related to, or the
Maintenance and personal care services. Mainte- equivalent of, a licensed hospital.
nance or personal care services is care which has as its The lodging isn't lavish or extravagant under the cir-
•
primary purpose the providing of a chronically ill individual cumstances.
with needed assistance with his or her disabilities (includ-
ing protection from threats to health and safety due to se- • There is no significant element of personal pleasure,
vere cognitive impairment). recreation, or vacation in the travel away from home.

Qualified long-term care insurance contracts. A The amount you include in medical expenses for lodg-
qualified long-term care insurance contract is an insur- ing can't be more than $50 per night for each person. You
ance contract that provides only coverage of qualified can include lodging for a person traveling with the person
long-term care services. The contract must: receiving the medical care. For example, if a parent is
traveling with a sick child, up to $100 per night can be in-
1. Be guaranteed renewable;
cluded as a medical expense for lodging. (Meals aren't in-
cluded.)

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Nursing home. You can include in medical expenses the your spouse, or your dependents after you reach age 65
cost of medical care in a nursing home or a home for the are medical care expenses in the year paid if they are:
aged for yourself, your spouse, or your dependent(s). This
• Payable in equal yearly installments or more often;
includes the cost of meals and lodging in the home if a
and
main reason for being there is to get medical care.
Don't include the cost of meals and lodging if the rea- • Payable for at least 10 years, or until you reach age 65
son for being in the home is personal. However, you can (but not for less than 5 years).
include in medical expenses the part of the cost that is for
medical or nursing care. Medicines

Medical Insurance Premiums You can include in medical expenses amounts you pay for
prescribed medicines and drugs. A prescribed drug is one
You can include in medical expenses insurance premiums that requires a prescription by a doctor for its use by an in-
you pay for policies that cover medical care. Policies can dividual. You can also include amounts you pay for insu-
provide payment for: lin. Except for insulin, you can't include in medical expen-
• Hospitalization, surgical fees, X-rays; ses amounts you pay for a drug that isn't prescribed.

• Prescription drugs and insulin; Imported medicines and drugs. If you import medi-
cines or drugs from other countries, see Medicines and
• Dental care;
Drugs From Other Countries under What Expenses Aren't
• Replacement of lost or damaged contact lenses; and Includible in Pub. 502.
• Qualified long-term care insurance contracts (subject
to the additional limits included in the discussion on Nursing Services
qualified long-term care insurance contracts under
Long-Term Care, earlier). You can include in medical expenses wages and other
amounts you pay for nursing services. The services need
If you have a policy that provides payments for other not be performed by a nurse as long as the services are of
than medical care, you can include the premiums for the a kind generally performed by a nurse. This includes serv-
medical care part of the policy if the charge for the medi- ices connected with caring for the patient's condition,
cal part is reasonable. The cost of the medical portion such as giving medication or changing dressings, as well
must be separately stated in the insurance contract or as bathing and grooming the patient. These services can
given to you in a separate statement. be provided in your home or another care facility.

Medicare Part A. If you are covered under social secur- Generally, only the amount spent for nursing services is
ity (or if you are a government employee who paid Medi- a medical expense. If the attendant also provides per-
care tax), you are enrolled in Medicare Part A. The payroll sonal and household services, amounts paid to the at-
tax paid for Medicare Part A isn't a medical expense. If tendant must be divided between the time spent perform-
you aren't covered under social security (or weren't a gov- ing household and personal services and the time spent
ernment employee who paid Medicare tax), you can enroll for nursing services. However, certain maintenance or
voluntarily in Medicare Part A. In this situation, you can in- personal care services provided for qualified long-term
clude the premiums you paid for Medicare Part A as a care can be included in medical expenses. See Mainte-
medical expense. nance and personal care services under Qualified
long-term care services, earlier. Additionally, certain ex-
Medicare Part B. Medicare Part B is a supplemental penses for household services or for the care of a qualify-
medical insurance. Premiums you pay for Medicare Part B ing individual incurred to allow you to work may qualify for
are a medical expense. Check the information you re- the child and dependent care credit. See Child and De-
ceived from the SSA to find out your premium. pendent Care Credit, later, and Pub. 503, Child and De-
Social security beneficiaries may quickly and easily ob- pendent Care Expenses.
tain various information from the SSA’s website with a my
Social Security account, including getting a replacement You can also include in medical expenses part of the
SSA 1099 or SSA 1042-S. For more information, see ‐ ‐ Ob- amount you pay for that attendant's meals. Divide the food
taining social security information, earlier. expense among the household members to find the cost
of the attendant's food. Then, divide that cost in the same
Medicare Part D. Medicare Part D is a voluntary pre-
manner as in the preceding paragraph. If you had to pay
scription drug insurance program for persons with Medi-
additional amounts for household upkeep because of the
care Part A or Part B. You can include as a medical ex-
attendant, you can include the extra amounts with your
pense premiums you pay for Medicare Part D.
medical expenses. This includes extra rent or utilities you
Prepaid insurance premiums. Insurance premiums you pay because you moved to a larger apartment to provide
pay before you are age 65 for medical care for yourself, space for the attendant.

Employment taxes. You can include as a medical ex-
pense social security tax, FUTA tax, Medicare tax, and

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state employment taxes you pay for a nurse, attendant, or
other person who provides medical care. If the attendant
also provides personal and household services, you can 5.
include as a medical expense only the amount of employ-
ment taxes paid for medical services as explained earlier
under Nursing Services. For information on employment Credits
tax responsibilities of household employers, see Pub.
926, Household Employer's Tax Guide. This chapter briefly discusses the credit for the elderly or
disabled, the child and dependent care credit, and the
Transportation earned income credit. You may be able to reduce your
federal income tax by claiming one or more of these cred-
You can include in medical expenses amounts paid for its. You may also be able to increase your refund by
transportation primarily for, and essential to, medical care. claiming the earned income credit.
Car expenses. You can include out-of-pocket expenses,
such as the cost of gas and oil, when you use a car for
medical reasons. You can't include depreciation, insur- Credit for the Elderly or the
ance, general repair, or maintenance expenses.
If you don't want to use your actual expenses for 2022, Disabled
you can use the standard medical mileage rate of 18
This section explains who qualifies for the credit for the
cents a mile for January 1 through June 30, 2022, and 22
elderly or the disabled and how to figure this credit. For
cents a mile from July 1 through December 31, 2022.
more information, see Pub. 524.
You can also include parking fees and tolls. You can
add these fees and tolls to your medical expenses You can take the credit only if you file Form 1040
whether you use actual expenses or use the standard ! or 1040-SR. You can't take the credit if you file
mileage rate. CAUTION Form 1040-NR.

You can also include:
Can You Take the Credit?
• Bus, taxi, train, or plane fares or ambulance service;
and You can take the credit for the elderly or the disabled if
• Transportation expenses of a nurse or other person you meet both of the following requirements.
who can give injections, medications, or other treat- • You are a qualified individual.
ment required by a patient who is traveling to get med-
ical care and is unable to travel alone. • Your income isn't more than certain limits.
Don't include transportation expenses if, for You can use Figure 5-A and Figure 5-B as guides to see if
you are eligible for the credit.
! purely personal reasons, you choose to travel to
CAUTION another city for an operation or other medical care
prescribed by your doctor.

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Figure 5-A. Are You a Qualified Individual?

                                                        START HERE
         Did you live with your                Yes Were you married at the end of the tax
         spouse at any time 1                      year?
         during the tax year?                  No
                                                                     No
                       Yes
                                            Yes
                                               No  Are you a U.S. citizen or resident alien?2
         Are you ling a joint
         return with your spouse?
                                                                       Yes
                       No
                                                   Were you 65 or older at the end of       Yes
         You aren’t   a qualied
         individual and can’t                      the tax year?
         take the credit for the                                       No
         elderly or the disabled.
                                                                                                You are a qualied
                                               No  Are you retired on permanent and             individual and may be able
                                                   total disability?                            to take the credit for the
                                                                                                elderly or the disabled
                                                                       Yes                      unless your income
                                                                                                exceeds the limits in
                                            Yes    Did you reach mandatory retirement           Figure 5-B. 
                                                   age before the  tax year? 3

                                                                       No

                                               No  Did you receive taxable disability        Yes
                                                   benets during the tax year?

1 However, you may be able to claim this credit even if you lived with your spouse during the rst 6 months of the tax year, as long as you qualify to le as head of 
household. You qualify to le as head of household if you are considered unmarried and meet certain other conditions. See Pub. 501 for more information.
2 If you were a nonresident alien at any time during the tax year and were married to a U.S. citizen or resident alien at the end of the tax year, see U.S. Citizen or
  Resident Alien under Qualiﬁed Individual. If you and your spouse choose to treat you as a U.S. resident alien, answer “Yes” to this question.
3 Mandatory retirement age is the age set by your employer at which you would have been required to retire, had you not become disabled.

Qualified Individual                                                          Exceptions.       You may be able to take the credit if you 
                                                                          are a nonresident alien who is married to a U.S. citizen or 
You  are  a  qualified  individual  for  this  credit  if  you  are  a    resident alien at the end of the tax year and you and your 
U.S.  citizen  or  resident  alien,  and  either  of  the  following      spouse choose to treat you as a U.S. resident alien. If you 
applies.                                                                  make that choice, both you and your spouse are taxed on 
                                                                          your worldwide income.
1. You were age 65 or older at the end of 2022.
                                                                              If you were a nonresident alien at the beginning of the 
2. You were under age 65 at the end of 2022 and all                       year and a resident alien at the end of the year, and you 
  three of the following statements are true.                             were married to a U.S. citizen or resident alien at the end 
                                                                          of the year, you may be able to choose to be treated as a 
  a. You retired on permanent and total disability (ex-
                                                                          U.S.  resident  alien  for  the  entire  year.  In  that  case,  you 
    plained later).
                                                                          may be allowed to take the credit.
  b. You received taxable disability income for 2022.                         For information on these choices, see chapter 1 of Pub. 
                                                                          519.
  c. On January 1, 2022, you had not reached manda-
    tory retirement age (defined later under Disability                   Married  persons.     Generally,  if  you  are  married  at  the 
    income).                                                              end of the tax year, you and your spouse must file a joint 
    Age 65.      You are considered to be age 65 on the                   return to take the credit. However, if you and your spouse 
TIP day before your 65th birthday. As a result, if you                    didn't  live  in  the  same  household  at  any  time  during  the 
    were  born  on  January  1,  1958,  you  are  consid-                 tax year, you can file either a joint return or separate re-
ered to be age 65 at the end of 2022.                                     turns and still take the credit.

                                                                          Head of household.    You can file as head of household 
U.S. citizen or resident alien.             You must be a U.S. citi-      and qualify to take the credit even if your spouse lived with 
zen or resident alien (or be treated as a resident alien) to              you during the first 6 months of the year if you meet cer-
take the credit. Generally, you can't take the credit if you              tain tests. See Pub. 524 and Pub. 501.
were a nonresident alien at any time during the tax year.

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Figure 5-B. Income Limits

THEN even if you qualify (see Figure 5-A), you CAN’T take the credit if:
OR the total of your nontaxable social
security and other nontaxable pension(s),
The amount on your Form 1040 or annuities, or disability income is equal to or
IF your filing status is... 1040-SR, line 11, is equal to or more than... more than...
single, head of household, or qualifying $17,500 $5,000
surviving spouse
married filing jointly and only one spouse $20,000 $5,000
qualifies in Figure 5-A
married filing jointly and both spouses qualify in $25,000 $7,500
Figure 5-A
married filing separately and you lived apart $12,500 $3,750
from your spouse for all of 2022

Under age 65. If you are under age 65 at the end of Physician's statement. If you are under age 65, you
2022, you can qualify for the credit only if you are retired must have your physician complete a statement certifying
on permanent and total disability and have taxable disabil- that you were permanently and totally disabled on the
ity income (discussed later under Disability income). You date you retired.
are considered to be under age 65 at the end of 2022 if You don't have to file this statement with your tax re-
you were born after January 1, 1958. You are retired on turn, but you must keep it for your records. The Instruc-
permanent and total disability if: tions for Schedule R (Form 1040) include a statement
your physician can complete and that you can keep for
• You were permanently and totally disabled when you
your records.
retired, and
• You retired on disability before the end of the tax year. Veterans. If the VA certifies that you are permanently
and totally disabled, you can substitute VA Form 21-0172,
Even if you don't retire formally, you may be considered Certification of Permanent and Total Disability, for the
retired on disability when you have stopped working be- physician's statement you are required to keep. VA Form
cause of your disability. If you retired on disability before 21-0172 must be signed by a person authorized by the VA
1977, and weren't permanently and totally disabled at the to do so. You can get this form from your local VA regional
time, you can qualify for the credit if you were permanently office.
and totally disabled on January 1, 1976, or January 1,
1977. Physician's statement obtained in earlier year. If
you got a physician's statement in an earlier year and, due
Permanent and total disability. You are permanently to your continued disability, you were unable to engage in
and totally disabled if you can't engage in any substantial any substantial gainful activity during 2022, you may not
gainful activity because of your physical or mental condi- need to get another physician's statement for 2022. For a
tion. A physician must certify that the condition has lasted detailed explanation of the conditions you must meet, see
or can be expected to last continuously for 12 months or the instructions for Schedule R (Form 1040), Part II. If you
more, or that the condition can be expected to result in meet the required conditions, you must check the box on
death. See Physician's statement, later. Schedule R (Form 1040), Part II, line 2.
Substantial gainful activity. Substantial gainful activ- If you checked Schedule R (Form 1040), Part I, box 4,
ity is the performance of significant duties over a reasona- 5, or 6, enter in the space above the box in Part II, line 2,
ble period of time while working for pay or profit, or in work the first name(s) of the spouse(s) for whom the box is
generally done for pay or profit. checked.
Full-time work (or part-time work done at the employ-
Disability income. If you are under age 65, you must
er's convenience) in a competitive work situation for at
also have taxable disability income to qualify for the credit.
least the minimum wage conclusively shows that you are
Disability income must meet the following two require-
able to engage in substantial gainful activity.
ments.
Substantial gainful activity isn't work you do to take
care of yourself or your home. It isn't unpaid work on hob- • It must be paid under your employer's accident or
bies, institutional therapy or training, school attendance, health plan or pension plan.
clubs, social programs, and similar activities. However,
• It must be included in your income as wages (or pay-
doing this kind of work may show that you are able to en-
ments in lieu of wages) for the time you are absent
gage in substantial gainful activity.
from work because of permanent and total disability.
The fact that you haven't worked or have been unem-
ployed for some time isn't, of itself, conclusive evidence Payments that aren't disability income. Any pay-
that you can't engage in substantial gainful activity. ment you receive from a plan that doesn't provide for disa-
bility retirement isn't disability income. Any lump-sum

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payment for accrued annual leave that you receive when part with federal funds. These programs include the fol-
you retire on disability is a salary payment and isn't disa- lowing.
bility income.
• Medicaid.
For purposes of the credit for the elderly or the disa-
bled, disability income doesn't include amounts you re- • SSI.
ceive after you reach mandatory retirement age. Manda- • Supplemental Nutrition Assistance Program (SNAP)
tory retirement age is the age set by your employer at (food stamps).
which you would have had to retire had you not become
disabled. • Low-income housing.
• Temporary Assistance for Needy Families (TANF).
Figuring the Credit In addition, when determining eligibility, the refund can't
be counted as a resource for at least 12 months after you
You can figure the credit yourself or allow the IRS to figure receive it. Check with your local benefit coordinator to find
it for you. out if your refund will affect your benefits.
Figuring the credit yourself. If you figure the credit
yourself, fill out the front of Schedule R (Form 1040). Next, Do You Qualify for the EIC?
fill out Schedule R (Form 1040), Part III.
Use Table 5-1 as a starting point to the rules you must
Credit figured for you. If you can take the credit and meet in order to qualify for the EIC. The specific rules you
you want the IRS to figure the credit for you, see Pub. 524 must meet depend on whether you have a qualifying child.
or the Instructions for Schedule R (Form 1040). If you If you have a qualifying child, the rules in Parts A, B,
•
want the IRS to figure your tax, see chapter 13 of Pub. 17, and D apply to you.
Your Federal Income Tax.
• If you don't have a qualifying child, the rules in Parts A,
C, and D apply to you.
Child and Dependent Care If you think you may qualify for the credit after reading all
the rules in each part, see Pub. 596, Earned Income
Credit Credit, for more details about the EIC. You can also find
information about the EIC in the instructions for Form
You may be able to claim this credit if you pay someone to 1040, line 27.
care for your dependent who is under age 13 or for your
The sections that follow provide additional information
spouse or dependent who isn't able to care for himself or
for some of the rules.
herself. The credit can be up to 35% of your expenses. To
qualify, you must pay these expenses so you can work or Adjusted gross income (AGI). Under Rule 1, you can't
look for work. claim the EIC unless your AGI is less than the applicable
If you claim this credit, you must include on your limit shown in Part A of Table 5-1. Your AGI is the amount
on line 11 of Form 1040 or 1040-SR.
! return the name and taxpayer identification num-
CAUTION ber (generally, the social security number) of each
qualifying person for whom care is provided. You must Social security number (SSN). Under Rule 2, you (and
also show on your return the name, address, and taxpayer your spouse if you are married filing jointly) must have a
identification number of the person(s) or organization(s) valid SSN issued by the SSA. Any qualifying child listed
that provided the care. If the correct information isn't on Schedule EIC must also have a valid SSN. (See Quali-
shown, the credit may be reduced or disallowed. fying child, later, if you have a qualifying child.)
An SSN is valid for the EIC unless it was issued after
For more information, see Pub. 503. the date of your 2022 return (including extensions) or it
was issued solely to apply for or receive a federally fun-
ded benefit and does not authorize you to work. An exam-
ple of a federally funded benefit is Medicaid.
Earned Income Credit (EIC)
Investment income. Under Rule 6, you can't claim the
The EIC is a refundable tax credit for certain people who EIC unless your investment income is $10,300 or less. If
work and have earned income under $59,187. The EIC is your investment income is more than $10,300, you can't
available to persons with or without a qualifying child. claim the credit. For most people, investment income is
the total of the following amounts.
Credit has no effect on certain welfare benefits. Any
refund you receive because of the EIC can't be counted • Taxable interest (line 2b of Form 1040 or 1040-SR).
as income when determining whether you or anyone else • Tax-exempt interest (line 2a of Form 1040 or
is eligible for benefits or assistance, or how much you or 1040-SR).
anyone else can receive, under any federal program or
under any state or local program financed in whole or in • Dividend income (line 3b of Form 1040 or 1040-SR).

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Table 5-1. Earned Income Credit (EIC) in a Nutshell

First, you must meet all the rules in this Second, you must meet all the rules in Third, you must meet
column. one of these columns, whichever applies. the rule in this column.
Part A. Part B. Part C. Part D.
Rules for Everyone Rules if You Have a Rules if You Don't Figuring and Claiming
Qualifying Child Have a Qualifying the EIC
Child
1. Your adjusted gross 2. You must have a 8. Your child must meet 11. You must meet 15. Your earned income
income (AGI) must be valid SSN by the due the relationship, age, the age must be less than:
less than: date of your 2022 residency, and joint requirements. •$53,057 ($59,187 for
•$53,057 ($59,187 for return (including return tests. 12. You can't be the married filing jointly) if you
married filing jointly) if extensions). 9. Your qualifying child dependent of have three or more
you have three or 3. You must meet can't be used by more another person. qualifying children who
more qualifying certain requirements than one person to 13. You can't be a have valid SSNs,
children who have if you are separated claim the EIC. qualifying child of •$49,399 ($55,529 for
valid SSNs, from your spouse and 10. You can't be a another person. married filing jointly) if you
•$49,399 ($55,529 for not filing a joint return. qualifying child of 14. You must have have two qualifying
married filing jointly) if 4. You must be a U.S. another person. lived in the United children who have valid
you have two citizen or resident States more than SSNs,
qualifying children who alien all year. half of the year. •$43,492 ($49,622 for
have valid SSNs, (However, see Pub. married filing jointly) if you
•$43,492 ($49,622 for 596 if your filing have one qualifying child
married filing jointly) if status is married filing who has a valid SSN, or
you have one jointly.) •$16,480 ($22,610 for
qualifying child who 5. You can't file Form married filing jointly) if you
has a valid SSN, or 2555 (relating to don't have a qualifying
•$16,480 ($22,610 for foreign earned child who has a valid SSN.
married filing jointly) if income).
you don't have a 6. Your investment
qualifying child who income must be
has a valid SSN. $10,300 or less.
7. You must have
earned income.

• Capital gain net income (line 7 of Form 1040 or your main home (even if you can exclude part or all of it).
1040-SR, if more than zero). Don't include any social security benefits unless (a) you
For more information about investment income, see are married filing a separate tax return and you lived with
Pub. 596. your spouse at any time in 2022, or (b) one-half of your
social security benefits plus your other gross income and
Earned income. Under Rule 7, you must have earned in- any tax-exempt interest is more than $25,000 ($32,000 if
come to claim the EIC. Under Rule 15, you can't claim the married filing jointly). If (a) or (b) applies, see the instruc-
EIC unless your earned income is less than the applicable tions for Form 1040, lines 6a and 6b, to figure the taxable
limit shown in Table 5-1, Part D. Earned income includes part of social security benefits you must include in gross
all of the following types of income. income.
1. Wages, salaries, tips, and other taxable employee Self-employed persons. If you are self-employed
pay. Employee pay is earned income only if it is taxa- and your net earnings are $400 or more, be sure to cor-
ble. Nontaxable employee pay, such as certain de- rectly fill out Schedule SE (Form 1040), Self-Employment
pendent care benefits and adoption benefits, isn't Tax, and pay the proper amount of self-employment tax. If
earned income. But there is an exception for nontaxa- you don't, you may not get all the credit to which you are
ble combat pay, which you can choose to include in entitled.
earned income. Disability benefits. If you retired on disability, taxable
2. Net earnings from self-employment. benefits you receive under your employer's disability re-
tirement plan are considered earned income until you
3. Gross income received as a statutory employee. reach minimum retirement age. Minimum retirement age
is generally the earliest age at which you could have re-
Gross income defined. Gross income means all income
ceived a pension or annuity if you weren't disabled. Begin-
you received in the form of money, goods, property, and
ning on the day after you reach minimum retirement age,
services that isn't exempt from tax, including any income
from sources outside the United States or from the sale of

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payments you receive are taxable as a pension and aren't 
considered earned income.
Payments you received from a disability insurance pol-             6.
icy that you paid the premiums for aren't earned income. It 
doesn't matter whether you have reached minimum retire-
ment  age.  If  this  policy  is  through  your  employer,  the    Estimated Tax
amount may be shown in box 12 of your Form W-2 with 
code J.                                                            Estimated tax is a method used to pay tax on income that 
                                                                   isn't subject to withholding. This income includes self-em-
Income  that  isn't  earned  income.   Examples  of  items         ployment income, interest, dividends, alimony, rent, gains 
that aren't earned income under Rule 7 include:                    from the sale of assets, prizes, and awards.
• Interest and dividends;                                          Income tax is generally withheld from pensions and annu-
• Pensions and annuities;                                          ity  payments  you  receive.  However,  if  the  tax  withheld 
                                                                   from your pension (or other) income isn't enough, you may 
• Social security and railroad retirement benefits (in-
                                                                   have  to  pay  estimated  tax.  If  you  don't  pay  enough  tax 
  cluding disability benefits—except for payments cov-
                                                                   through withholding, by making estimated tax payments, 
  ered under Disability benefits, earlier);
                                                                   or both, you may be charged a penalty.
• Alimony and child support;
• Welfare benefits;
• Workers' compensation benefits;                                  Who Must Make Estimated Tax 

• Unemployment compensation (insurance);                           Payments
• Nontaxable foster care payments; and
                                                                   If you had a tax liability for 2022, you may have to pay esti-
• Veterans' benefits, including VA rehabilitation pay-             mated tax for 2023. In most cases, you must pay estima-
  ments.                                                           ted tax for 2023 if both of the following apply.
Don't include any of these items in your earned income.            1. You expect to owe at least $1,000 in tax for 2023, af-
Workfare  payments.     Nontaxable  workfare  payments               ter subtracting your withholding and tax credits.
aren't  earned  income  for  the  EIC.  These  are  cash  pay-     2. You expect your withholding and tax credits to be less 
ments certain people receive from a state or local agency            than the smaller of:
that administers public assistance programs funded under 
the federal TANF program in return for certain work activi-        • 90% of the tax to be shown on your 2023 tax return, or
ties  such  as  (1)  work  experience  activities  (including  re- • 100% of the tax shown on your 2022 tax return. The 
modeling  or  repairing  public  housing)  if  sufficient  private   2022 tax return must cover all 12 months.
sector employment isn't available, or (2) community serv-
ice program activities.                                            If all of your income is subject to income tax withholding 
                                                                   and  enough  tax  is  withheld,  you  probably  don't  need  to 
Qualifying child. Under Rule 8, your child is a qualifying         make estimated tax payments.
child if your child meets four tests. The four tests are:          For more information on estimated tax, see Pub. 505.
1. Relationship,
2. Age,
3. Joint return, and

4. Residency.                                                      7.
The  four  tests  are  illustrated  in Figure  5-C.  See  Pub. 
596 for more information about each test.
                                                                   How To Get Tax Help
Figuring the EIC
                                                                   If you have questions about a tax issue; need help prepar-
To figure the amount of your credit, you have two choices.         ing your tax return; or want to download free publications, 
                                                                   forms, or instructions, go to IRS.gov to find resources that 
1. Have the IRS figure the EIC for you. If you want to do          can help you right away.
  this, see IRS Will Figure the EIC for You in Pub. 596.
                                                                   Preparing and filing your tax return.  After receiving all 
2. Figure the EIC yourself. If you want to do this, see 
                                                                   your wage and earnings statements (Forms W-2, W-2G, 
  How To Figure the EIC Yourself in Pub. 596.
                                                                   1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment 
                                                                   compensation statements (by mail or in a digital format) or 
                                                                   other  government  payment  statements  (Form  1099-G); 
                                                                   and  interest,  dividend,  and  retirement  statements  from 

                                                                     Chapter 6                   Estimated Tax    Page 31

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Figure 5-C. Tests for Qualifying Child
                                   A qualifying child for the EIC is a child 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, stepbrother, 
                     stepsister, or a descendant of any of them (for example, your 
                                                      niece or nephew)

                                                      AND

                                                      was...
                     Under age 19 at the end of 2022 and younger than you (or your spouse, if filing jointly)
                                                                    OR
                    Under age 24 at the end of 2022, a student, and younger than you (or your spouse, if filing jointly)
                                                                    OR
                     Permanently and totally disabled at any time during the year, regardless of age 

                                                      AND

                                                      who...
                                              Isn’t filing a joint return for 2022 
                    (or is filing a joint return for 2022 only to claim a refund of income tax withheld or estimated tax paid)

                                                      AND

                                                      who...
                                   Lived with you in the United States for more than half
                                                      of 2022.
                                         If the child didn't live with you for the
                                   required time, see Pub. 596 for more information.

banks and investment firms (Forms 1099), you have sev-                  VITA, download the free IRS2Go app, or call 
eral options to choose from to prepare and file your tax re-            800-906-9887 for information on free tax return prepa-
turn.  You  can  prepare  the  tax  return  yourself,  see  if  you     ration.
qualify for free tax preparation, or hire a tax professional to 
                                                                      • TCE. The Tax Counseling for the Elderly (TCE) pro-
prepare your return.
                                                                        gram offers free tax help for all taxpayers, particularly 
Free options for tax preparation.  Go to IRS.gov to see                 those who are 60 years of age and older. TCE volun-
your options for preparing and filing your return online or             teers specialize in answering questions about pen-
in your local community, if you qualify, which include the              sions and retirement-related issues unique to seniors. 
following.                                                              Go to IRS.gov/TCE, download the free IRS2Go app, 
                                                                        or call 888-227-7669 for information on free tax return 
• Free File. This program lets you prepare and file your                preparation.
  federal individual income tax return for free using 
  brand-name tax-preparation-and-filing software or                   • MilTax. Members of the U.S. Armed Forces and 
  Free File fillable forms. However, state tax preparation              qualified veterans may use MilTax, a free tax service 
  may not be available through Free File. Go to IRS.gov/                offered by the Department of Defense through Military 
  FreeFile to see if you qualify for free online federal tax            OneSource. For more information, go to 
  preparation, e-filing, and direct deposit or payment op-              MilitaryOneSource MilitaryOneSource.mil/MilTax (      ).
  tions.                                                                Also, the IRS offers Free Fillable Forms, which can 
                                                                        be  completed  online  and  then  filed  electronically  re-
• VITA. The Volunteer Income Tax Assistance (VITA)                      gardless of income.
  program offers free tax help to people with 
  low-to-moderate incomes, persons with disabilities, 
  and limited-English-speaking taxpayers who need 
  help preparing their own tax returns. Go to IRS.gov/

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Using online tools to help prepare your return. Go to relief available for individuals and families, small and large
IRS.gov/Tools for the following. businesses, and tax-exempt organizations.

• The Earned Income Tax Credit Assistant IRS.gov/ ( Employers can register to use Business Services On-
EITCAssistant) determines if you’re eligible for the line. The Social Security Administration (SSA) offers on-
earned income credit (EIC). line service at SSA.gov/employer for fast, free, and secure
• The Online EIN Application IRS.gov/EIN ( ) helps you online W-2 filing options to CPAs, accountants, enrolled
get an employer identification number (EIN) at no agents, and individuals who process Form W-2, Wage
cost. and Tax Statement, and Form W-2c, Corrected Wage and
Tax Statement.
• The Tax Withholding Estimator IRS.gov/W4app ( )
makes it easier for you to estimate the federal income IRS social media. Go to IRS.gov/SocialMedia to see the
tax you want your employer to withhold from your pay- various social media tools the IRS uses to share the latest
check. This is tax withholding. See how your withhold- information on tax changes, scam alerts, initiatives, prod-
ing affects your refund, take-home pay, or tax due. ucts, and services. At the IRS, privacy and security are
• The First-Time Homebuyer Credit Account Look-up our highest priority. We use these tools to share public in-
(IRS.gov/HomeBuyer) tool provides information on formation with you. Don’t post your social security number
your repayments and account balance. (SSN) or other confidential information on social media
sites. Always protect your identity when using any social
• The Sales Tax Deduction Calculator IRS.gov/ ( networking site.
SalesTax) figures the amount you can claim if you The following IRS YouTube channels provide short, in-
itemize deductions on Schedule A (Form 1040). formative videos on various tax-related topics in English,
Getting answers to your tax questions. On Spanish, and ASL.
IRS.gov, you can get up-to-date information on Youtube.com/irsvideos.
•
current events and changes in tax law.
• Youtube.com/irsvideosmultilingua.
• IRS.gov/Help: A variety of tools to help you get an-
swers to some of the most common tax questions. • Youtube.com/irsvideosASL.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that Watching IRS videos. The IRS Video portal
will ask you questions and, based on your input, pro- (IRSVideos.gov) contains video and audio presentations
vide answers on a number of tax law topics. for individuals, small businesses, and tax professionals.
• IRS.gov/Forms: Find forms, instructions, and publica-
Online tax information in other languages. You can
tions. You will find details on the most recent tax
find information on IRS.gov/MyLanguage if English isn’t
changes and interactive links to help you find answers
your native language.
to your questions.
• You may also be able to access tax law information in Free Over-the-Phone Interpreter (OPI) Service. The
your electronic filing software. IRS is committed to serving our multilingual customers by
offering OPI services. The OPI Service is a federally fun-
ded program and is available at Taxpayer Assistance
Need someone to prepare your tax return? There are Centers (TACs), other IRS offices, and every VITA/TCE
various types of tax return preparers, including enrolled return site. The OPI Service is accessible in more than
agents, certified public accountants (CPAs), accountants, 350 languages.
and many others who don’t have professional credentials.
If you choose to have someone prepare your tax return, Accessibility Helpline available for taxpayers with
choose that preparer wisely. A paid tax preparer is: disabilities. Taxpayers who need information about ac-
• Primarily responsible for the overall substantive accu- cessibility services can call 833-690-0598. The Accessi-
racy of your return, bility Helpline can answer questions related to current and
future accessibility products and services available in al-
• Required to sign the return, and ternative media formats (for example, braille, large print,
• Required to include their preparer tax identification audio, etc.). The Accessibility Helpline does not have ac-
number (PTIN). cess to your IRS account. For help with tax law, refunds,
or account-related issues, go to IRS.gov/LetUsHelp.
Although the tax preparer always signs the return, you're
ultimately responsible for providing all the information re-
quired for the preparer to accurately prepare your return.
Anyone paid to prepare tax returns for others should have
a thorough understanding of tax matters. For more infor-
mation on how to choose a tax preparer, go to Tips for
Choosing a Tax Preparer on IRS.gov.

Coronavirus. Go to IRS.gov/Coronavirus for links to in-
formation on the impact of the coronavirus, as well as tax

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Note. Form 9000, Alternative Media Preference, or 10 taxpayers use direct deposit to receive their refunds. If
Form 9000(SP) allows you to elect to receive certain types you don’t have a bank account, go to IRS.gov/
of written correspondence in the following formats. DirectDeposit for more information on where to find a
• Standard Print. bank or credit union that can open an account online.

• Large Print. Getting a transcript of your return. The quickest way
• Braille. to get a copy of your tax transcript is to go to IRS.gov/
Transcripts. Click on either “Get Transcript Online” or “Get
• Audio (MP3). Transcript by Mail” to order a free copy of your transcript.
• Plain Text File (TXT). If you prefer, you can order your transcript by calling
800-908-9946.
• Braille Ready File (BRF).
Reporting and resolving your tax-related identity
Disasters. Go to Disaster Assistance and Emergency
theft issues.
Relief for Individuals and Businesses to review the availa-
ble disaster tax relief. • Tax-related identity theft happens when someone
steals your personal information to commit tax fraud.
Getting tax forms and publications. Go to IRS.gov/ Your taxes can be affected if your SSN is used to file a
Forms to view, download, or print all the forms, instruc- fraudulent return or to claim a refund or credit.
tions, and publications you may need. Or, you can go to
IRS.gov/OrderForms to place an order. • The IRS doesn’t initiate contact with taxpayers by
email, text messages (including shortened links), tele-
Getting tax publications and instructions in eBook phone calls, or social media channels to request or
format. You can also download and view popular tax verify personal or financial information. This includes
publications and instructions (including the Instructions for requests for personal identification numbers (PINs),
Form 1040) on mobile devices as eBooks at IRS.gov/ passwords, or similar information for credit cards,
eBooks. banks, or other financial accounts.
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft
Note. IRS eBooks have been tested using Apple's Central webpage, for information on identity theft and
iBooks for iPad. Our eBooks haven’t been tested on other data security protection for taxpayers, tax professio-
dedicated eBook readers, and eBook functionality may nals, and businesses. If your SSN has been lost or
not operate as intended. stolen or you suspect you’re a victim of tax-related
Access your online account (individual taxpayers identity theft, you can learn what steps you should
only). Go to IRS.gov/Account to securely access infor- take.
mation about your federal tax account. • Get an Identity Protection PIN (IP PIN). IP PINs are
• View the amount you owe and a breakdown by tax six-digit numbers assigned to taxpayers to help pre-
year. vent the misuse of their SSNs on fraudulent federal in-
come tax returns. When you have an IP PIN, it pre-
• See payment plan details or apply for a new payment vents someone else from filing a tax return with your
plan. SSN. To learn more, go to IRS.gov/IPPIN.
• Make a payment or view 5 years of payment history
and any pending or scheduled payments. Ways to check on the status of your refund.
• Access your tax records, including key data from your • Go to IRS.gov/Refunds.
most recent tax return, and transcripts. • Download the official IRS2Go app to your mobile de-
• View digital copies of select notices from the IRS. vice to check your refund status.
• Approve or reject authorization requests from tax pro- • Call the automated refund hotline at 800-829-1954.
fessionals.
Note. The IRS can’t issue refunds before mid-Febru-
• View your address on file or manage your communi- ary for returns that claimed the EIC or the additional child
cation preferences. tax credit (ACTC). This applies to the entire refund, not
just the portion associated with these credits.
Tax Pro Account. This tool lets your tax professional
submit an authorization request to access your individual Making a tax payment. Go to IRS.gov/Payments for in-
taxpayer IRS online account. For more information, go to formation on how to make a payment using any of the fol-
IRS.gov/TaxProAccount. lowing options.
Using direct deposit. The fastest way to receive a tax • IRS Direct Pay: Pay your individual tax bill or estima-
refund is to file electronically and choose direct deposit, ted tax payment directly from your checking or sav-
which securely and electronically transfers your refund di- ings account at no cost to you.
rectly into your financial account. Direct deposit also • Debit or Credit Card: Choose an approved payment
avoids the possibility that your check could be lost, stolen, processor to pay online or by phone.
destroyed, or returned undeliverable to the IRS. Eight in

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• Electronic Funds Withdrawal: Schedule a payment Contacting your local IRS office. Keep in mind, many
when filing your federal taxes using tax return prepara- questions can be answered on IRS.gov without visiting an
tion software or through a tax professional. IRS TAC. Go to IRS.gov/LetUsHelp for the topics people
ask about most. If you still need help, IRS TACs provide
• Electronic Federal Tax Payment System: Best option
tax help when a tax issue can’t be handled online or by
for businesses. Enrollment is required.
phone. All TACs now provide service by appointment, so
• Check or Money Order: Mail your payment to the ad- you’ll know in advance that you can get the service you
dress listed on the notice or instructions. need without long wait times. Before you visit, go to
• Cash: You may be able to pay your taxes with cash at IRS.gov/TACLocator to find the nearest TAC and to check
a participating retail store. hours, available services, and appointment options. Or,
on the IRS2Go app, under the Stay Connected tab,
• Same-Day Wire: You may be able to do same-day choose the Contact Us option and click on “Local Offices.”
wire from your financial institution. Contact your finan-
cial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to The Taxpayer Advocate
ensure that the electronic payments you make online, by
phone, or from a mobile device using the IRS2Go app are Service (TAS) Is Here To Help
safe and secure. Paying electronically is quick, easy, and
faster than mailing in a check or money order. You

What if I can’t pay now? Go to IRS.gov/Payments for What Is TAS?
more information about your options.
• Apply for an online payment agreement IRS.gov/ ( TAS is an independent organization within the IRS that
OPA) to meet your tax obligation in monthly install- helps taxpayers and protects taxpayer rights. Their job is
ments if you can’t pay your taxes in full today. Once to ensure that every taxpayer is treated fairly and that you
you complete the online process, you will receive im- know and understand your rights under the Taxpayer Bill
mediate notification of whether your agreement has of Rights.
been approved.
• Use the Offer in Compromise Pre-Qualifier to see if How Can You Learn About Your Taxpayer
you can settle your tax debt for less than the full Rights?
amount you owe. For more information on the Offer in
Compromise program, go to IRS.gov/OIC. The Taxpayer Bill of Rights describes 10 basic rights that
all taxpayers have when dealing with the IRS. Go to
Filing an amended return. Go to IRS.gov/Form1040X TaxpayerAdvocate.IRS.gov to help you understand what
for information and updates. these rights mean to you and how they apply. These are
your rights. Know them. Use them.
Checking the status of your amended return. Go to
IRS.gov/WMAR to track the status of Form 1040-X amen- What Can TAS Do for You?
ded returns.
TAS can help you resolve problems that you can’t resolve
Note. It can take up to 3 weeks from the date you filed
with the IRS. And their service is free. If you qualify for
your amended return for it to show up in our system, and
their assistance, you will be assigned to one advocate
processing it can take up to 16 weeks.
who will work with you throughout the process and will do
Understanding an IRS notice or letter you’ve re- everything possible to resolve your issue. TAS can help
ceived. Go to IRS.gov/Notices to find additional informa- you if:
tion about responding to an IRS notice or letter. • Your problem is causing financial difficulty for you,
your family, or your business;
Note. You can use Schedule LEP (Form 1040), Re-
quest for Change in Language Preference, to state a pref- • You face (or your business is facing) an immediate
erence to receive notices, letters, or other written commu- threat of adverse action; or
nications from the IRS in an alternative language. You • You’ve tried repeatedly to contact the IRS but no one
may not immediately receive written communications in has responded, or the IRS hasn’t responded by the
the requested language. The IRS’s commitment to LEP date promised.
taxpayers is part of a multi-year timeline that is scheduled
to begin providing translations in 2023. You will continue
How Can You Reach TAS?
to receive communications, including notices and letters
in English until they are translated to your preferred lan-
TAS has offices in every state, the District of Columbia,
guage.
and Puerto Rico. Your local advocate’s number is in your
local directory and at TaxpayerAdvocate.IRS.gov/
Contact-Us. You can also call them at 877-777-4778.

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How Else Does TAS Help Taxpayers?                             to resolve tax problems with the IRS, such as audits, ap-
                                                              peals, and tax collection disputes. In addition, LITCs can 
TAS  works  to  resolve  large-scale  problems  that  affect  provide information about taxpayer rights and responsibili-
many taxpayers. If you know of one of these broad issues,     ties in different languages for individuals who speak Eng-
report it to them at IRS.gov/SAMS.                            lish as a second language. Services are offered for free or 
                                                              a  small  fee  for  eligible  taxpayers.  To  find  an  LITC  near 
TAS for Tax Professionals                                     you,  go  to TaxpayerAdvocate.IRS.gov/about-us/Low-
                                                              Income-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low 
TAS can provide a variety of information for tax professio-   Income Taxpayer Clinic List.
nals,  including  tax  law  updates  and  guidance,  TAS  pro-
grams,  and  ways  to  let  TAS  know  about  systemic  prob-
lems you’ve seen in your practice.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent in-
dividuals whose income is below a certain level and need 

                     To help us develop a more useful index, please let us know if you have ideas for index entries.
Index                See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
 
                                      Compensation:                           Dual-status taxpayers:
A                                     Compensatory damages           16        Standard deduction    21
Accelerated death benefits    16      For services  6
Accounting periods:                   Loss or disfigurement        16         E
 Change in, standard deduction not    Contributions:                          Early distributions, tax  10
   allowed  21                        Foreign employment           8          Earned income credit      29
Accrued leave payment:                Pension or annuity         8            Elderly:
 Disability retirement and 15         Coronavirus-related distribution     7   Credit for, persons who are               26
Adjusted gross income (AGI)   20      Cost, pension or annuity       8        Employment tax withholding                 2
Adjustments to income      20         Credits:                                Employment taxes   25
Age:                                  Child and dependent care        29      Endowment proceeds        16
 Elderly or disabled credit,          Earned income           29              Estimated tax   13 31, 
   requirements for     27            Elderly or disabled        26           Excess accumulation, tax on                11
 Standard deduction for age 65 or                                             Exclusion, gain on sale of home:
   older  21                          D                                        Expatriate tax, effect of 17
American Association of Retired       Death benefit, accelerated      16
 Persons (AARP)      3                                                        F
                                      Decedents  6
Annuities 8
                                      Standard deduction         21           Federal Employees:
Assistance (See Tax help)
                                      Deductions:                              Compensation Act (FECA) 
B                                     Generally  21                            payments       15
                                      Insurance premiums         25           Filing requirements:
Base amount, social security                                                   Decedents     6
 benefits 13                          Itemized   22
Benefits:                             Meals and lodging       24               General requirements     5
 Accident or health  16               Medical and dental         23            Surviving spouse 6
 Long-term care      15               Standard   21                           Final return for decedent:
 No-fault insurance  16               Dependents  6                            Standard deduction    21
 Sickness and injury    15            Standard deduction for         21       First-time homebuyer credit:
 Social security 12                   Disability 28                            Repayment     17
 Veterans' 19                         Credit for, permanently and totally     Form:
                                        disabled    26                         1099-R      10
Bequests  19
                                      Income     16 28,                        5329      11
Blind persons:
                                        Definition and exceptions, for         8853      17
 Standard deduction for    21              elderly and disabled credit     28  Schedule R    26
                                        Exclusions from, generally      19
C                                                                              W-4P       8
                                        Inclusions in, generally      19
Child and dependent care credit    29 Sale of home, for persons with          G
Children:                               (See (See Sale of home))              Gain on sale of home (See Sale of 
 Standard deduction for    21         Distributions, retirement plan     7     home)
Chronically ill persons  24           Drugs (See Medicines)                   General rule, pension or annuity             8
Chronically ill, defined 17                                                   Gifts 19

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                                    Married filing separately:
H                                     Itemized deductions:                 Q
Home care (See Nursing services)      One spouse has itemized so           Qualified retirement plan  10
Home improvements     23              other must as well      21
Home, sale of (See Sale of home)    Married taxpayers:                     R
Hospital services  24                 Age 65 or older spouse:              Railroad retirement benefits                  12
Household help    23                  Standard deduction    21             Repayments:
                                      Blind spouse:                         Social security benefits 13
I                                     Standard deduction    21             Reporting pension income                      10
Income:                             Meals and lodging expenses       24    Residence, sale of (See Sale of 
  Adjustments   20                  Medical expenses  23                    home)
  Disability payments, reporting    Medicare 25                            Retirement plans, distributions                  7
  for  15                             Benefits 19                          Returns:
  Earned income, defined   29       Medicines  25                           Decedent   6
  Gross, defined  5                   Imported 25                           Executors and administrators                   6
  Nontaxable, generally 6           Military retirement pay 12              Filing requirements 5
  Sale of home  17                  Minimum distributions   11              Surviving spouse  6
  Self-employment   6               Missing children 2                     Reverse mortgages    19
  Taxable, generally 6              Mortgage assistance payments        19
Individual retirement arrangement                                          S
  (IRA):                            N                                      Salaries (See Compensation)
  Adjustments to income   20        Nonperiodic distributions     10       Sale of home  18
  Contributions 20                  Nonqualified use  18                    Main home, definition of  17
  Deductible contribution 20        Nonresident aliens:                     Ownership and use test    17
  Distributions 7                     Standard deduction 21                 Surviving spouse  18
Inheritances 19                     Nontaxable income    19                Self-employed   6
Injury benefits 15                    Accident or health insurance         Short tax year:
Insurance:                            benefits  16                          Change in annual accounting 
  Accident and health 16 25,          Bequests  19                             period 21
  Benefits, long-term care 15         Generally 6                          Sickness and injury benefits                  15
  Benefits, no-fault insurance   16   Gifts 19                             Simplified method  8
  Life insurance proceeds     16      Inheritances 19                       How to use   9
  Proceeds paid after death   16      Mortgage assistance payments      19  Who can’t use  9
  Proceeds paid before death     16   No-fault insurance benefits    16     Who must use   8
Insurance premiums for retired        Nutrition program for elderly  19    Social security benefits  12
  public safety officers  11          Public assistance payments     19     lump-sum payments attributable to 
Itemized deductions   22              Sickness and injury benefits   15        prior years 20
  Married filing separately:          Veterans' benefits 19                Standard deduction   21
  One spouse has itemized        21   Winter energy use  19                 Age 65 or older 21
                                      Workers' compensation   15            Blind persons  21
L                                   Nursing home   25                       Dependents    21
Life insurance proceeds    16       Nursing services  25                    Final return of decedent  21
Long-term care  24                    Chronically ill individuals 24        Married filing separately:
  Chronically ill individuals 24    Nutrition program for elderly    19        One spouse has itemized                   21
  Maintenance and personal care                                            Starting date, annuity 8
  services   24                     O                                      State fund for victims of crime                 19
  Qualified insurance contracts  24 Other items 19                         Supplemental Security Income 
  Qualified services 24                                                     (SSI) benefits  20
Long-term care insurance      15    P                                      Surrender of Iife insurance                   16
Loss or disfigurement               Payments, estimated tax       31       Surviving spouse   6
  compensation    16                Pensions 8                             Surviving spouse, insurance                   16
Lump-sum death benefits       20    Pensions, disability 15                Survivors of retirees 10
Lump-sum distributions     10       Photographs, missing children       2
Lump-sum election, social           Prepaid insurance premiums       25    T
  security 14                                                              Tax:
                                    Preparer, paid 2
M                                   Preparing your return   3               Early distributions 10
                                    Profit-sharing plan  15                 Estimated  13 31, 
Maintenance and personal care                                               Excess accumulation   11
  services 24                       Public assistance payments       19
                                    Publications (See Tax help)            Tax counseling for the elderly 
                                                                            (TCE)  3
                                                                           Tax help  31
                                                                           Tax option, 10-year  10

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Tax return preparers 2                Filing requirements 5
Taxable income:                     Unemployment compensation   6   W
Generally 6                                                         Wages (See Compensation)
Taxation of benefits 12             V                               Winter energy use payments                           19
Terminally ill, defined 17          Veterans' benefits  19          Withholding:
Transportation expenses    26       Viatical settlement 16           Employment tax 2
                                    Victims of crime 19              Pensions and annuities 8
U                                   Volunteer income tax assistance Workers' compensation   15
U.S. citizen or resident alien:       (VITA) 3                      Worksheets, social security                          14
Eligibility for elderly or disabled Volunteer work 6
  credit:
  Exceptions for certain 
  nonresident aliens    27

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