Schedule 1-A (Form 1040): how to fill out the tips, overtime, car loan interest and senior deduction parts

What Schedule 1-A is for

The IRS created Schedule 1-A, titled Additional Deductions, for 2025 returns to hold the four deductions added by Public Law 119-21. They sit on their own schedule, apart from Schedule A, so filers can take them whether they itemize or not.

You file the Schedule 1-A form only if at least one part applies to you. A salaried office worker under 65 with no car loan on a new vehicle has nothing to enter and can skip it. For a summary of every change in the law, start with our One Big Beautiful Bill tax changes hub.

Who needs to file Schedule 1-A?

You need the form if any of these applied to you during the tax year. The tips, overtime and senior parts each require a valid Social Security number and, for married people, a joint return.

• You received qualified tips in an occupation on the Treasury list of tipped occupations.
• You were paid overtime that the Fair Labor Standards Act required, and you were not an exempt employee.
• You paid interest on a loan taken out after December 31, 2024, to buy a new personal-use vehicle with final assembly in the United States.
• You, or your spouse on a joint return, were 65 or older by the end of the year. For 2026 that means born before January 2, 1962.

Do I need Schedule 1-A if I itemize?

Yes, if you want these deductions. Itemizing on Schedule A does not replace Schedule 1-A; you file both. The only difference for older itemizers is that they lose the age 65 add-on to the standard deduction but keep the $6,000 senior amount.

Part by part walkthrough of the Schedule 1-A additional deductions

Part I: modified AGI (lines 1 to 3)

Line 1 is your AGI from Form 1040 line 11b. Lines 2a to 2d add back income you excluded from Puerto Rico, the foreign earned income and housing exclusions from Form 2555 lines 45 and 50, and American Samoa income from Form 4563 line 15. For most people, line 3 simply equals AGI. Every later part uses line 3 for its phaseout.

Part II: no tax on tips (lines 4 to 15)

Employees list each employer on line 4 with the tips in W-2 box 12 code TP or on Form 4137, taking the larger figure per employer. Self-employed tipped workers use line 6, where the tips from Forms 1099-NEC box 1b, 1099-MISC box 13a or 1099-K box 1c are limited to that business's net profit. Line 9 caps the total at $25,000, and lines 10 to 15 cut it by $100 for each full $1,000 of MAGI over $150,000 ($300,000 joint).

Part III: no tax on overtime (lines 16 to 27)

Line 16 lists each employer with the amount in W-2 box 12 code TT, and line 18 takes qualified overtime reported in Form 1099-NEC box 1d or Form 1099-MISC box 14. Line 21 applies the $12,500 or $25,000 joint cap. Lines 22 to 27 run the same $100 per full $1,000 phaseout as the tips part. Only the premium part of time-and-a-half counts; our overtime deduction calculator shows the math.

Part IV: car loan interest (lines 28 to 36)

Line 28 has room for two vehicles. For each, you enter the VIN, answer whether the original use began with you and whether final assembly was in the United States, and split interest between column (ii), already deducted on Schedule C, E or F, and column (iii), the rest. Lenders report certain 2026 interest on the new Form 1098-VLI, box 1. The cap is $10,000, and the phaseout is steeper: $200 per $1,000 of MAGI over $100,000 ($200,000 joint), with a partial thousand rounded up. Eligible vehicles are covered in our car loan interest deduction guide.

Part V: enhanced deduction for seniors (lines 37 to 43)

Lines 37 to 41 start from $6,000 and subtract 6% of MAGI above $75,000 ($150,000 joint). Line 42a is for you and line 42b for your spouse, each entered only if that person has a valid SSN and was born before January 2, 1962. Line 43 adds them. How this interacts with the regular deduction is explained in is the senior deduction on top of the standard deduction.

Part VI: total (line 44)

Line 44 adds lines 15, 27, 36 and 43. That single figure is what moves to your Form 1040.

Documents you will need for the Schedule 1-A form

Pull these together before you start. For 2026 returns, employers and payers report tips and overtime in new boxes, which our page on W-2 codes TT and TP explains.

Where the total goes on Form 1040

On the draft 2026 forms, the line 44 total goes on Form 1040, 1040-SR or 1040-NR line 13a. On 2025 returns it was line 38, carried to Form 1040 line 13b (1040-NR line 13c). It is subtracted after adjusted gross income, alongside the standard or itemized deduction, to reach taxable income. Because it is below the AGI line, it does not change AGI-based figures such as the income test for taxing Social Security benefits.

Full example: a two-income couple for 2026

A married couple filing jointly has MAGI of $168,000. She is a 41-year-old server with $9,200 of qualified tips. He is a 66-year-old machinist with $4,100 of overtime premium, and they paid $2,300 of interest on a new US-assembled pickup bought in 2025.

Their taxable income is MAGI of $168,000 minus the $33,850 standard deduction (including his $1,650 age add-on) minus $20,520, or $113,630. Without Schedule 1-A it would have been $134,150, all of the difference falling in the 22% bracket, a federal saving of $4,514.40.

Common Form 1040 Schedule 1-A mistakes

• Entering total overtime pay instead of the premium part.
• Filing married filing separately, which blocks the tips, overtime and senior deductions.
• Claiming the senior deduction for a spouse who turns 65 after the year ends.
• Deducting interest on a used car, a lease, or a vehicle assembled outside the US.
• Using AGI after the deduction for the phaseouts instead of line 3.
• Counting tips earned in a job that is not on the Treasury tipped occupation list.

If you left a Schedule 1-A deduction off a return that has already been filed, you can amend it with Form 1040-X within the normal amendment window. Changes coming for the 2027 filing year are tracked on tax changes 2027.