Changes to the State and Local Tax Deduction Worksheet in the 2025 Instructions for Form 1041

We revised the State and Local Tax Deduction worksheet. The purpose of the revision was to resolve an issue with the prior worksheet which may affect the deduction calculation for certain filers with adjusted gross income of more than $500,000. If your 2025 adjusted gross income was not more than $500,000 the changes to the worksheet will not impact the calculation of your state and local tax deduction.

We revised lines 4, 6, and 7 of the worksheet. We also added new line 8. Line 8 is now the last line of the worksheet and contains the amount of your state and local tax deduction.

If you have previously filed your 2025 Form 1041 and used the prior version of the State and Local Tax Deduction Worksheet to determine your state and local tax deduction, and doing a recalculation using this new State and Local Tax Deduction Worksheet results in a higher deduction, you should file an amended 2025 Form 1041.