Schedule 1-A, Additional Deductions: What to know about the new form

FS-2026-04, March 2026

IRS Schedule 1-A, Additional Deductions PDF was created to calculate and claim four new tax deductions enacted under the One, Big, Beautiful Bill. This schedule consolidates the new tax deductions in one place so taxpayers can determine their total additional deductions and reduce taxable income appropriately. Taxpayers attach Schedule 1-A to their Form 1040, 1040-SR, or 1040-NR when filing a 2025 tax return.

Who can use Schedule 1-A?

Anyone who qualifies for one or more of the new tax deductions established by the OBBB can use IRS Schedule 1-A. This generally includes:

• Workers who receive tips in occupations the IRS identified as “customarily and regularly receiving tips” and are reported on a Form W-2, Form 1099, another statement furnished to the individual, or on Form 4137 if the individual directly reports the tips
• Workers earning overtime pay that is reported on Form W-2, Form 1099, another statement furnished to the individual, or directly by the individual
• Taxpayers who took out a loan to purchase a new qualified vehicle for personal use that meets other eligibility criteria
• Seniors who are age 65 or older

Eligible taxpayers can claim the deductions on this schedule whether they itemize deductions or claim the standard deduction.

What deductions are on Schedule 1-A?

Schedule 1-A is used to claim the following tax deductions:

• Tip deduction (no tax on tips)

Workers who receive qualified tips may be able to deduct up to $25,000 of tip income for the year. ($25,000 per return for single filers and married couples filing jointly).

• Overtime deduction (no tax on overtime)

Workers who put in extra hours on the job may also be able to deduct up to $12,500 of qualified overtime compensation earned for the year. ($25,000 for married couples filing jointly)

• Car loan interest deduction (no tax on car loan interest)

Taxpayers who paid interest on vehicle loans may be eligible to deduct up to $10,000 for the year. To be eligible, the loan and the vehicle must meet certain requirements.

• Senior deduction (enhanced deduction for seniors)

If an individual is at least 65 years old, they may be able to deduct up to $6,000. If their spouse is also 65 or older, they can claim up to $12,000 and must file jointly.

All four deductions are subject to income phaseouts. For more information and eligibility requirements, see the One, Big, Beautiful Bill Provisions on IRS.gov.

Completing Schedule 1-A

Part I: Modified Adjusted Gross Income (MAGI) Amount

The deductions on Schedule 1-A depend on an individual’s income, and they phase out at higher income levels. Total modified adjusted gross income is calculated in Part I of Schedule 1-A.

Part II: No Tax on Tips

Part II should only be completed if the taxpayer received qualified tips. These tips must have been received in an occupation listed at IRS.gov/TippedOccupations and must be reported on a Form W-2, Form 1099, another statement furnished to the individual, or on Form 4137 if the individual directly reports the tips. The taxpayer and/or their spouse who received qualified tips must have a Social Security number valid for employment to claim the deduction. If married, they must file jointly to claim this deduction.

Part III: No Tax on Overtime

Part III should only be completed if the taxpayer received qualified overtime compensation as required under the Fair Labor Standards Act. Overtime pay must be reported on a Form W-2, Form 1099, another statement furnished to the individual, or directly by the individual. The taxpayer and/or their spouse who received the qualified overtime compensation must have a Social Security number valid for employment to claim this deduction. If married, they must file jointly to claim this deduction.

Part IV: No Tax on Car Loan Interest

Part IV should only be completed if the taxpayer or their spouse, if married filing jointly, paid or accrued qualified passenger vehicle loan interest. Column (iii) is the total QPVLI paid in 2025 less the amounts reported in column (ii). For interest to be QPVLI, it must be paid or accrued on a loan that generally meets all the following requirements.

• The loan was originated by the taxpayer after December 31, 2024.
• The proceeds from the loan were used to purchase an applicable passenger vehicle for personal use (lease payments do not qualify).
• The loan is secured by a first lien on the purchased vehicle.

The vehicle identification number of the purchased vehicle must be reported on Schedule 1-A.

Part V: Enhanced Deduction for Seniors

Part V should only be completed if the taxpayer and/or their spouse is 65 years or older. Each taxpayer who qualifies for the deduction must have a valid Social Security number. If married, they must file jointly to claim this deduction.

Part VI: Total Additional Deductions

Add total additional deductions and enter the amount on Part VI and on the Form 1040, line 13b.

For more information on claiming any of these additional deductions on Schedule 1-A, see the Form 1040 instructions PDF.