WHAT'S NEW ON THE 2021 FORM 1040 (AND 1040-SR)?

 

Here is a review of what is new on the 2021 Form 1040, 2021 Form 1040-SR and 2021 Schedules 1, 2 and 3 –

FORM 1040 –

For 2021 the non-itemizer charitable deduction is “below the line” and NOT “above the line” (like 2020).  This deduction no longer reduces AGI, which is important to note because of the many tax items that are affected by AGI or a MAGI.

Line 10 is limited to “Adjustments from Schedule 1”.

Line 12 has 3 parts –

a. “Standard deduction or itemized deductions”
b.  “Charitable contributions if you take the standard deduction” 
c.  “Add lines 12a and 12b”

The line for entering the Earned Income Credit (EIC) – Line 27 – has been expanded to 3 parts –

a. The actual EIC claimed, with a box to check if you are 18-23 and qualify for the credit
b. “Nontaxable combat pay election” – the amount of pay using to calculate the credit
c. “Prior year (2019) earned income” – if you are using this number to calculate your 2021 credit

Line 28 is expanded to include “Refundable child tax credit”.

FORM 1040-SR –

The same changes made to the Form 1040 also appear on the Form 1040-SR.

SCHEDULES 1, 2 and 3 –

These schedules have all been expanded to specifically identify each applicable “other” item, and are now each two pages instead of one.

1. Line 8 of Part 1 of Schedule 1, for “Other income”, includes a detailed entry for each of the various individual items of other income.  Part II, for “Adjustments to income” removes the line for “Tuition and fees deduction” (no longer an allowable deduction for 2021) and adds a line that is “Reserved for future use” (#22), one for the “Archer MSA deduction” (#23) and one for “Other adjustments” (#24) that includes a detailed entry for each of the various other adjustments to income.

2. Part I of Schedule 2, for “Tax”, remains unchanged.  Part II, for “Other taxes”, is expanded to include a detailed entry for each of the various other taxes, surtaxes and charges.  Line 19 is where you would enter the payback of any overpayment of the advance Child Tax Credit payments from the reconciliation on Form 8812.   

3. Part I of Schedule 3, for “Nonrefundable Credits, expands Line 6 for “Other nonrefundable credits” to include a detailed entry for each of the various other nonrefundable credits.  Part II, for “Other Payments and Refundable Credits”, expands the Line 13 for “Other payments or refundable credits”, to include additional items of payment or credit.

You can go here to download these forms and schedules.  

Most of the other 2021 forms and schedules have also been issued.  We are waiting on the release of the 2021 Schedule A – which is being held up due to the change to the SALT limitation that may be included in the final Build Back Better legislation.   

TTFN