Additional Income and Income Adjustments General Guidelines
Use Schedule 1 to report income or income adjustments that cannot be immediately entered on Form 1040, 1040-SR, or 1040-NR. Additional income is reported on Part I of Schedule 1. The amount from line 10 of Schedule 1 is reported on line 8 of Form 1040, 1040-SR, or 1040-NR. Adjustments to income are recorded on Part II of Schedule 1.
The amount from line 26 is entered on line 10 of Form 1040, 1040-SR, or 1040-NR. Additional Income Line 1 Refunds, Credits, and Offsets of State and Local Income Taxes That Are Taxable If you either
- did not itemize deductions or
- decided to deduct state and local general sales taxes instead of state and local income taxes in the year you paid the tax, none of your refund is taxable. If you received a state or local income tax refund, credit, or offset in 2021, you may be required to declare this amount. If you did not get a Form 1099-G, you should contact the government agency that paid you. Your 2021 Form 1099-G may have been made accessible to you solely in an electronic format; therefore, you will need to get retrieval instructions from the agency. Even if you didn't receive Form 1099-G, report any taxable refund you got. If you choose to apply a portion or the entire return to your 2021 projected state or local income tax, the money allocated is considered to have been received in 2021.
If the refund was for taxes paid in 2020 and you completed Lines 2a and 2b Alimony, then the refund was for taxes paid in 2020. Using the State and Local Income Tax Return Worksheet in these instructions, if you deducted state and local income taxes on your 2020 Schedule A, you can determine if any portion of your refund is taxable. Exception. If any of the following apply, see Itemized Deduction Recoveries in Publication 525 instead of using the State and Local Income Tax Refund Worksheet in these instructions.
- You received a refund for a tax year other than 2020 in 2021.
- You got a refund in 2021 of an amount deducted or credit claimed in an earlier year, such as a general sales tax or real property tax return, that was not a federal income tax refund.
- You had taxable income on line 15 of your 2020 Form 1040 or 1040-SR, but no tax on line 16 due to the 0% tax rate on net capital gain and qualifying dividends in certain circumstances.
- Your 2020 state and local income tax refund exceeds your 2020 state and local income tax deduction less the amount you might have deducted as state and local general sales taxes for 2020.
- Your final payment of projected state or local income tax for 2020 was completed in 2021.
- In 2020, you owed alternative minimum tax.
- You were unable to use the full number of credits to which you were entitled in 2020 because the total credits exceeded the amount listed on line 16 of your 2020
Form 1040 or 1040-SR. In 2020, you may be claimed as a dependent by someone else. You got a refund due to a jointly filed state or local income tax return, but you will not be filing Form 1040 or 1040-SR jointly with the same individual in 2021.
Line 2a: Enter monies received as alimony or separate maintenance pursuant to a divorce or separation agreement executed on or before December 31, 2018, unless the agreement was modified after that date to specifically stipulate that alimony paid is not included in your income. If you signed a divorce or separation agreement after December 31, 2018, you do not have to include alimony payments in your income. If you are include alimony in your income, you must provide your social security number to the person who made the payments. If you do not, you may be required to pay a fine. For more details, see Pub. 504. If you are include alimony payments from many divorces or separations in your income, enter the total amount of alimony received at line 2a.
Line 2b Input the month and year of the original divorce or separation agreement that pertains to the alimony payment, if any, reported on line 2a. If you received alimony payments from multiple divorce or separation agreements, enter the month and year of the agreement from which you got the greatest income on line 2b. Include a statement detailing the month and year of any additional agreements.
Line 3 Business Income or Other Income (Loss) If you ran a sole proprietorship business or practiced a profession as a sole owner, enter your revenue and costs on Schedule C.
Line 4 Additional Gains or Losses (Losses) If you sold or traded assets utilized in a trade or business, refer to the Form 4797 Instructions.
Line 7 Unemployment Compensation You should receive a Form 1099-G indicating the entire amount of unemployment benefits paid to you in 2021 in box 1. Include this figure on line 7. If the amount indicated in box 1 of your Form(s) 1099-G is erroneous, report just the actual amount of unemployment compensation you received in 2021 on line 7. If you contributed to a government program for unemployment compensation or paid family leave and are not itemizing deductions, lower the amount you report on line 7 by the amount of your contributions. If you are itemizing deductions, go to the Form 1099-G guidelines. Your state may issue two Forms 1099-G for state unemployment benefits and the additional $300 per week in federal unemployment benefits associated with coronavirus relief. Include any unemployment compensation received on line 7. Subtract the amount you repaid from the total amount you got if you received an overpayment of unemployment benefits in 2021 and repaid any of it in 2021. Input the outcome on line 7. Also enter "Repaid" and the amount repaid on the line adjacent to line 7 that is dashed. If you repaid more than $3,000 of unemployment compensation that you reported in your gross income in a prior year in 2021, see Repayments in Publication 525 for information on how to report the payment. Your state may issue an electronic Form 1099-G if you earned unemployment compensation in 2021. Consult the webpage for unemployment compensation in your state for further information.
