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What is IRS Form 1040 Schedule 5?

Updated for Tax Year 2020 / July 28, 2021 08:54 AM


OVERVIEW

This article will explain why you might need to complete a Form 1040 Schedule 5 and offer detailed guidance on how to fill one out.


For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.


 

If you previously used Form 1040 Schedule 5, you might be wondering what happened to that form as you file for taxes this year. Let's take a closer look at how Schedule 5 has changed and where to report the information that was previously filed there.

What is a Form 1040 Schedule?

The IRS Form 1040 is the document you use to file your annual income tax returns. This form is divided into sections for total income, Adjusted Gross Income (AGI), deductions, taxable income, calculated taxes, credits, and amount of refund or amount owed. The current Form 1040 is shorter than previous versions, but you can now complete and attach various schedules, or additional forms, to report specific income or deductions.

Schedules on are used if a taxpayer’s tax situation is more complex. This may be the case if they:

  • Owe additional taxes
  • Paid estimated taxes
  • Have an additional source of income
  • Claimed any tax credits or deductions

Common schedules include:

  • Schedule 1 for reporting additional income and adjustments to income
  • Schedule 2 for reporting additional taxes
  • Schedule 3 for reporting additional credits and payments
  • Schedule A for itemizing deductions

What was Form 1040 Schedule 5?

For tax years prior to 2018, you would use Form 1040 Schedule 5 (Form 8849) if you had paid and reported a tax on gasoline, diesel fuel, and/or kerosene under section 4081 of the Internal Revenue Code. Filing this form would allow you to claim a refundable credit of that tax if a prior section 4081 tax on that fuel had also been paid and reported to the government. If you filed for tax year 2017 or earlier, these Other Payments and Refundable Credits should be reported on the Form 1040 version for the same year, lines 65, 69, 70, 71, 72, and 73.

Then, due to the Tax Cuts and Jobs Act, Form 1040 Schedule 5 was revised. Those filing for tax year 2018 used (and still should use) Schedule 5 for Other Payments and Refundable Credits. You should attach this form to Form 1040 when filing for tax year 2018 and include any applicable credits in these areas:

  • Estimated tax payments for 2018
  • Net premium tax credit (attach Form 8962)
  • Amount paid with request for an extension to file
  • Excess Social Security and Tier 1 RRTA tax withheld
  • Credit for federal tax on fuels (attach Form 4136)
  • Credits from Form 2439 or Form 8885

Can I still claim refunds previously claimed on Schedule 5?

Good news! You can still claim the credits previously reported on older versions of Form 1040 Schedule 5, but you'll just do it in a different place. Beginning in tax year 2019, this form was combined with Schedule 3.

Form 1040 Schedule 3, Part II has 6 line items to claim refundable credits:

  1. Net premium tax credit (attach Form 8962)
  2. Amount paid with request for an extension to file
  3. Excess Social Security and Tier 1 RRTA tax withheld
  4. Credit for federal tax paid on fuels (attach Form 4136)
  5. Other Payments or Refundable Credits:
    • 12a. Form 2439
    • 12b. Qualified sick and family leave credits (attach Schedule H and Form 7202)
    • 12c. Health coverage tax credit (attach Form 8885)
    • 12d. Other
    • 12e. Deferral for certain Schedule H or SE Filers
    • 12f. Total of Lines 12a-12e
  1. Total of Lines 8-12f (Enter on Form 1040, Form 1040-SR, or Form 1040-NR, line 31)

What is a refundable credit?

If you qualify for a refundable tax credit, then you can expect to receive a refund check for any refund amount larger than your tax bill. For instance, if you owe a $500 tax bill, but you qualify for a refundable credit of $1,000, then you'll receive a $500 refund.

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