Schedule 1-A: The New Deductions Form
Schedule 1-A (Additional Deductions) is the IRS form created for the four new deductions enacted by the Working Families Tax Cuts law. You attach it to Form 1040, 1040-SR, or 1040-NR, and its total reduces your taxable income. All four deductions are available whether you itemize or take the standard deduction.
Source: IRS — Schedule 1-A, Additional Deductions · IRS — New and enhanced deductions for individuals
Car loan interest deduction
- Cap: $10,000 per year
- Income limit: Phase-out above $100,000 MAGI ($200,000 joint)
- Interest on a loan for a new, personal-use vehicle with final assembly in the United States. Not a calculator on this site yet — see the IRS guidance.
No tax on tips
- Cap: $25,000 per year
- Income limit: Phase-out above $150,000 MAGI ($300,000 joint)
- For workers in IRS-listed tipping occupations.
No tax on overtime
- Cap: $12,500 per return ($25,000 joint)
- Income limit: Phase-out above $150,000 MAGI ($300,000 joint)
- Only the FLSA-required premium portion of overtime pay.
Enhanced deduction for seniors
- Cap: $6,000 per eligible person
- Income limit: Phase-out above $75,000 MAGI ($150,000 joint), 6% rate
- Age 65+; stacks on top of the standard deduction.
Shared rules
- All four deductions apply to tax years 2025 through 2028.
- A valid SSN must be included on the return.
- Married taxpayers must file jointly to claim any of them.
- Phase-outs are based on modified adjusted gross income (MAGI).
- Each deduction reduces taxable income — the tax saving equals the deduction times your marginal rate.