Department of the Treasury

Internal Revenue Service

Publication 554

Cat. No. 15102R

Tax Guide

for Seniors

For use in preparing

2023 Returns

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Contents

What's New ............................... 1

Reminders ............................... 2

Introduction .............................. 2

Chapter 1. 2023 Filing Requirements .......... 5

General Requirements .................... 5

Chapter 2. Taxable and Nontaxable Income ..... 6

Compensation for Services ................. 6

Retirement Plan Distributions ................ 6

Social Security and Equivalent Railroad 

Retirement Benefits ................... 11

Sickness and Injury Benefits ............... 14

Life Insurance Proceeds .................. 15

Sale of Home .......................... 16

Reverse Mortgages ..................... 18

Other Items ........................... 18

Chapter 3. Adjustments to Income ........... 19

Individual Retirement Arrangement (IRA) 

Contributions and Deductions ............ 19

Chapter 4. Deductions .................... 20

Standard Deduction ..................... 20

Itemized Deductions ..................... 21

Chapter 5. Credits ........................ 26

Credit for the Elderly or the Disabled ......... 26

Child and Dependent Care Credit ........... 29

Earned Income Credit (EIC) ................ 29

Chapter 6. Estimated Tax .................. 32

Who Must Make Estimated Tax Payments ...... 32

Chapter 7. How To Get Tax Help ............. 32

Index .................................. 36

Future Developments

For the latest information about developments related to 

Pub. 554, such as legislation enacted after it was 

published, go to IRS.gov/Pub554.

What's New

Coronavirus-related distributions. The repayment period for a coronavirus-related distribution made on or after 

January 1, 2020, and before December 31, 2020, ended 

on December 31, 2023. If you made repayments in 2023 

and/or you didn’t completely repay the distribution by December 31, 2023, see Form 8915-F.

Increase in required minimum distribution age. If you 

reach age 72 in 2023 or later and have funds in a traditional IRA (including a SEP and SIMPLE IRA) the required 

beginning date for your first required minimum distribution 

Jan 18, 2024
is April 1 of the year following the year in which you turn 

73.

Exception to the 10% additional tax for early distributions. The exception to the 10% additional tax for early 

distributions include the following.

• Distributions from a retirement plan in connection with 

federally declared disasters.

• Distributions from a retirement plan made to someone 

who is terminally ill.

• Distributions to certain firefighters who meet the age 

or years of service requirement.

See Form 5329 and Pub 590-B for more information.

Standard deduction amount increased. For 2023, the 

standard deduction amount has been increased for all filers. The amounts are:

• Single or Married filing separately—$13,850.

• Married filing jointly or Qualifying surviving 

spouse—$27,700.

• Head of household—$20,800.

Alternative minimum tax exemption increased. The 

AMT exemption amount has increased to $81,300 

($126,500 if married filing jointly or qualifying surviving 

spouse; $63,250 if married filing separately).

Earned income credit. The maximum amount of income 

you can earn and still get the credit has changed. You may 

be able to take the credit if you earn less than:

• $17,640 ($24,210 if married filing jointly), don't have a 

qualifying child, and are at least 25 years old and under age 65;

• $46,560 ($53,120 if married filing jointly), and you 

have one qualifying child;

• $52,918 ($59,478 if married filing jointly), and you 

have two qualifying children; or

• $56,838 ($63,398 if married filing jointly), and you 

have three or more qualifying children.

For more information, see Earned Income Credit, later.

Standard mileage rate. For 2023, the standard mileage 

rate allowed for operating expenses for a car when you 

use it for medical reasons is 22 cents a mile.

Reminders

Qualified disaster tax relief. Special rules provide for 

tax-favored withdrawals and repayments from certain retirement plans for taxpayers who suffered economic loss 

as a result of a qualified disaster. See Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments, for more information.

Maximum age for traditional IRA contributions. The 

age restriction for contributions to a traditional IRA has 

been eliminated.

Form 1040-SR. Form 1040-SR, U.S. Tax Return for Seniors, was introduced in 2019. You can use this form if you 

are age 65 or older at the end of 2023. The form generally 

mirrors Form 1040. However, the Form 1040-SR has 

larger text and some helpful tips for older taxpayers. See 

the Instructions for Form 1040 for more information.

Tax return preparers. Choose your preparer carefully. If 

you pay someone to prepare your return, the preparer is 

required, under the law, to sign the return and fill in the 

other blanks in the Paid Preparer Use Only area of your return. Remember, however, that you are still responsible for 

the accuracy of every item entered on your return. If there 

is any underpayment, you are responsible for paying it, 

plus any interest and penalty that may be due.

Third party designee. You can check the “Yes” box in 

the Third Party Designee area of your return to authorize 

the IRS to discuss your return with your preparer, a friend, 

a family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the 

processing of your return. It also allows your designee to 

perform certain actions. See your income tax return instructions for details.

Employment tax withholding. Your wages are subject 

to withholding for income tax, social security tax, and 

Medicare tax even if you are receiving social security benefits.

Social security benefits information. Social security 

beneficiaries may quickly and easily obtain various information from the Social Security Administration’s (SSA’s) 

website with a my Social Security account, including getting a replacement SSA-1099 or SSA-1042S. For more information, go to SSA.gov/myaccount. See Obtaining social security information, later.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for 

Missing & Exploited Children® (NCMEC). Photographs of 

missing children selected by the Center may appear in 

this publication on pages that would otherwise be blank. 

You can help bring these children home by looking at the 

photographs and calling 800-THE-LOST (800-843-5678) 

if you recognize a child.

Introduction

The purpose of this publication is to provide a general 

overview of selected topics that are of interest to older taxpayers. This publication will help you determine if you 

need to file a return and, if so, what items to report on your 

return. Each topic is discussed only briefly, so you will find 

references to other free IRS publications that provide 

more detail on these topics if you need it.

Table I has a list of questions you may have about filing 

your federal tax return. To the right of each question is the 

location of the answer in this publication. Also, at the back 

of this publication, there is an index to help you search for 

the topic you need.

While most federal income tax laws apply equally to all 

taxpayers, regardless of age, there are some provisions 

2 Publication 554 (2023)
that give special treatment to older taxpayers. The following are some examples.

• Higher gross income threshold for filing. You must 

be age 65 or older at the end of the year to get this 

benefit. You are considered age 65 on the day before 

your 65th birthday. Therefore, you are considered age 

65 at the end of the year if your 65th birthday is on or 

before January 1 of the following year.

• Higher standard deduction. If you don't itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. 

You are considered age 65 at the end of the year if 

your 65th birthday is on or before January 1 of the following year.

• Credit for the elderly or the disabled. If you qualify, 

you may benefit from the credit for the elderly or the 

disabled. To determine if you qualify and how to figure 

this credit, see Credit for the Elderly or the Disabled, 

later.

Return preparation assistance. The IRS wants to make 

it easier for you to file your federal tax return. You may find 

it helpful to visit a Volunteer Income Tax Assistance 

(VITA), Tax Counseling for the Elderly (TCE), or American 

Association of Retired Persons (AARP) Tax-Aide site near 

you.

Volunteer Income Tax Assistance and Tax Counseling for the Elderly. These programs provide free help 

for low-income taxpayers and taxpayers age 60 or older to 

prepare and file their returns. For the VITA/TCE site nearest you, contact your local IRS office. For more information, see Preparing and filing your tax return. under How 

To Get Tax Help.

AARP Tax-Aide. AARP Foundation Tax-Aide offers 

free tax preparation and has more than 5,000 locations in 

neighborhood libraries, malls, banks, community centers, 

and senior centers annually during the filing season. Visit 

AARP.org/TaxAide or call 888-OUR-AARP 

(888-687-2277) for more information.

Comments and suggestions. We welcome your comments about this publication and suggestions for future 

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to the Internal Revenue 

Service, Tax Forms and Publications, 1111 Constitution 

Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will 

consider your comments and suggestions as we revise 

our tax forms, instructions, and publications. Don’t send 

tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions. If you have 

a tax question not answered by this publication or the How 

To Get Tax Help section at the end of this publication, go 

to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the search 

feature or viewing the categories listed.

Getting tax forms, instructions, and publications. 

Go to IRS.gov/Forms to download current and prior-year 

forms, instructions, and publications.

Ordering tax forms, instructions, and publications. 

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order 

prior-year forms and instructions. The IRS will process 

your order for forms and publications as soon as possible. 

Don’t resubmit requests you’ve already sent us. You can 

get forms and publications faster online.

Publication 554 (2023) 3
What You Should Know About Federal Taxes

Note. The following is a list of questions you may have about filling out your federal income tax return.

To the right of each question is the location of the answer in this publication.

What I Should Know Where To Find the Answer

Do I need to file a return? See chapter 1.

Is my income taxable or nontaxable?

If it is nontaxable, must I still report it?

See chapter 2.

How do I report benefits I received from the Social 

Security Administration or the Railroad Retirement Board?

Are these benefits taxable?

See Social Security and Equivalent Railroad Retirement 

Benefits in chapter 2.

Must I report the sale of my home?

If I had a gain, is any part of it taxable?

See Sale of Home in chapter 2.

What are some of the items that I can deduct to reduce my 

income?

See chapters 3 and 4.

How do I report the amounts I set aside for my IRA? See Individual Retirement Arrangement Contributions 

and Deductions in chapter 3.

Would it be better for me to claim the standard deduction 

or itemize my deductions?

See chapter 4.

What are some of the credits I can claim to reduce my tax? See chapter 5 for discussions on the credit for the elderly 

or the disabled, the child and dependent care credit, and 

the earned income credit.

Must I make estimated tax payments? See chapter 6.

How do I contact the IRS or get more information? See chapter 7.

Table I.

4 Publication 554 (2023)
1.

2023 Filing Requirements

If income tax was withheld from your pay, or if you qualify 

for a refundable credit (such as the earned income credit, 

the additional child tax credit, or the American opportunity 

credit), you should file a return to get a refund even if you 

aren't otherwise required to file a return.

Don't file a federal income tax return if you don't 

meet the filing requirements and aren't due a refund. If you need assistance to determine if you 

need to file a federal income tax return for 2023, go to 

IRS.gov/ITA and use the Interactive Tax Assistant (ITA).

General Requirements

If you are a U.S. citizen or resident alien, you must file a 

return if your gross income for the year was at least the 

amount shown on the appropriate line in Table 1-1. For 

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other filing requirements, see your tax return instructions 

or Pub. 501. If you were a nonresident alien at any time 

during the year, the filing requirements that apply to you 

may be different from those that apply to U.S. citizens. 

See Pub. 519.

Gross income. Gross income is all income you receive 

in the form of money, goods, property, and services that 

isn't exempt from tax. If you are married and live with your 

spouse in a community property state, half of any income 

defined by state law as community income may be considered yours. States with community property laws include 

Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A registered domestic partner in Nevada, Washington, or California must 

generally report half the combined community income of 

the individual and their domestic partner. For more information about community property, see Pub. 555.

For more information on what to include in gross income, see chapter 2.

Self-employed persons. If you are self-employed in a 

business that provides services (where the production, 

purchase, or sale of merchandise isn't an income-producing factor), gross income from that business is the gross 

receipts. If you are self-employed in a business involving 

2023 Filing Requirements Chart for Most Taxpayers

Note. You must file a return if your gross income was at least the amount shown in the last column.

IF your filing status is. . .

AND at the end of 2023

you were . . .*

THEN file a return if your gross 

income** was at least. . .

single under 65 $13,850

65 or older $15,700

head of household under 65 $20,800

65 or older $22,650

married filing jointly*** under 65 (both spouses) $27,700

65 or older (one spouse) $29,200

65 or older (both spouses) $30,700

married filing separately any age $5

qualifying surviving spouse under 65 $27,700

65 or older $29,200

*

If you were born before January 2, 1959, you are considered to be age 65 or older at the end of 2023. (If your spouse died 

in 2023 or if you are preparing a return for someone who died in 2023, see Pub. 501.)

** Gross income means all income you receive in the form of money, goods, property, and services that isn't exempt from 

tax, including any income from sources outside the United States or from the sale of your main home (even if you can 

exclude part or all of it). It also includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from a 

business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, don't 

reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9. Don't include any 

social security benefits unless (a) you are married filing separately and you lived with your spouse at any time in 2023, or 

(b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than 

$25,000 ($32,000* if married filing jointly). If (a) or (b) applies, see the Instructions for Form 1040 or Pub. 915 to figure the 

taxable part of social security benefits you must include in gross income.

*** If you didn't live with your spouse at the end of 2023 (or on the date your spouse died) and your gross income was at least 

$5, you must file a return regardless of your age.

Table 1-1.

Publication 554 (2023) Chapter 1 2023 Filing Requirements 5
manufacturing, merchandising, or mining, gross income 

from that business is the total sales minus the cost of 

goods sold. In either case, you must add any income from 

investments and from incidental or outside operations or 

sources. See Pub. 334.

Dependents. If you could be claimed as a dependent by 

another taxpayer (that is, you meet the dependency tests 

in Pub. 501), special filing requirements apply. See Pub. 

501.

Decedents

A personal representative of a decedent's estate can be 

an executor, administrator, or anyone who is in charge of 

the decedent's property.

If you are acting as the personal representative of a 

person who died during the year, you may have to file a final return for that decedent. You also have other duties, 

such as notifying the IRS that you are acting as the personal representative. Form 56, Notice Concerning Fiduciary Relationship, is available for this purpose.

When you file a return for the decedent, either as the 

personal representative or as the surviving spouse, you 

should enter “DECEASED,” the decedent's name, and the 

date of death across the top of the tax return.

If no personal representative has been appointed by 

the due date for filing the return, the surviving spouse (on 

a joint return) should sign the return and enter in the signature area “Filing as surviving spouse.”

For more information, see Pub. 559.

Surviving spouse. If you are the surviving spouse, the 

year your spouse died is the last year for which you can 

file a joint return with that spouse. After that, if you don't 

remarry, you must file as a qualifying surviving spouse, 

head of household, or single. For more information about 

each of these filing statuses, see Pub. 501.

If you remarry before the end of the year in which your 

spouse died, a final joint return with the deceased spouse 

can't be filed. You can, however, file a joint return with your 

new spouse. In that case, the filing status of your deceased spouse for their final return is married filing separately.

The level of income that requires you to file an income tax return changes when your filing status 

changes (see Table 1-1). Even if you and your deceased spouse weren't required to file a return for several 

years, you may have to file a return for tax years after the 

year of death. For example, if your filing status changes 

from filing jointly in 2022 to single in 2023 because of the 

death of your spouse, and your gross income is $17,500 

for both years, you must file a return for 2023 even though 

you didn't have to file a return for 2022.

CAUTION

!

2.

Taxable and Nontaxable 

Income

Generally, income is taxable unless it is specifically exempt (not taxed) by law. Your taxable income may include 

compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, 

gain from sales or exchanges of property, and business income of all kinds.

Under special provisions of the law, certain items are partially or fully exempt from tax. Provisions that are of special 

interest to older taxpayers are discussed in this chapter.

Compensation for Services

Generally, you must include in gross income everything 

you receive in payment for personal services. In addition 

to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options.

You don’t need to receive the compensation in cash for 

it to be taxable. Payments you receive in the form of goods 

or services must generally be included in gross income at 

their fair market value.

Volunteer work. Don't include in your gross income 

amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs.

• Retired Senior Volunteer Program (RSVP).

• Foster Grandparent Program.

• Senior Companion Program.

• Service Corps of Retired Executives (SCORE).

Unemployment compensation. You must include in income all unemployment compensation you or your 

spouse (if married filing jointly) received.

More information. See Pub. 525, for more detailed information on specific types of income.

Retirement Plan Distributions

This section summarizes the tax treatment of amounts you 

receive from traditional individual retirement arrangements 

(IRAs), employee pensions or annuities, and disability 

pensions or annuities. A traditional IRA is any IRA that 

isn't a Roth or SIMPLE IRA. A Roth IRA is an individual retirement plan that can be either an account or an annuity 

and features nondeductible contributions and tax-free 

6 Chapter 2 Taxable and Nontaxable Income Publication 554 (2023)
distributions. A SIMPLE IRA is a tax-favored retirement 

plan that certain small employers (including self-employed 

individuals) can set up for the benefit of their employees. 

More detailed information can be found in Pub. 590-A, 

Pub. 590-B, and Pub. 575.

Individual Retirement Arrangements 

(IRAs)

In general, distributions from a traditional IRA are taxable 

in the year you receive them. Exceptions to the general 

rule are rollovers, tax-free withdrawals of contributions, 

and the return of nondeductible contributions. These are 

discussed in Pub. 590-B.

If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. If you don't file Form 8606 with your return, you may have to pay a $50 penalty. Also, when you 

receive distributions from your traditional IRA, the 

amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were 

made.

Early distributions. Generally, early distributions are 

amounts distributed from your traditional IRA account or 

annuity before you are age 591/2, or amounts you receive 

when you cash in retirement bonds before you are age

591/2. You must include early distributions of taxable 

amounts in your gross income. These taxable amounts 

are also subject to an additional 10% tax unless the distribution qualifies for an exception. For purposes of the additional 10% tax, an IRA is a qualified retirement plan. For 

more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later.

After age 591/2. After you reach age 591/2, you can receive distributions from your traditional IRA without having 

to pay the 10% additional tax.

Required Distributions

General required minimum distribution rule. If you 

are the owner of a traditional IRA, you must generally receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 73 (72 for those 

individuals who reach age 72 before January 1, 2023). 

See When Must You Withdraw Assets? (Required Minimum Distributions) in Pub. 590-B. If distributions from your 

traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay an excise tax for 

that year on the amount not distributed as required. For 

more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. See also 

Excess Accumulations (Insufficient Distributions) in Pub. 

590-B.

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Pensions and Annuities

Generally, if you didn't pay any part of the cost of your employee pension or annuity, and your employer didn't withhold part of the cost of the contract from your pay while 

you worked, the amounts you receive each year are fully 

taxable. However, see Insurance Premiums for Retired 

Public Safety Officers, later.

If you paid part of the cost of your pension or annuity 

plan (see Cost, later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). This tax-free part of the payment is figured when your annuity starts and remains the 

same each year, even if the amount of the payment 

changes. The rest of each payment is taxable. However, 

see Insurance Premiums for Retired Public Safety Officers, later.

You figure the tax-free part of the payment using one of 

the following methods.

• Simplified Method. You must generally use this 

method if your annuity is paid under a qualified plan (a 

qualified employee plan, a qualified employee annuity, 

or a tax-sheltered annuity plan or contract). You can't 

use this method if your annuity is paid under a nonqualified plan.

• General Rule. You must use this method if your annuity is paid under a nonqualified plan. You generally 

can't use this method if your annuity is paid under a 

qualified plan.

Contact your employer or plan administrator to 

find out if your pension or annuity is paid under a 

qualified or nonqualified plan.

You determine which method to use when you first begin receiving your annuity, and you continue using it each 

year that you recover part of your cost.

Exclusion limit. If your annuity starting date is after 

1986, the total amount of annuity income you can exclude 

over the years as a recovery of the cost can't exceed your 

net cost (figured without any reduction for a refund feature). Any unrecovered cost at your (or the last annuitant's) death is allowed as an “other itemized deduction” 

on the final return of the decedent.

If you contributed to your pension or annuity and your 

annuity starting date is before 1987, you can continue to 

take your monthly exclusion for as long as you receive 

your annuity. If you chose a joint and survivor annuity, your 

survivor can continue to take the survivor's exclusion figured as of the annuity starting date. The total exclusion 

may be more than your cost.

Cost. Before you can figure how much, if any, of your 

pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). Your total cost in the plan includes everything that 

you paid. It also includes amounts your employer contributed that were taxable to you when paid. However, see 

Foreign employment contributions, later.

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Publication 554 (2023) Chapter 2 Taxable and Nontaxable Income 7
From this total cost, subtract any refunded premiums, 

rebates, dividends, unrepaid loans, or other tax-free 

amounts you received by the later of the annuity starting 

date or the date on which you received your first payment.

Annuity starting date. The annuity starting date is the 

later of the first day of the first period for which you received a payment from the plan or the date on which the 

plan's obligations became fixed.

The amount of your contributions to the plan may 

be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or 

Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that 

you receive.

Foreign employment contributions. If you worked 

abroad, certain amounts your employer paid into your retirement plan that weren't includible in your gross income 

may be considered part of your cost. For details, see Foreign employment contributions in Pub. 575.

Withholding. The payer of your pension, profit-sharing, 

stock bonus, annuity, or deferred compensation plan will 

withhold income tax on the taxable part of amounts paid to 

you. However, you can choose not to have tax withheld on 

the payments you receive, unless they are eligible rollover 

distributions. (These are distributions that are eligible for 

rollover treatment but aren't paid directly to another qualified retirement plan or to a traditional IRA.) See Withholding Tax and Estimated Tax and Rollovers in Pub. 575 for 

more information.

For payments other than eligible rollover distributions, 

you can tell the payer how much to withhold by filing a 

Form W-4P, Withholding Certificate for Periodic Pension or 

Annuity Payments.

Simplified Method. Under the Simplified Method, you 

figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly 

payments. For an annuity that is payable over the lives of 

the annuitants, this number is based on the annuitants' 

ages on the annuity starting date and is determined from a 

table. For any other annuity, this number is the number of 

monthly annuity payments under the contract.

Who must use the Simplified Method. You must use 

the Simplified Method if your annuity starting date is after 

November 18, 1996, and you meet both of the following 

conditions.

1. You receive your pension or annuity payments from a 

qualified plan.

2. On your annuity starting date, at least one of the following conditions applies to you.

a. You are under age 75.

b. You are entitled to less than 5 years of guaranteed 

payments.

If your annuity starting date is after July 1, 1986, and 

before November 19, 1996, and you previously chose to 

use the Simplified Method, you must continue to use it 

each year that you recover part of your cost. You could 

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have chosen to use the Simplified Method if your annuity 

is payable for your life (or the lives of you and your survivor 

annuitant) and you met both of the conditions listed 

above.

Guaranteed payments. Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of 

your investment) is payable even if you and any survivor 

annuitant don't live to receive the minimum. If the minimum amount is less than the total amount of the payments 

you are to receive, barring death, during the first 5 years 

after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments.

Who can't use the Simplified Method. You can't use 

the Simplified Method and must use the General Rule if 

you receive pension or annuity payments from:

• A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan; or

• A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 

years of guaranteed payments (defined above).

In addition, you had to use the General Rule for either 

circumstance described above if your annuity starting date 

is after July 1, 1986, and before November 19, 1996. You 

also had to use it for any fixed-period annuity. If you didn't 

have to use the General Rule, you could have chosen to 

use it. You also had to use the General Rule for payments 

from a qualified plan if your annuity starting date is before 

July 2, 1986, and you didn't qualify to use the Three-Year 

Rule.

If you had to use the General Rule (or chose to use it), 

you must continue to use it each year that you recover 

your cost.

Unless your annuity starting date was before 1987, 

once you have recovered all of your nontaxable investment, all of each remaining payment you receive is fully 

taxable. Once your remaining payments are fully taxable, 

there is no longer a concern with the General Rule or Simplified Method.

Complete information on the General Rule, including 

the actuarial tables you need, is contained in Pub. 939.

How to use the Simplified Method. Complete the 

Simplified Method Worksheet in the Instructions for Form 

1040 or Instructions for Form 1040-NR, or in Pub. 575 to 

figure your taxable annuity for 2023. Be sure to keep the 

completed worksheet; it will help you figure your taxable 

annuity next year.

To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for 

your annuity. How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. For 

this purpose, treat an annuity that is payable over the life 

of an annuitant as payable for that annuitant's life even if 

the annuity has a fixed-period feature or also provides a 

temporary annuity payable to the annuitant's child under 

age 25.

8 Chapter 2 Taxable and Nontaxable Income Publication 554 (2023)
You don't need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last 

year's worksheet to figure your taxable annuity. Instead, 

enter the amount from line 4 of last year's worksheet on 

line 4 of this year's worksheet.

Single-life annuity. If your annuity is payable for your 

life alone, use Table 1 at the bottom of the worksheet to 

determine the total number of expected monthly payments. Enter on line 3 the number shown for your age on 

your annuity starting date. This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996.

Multiple-lives annuity. If your annuity is payable for 

the lives of more than one annuitant, use Table 2 at the 

bottom of the worksheet to determine the total number of 

expected monthly payments. Enter on line 3 the number 

shown for the annuitants' combined ages on the annuity 

starting date. For an annuity payable to you as the primary 

annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. For an annuity that has no primary annuitant and is 

payable to you and others as survivor annuitants, combine 

the ages of the oldest and youngest annuitants. Don't treat 

as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death.

However, if your annuity starting date is before 1998, 

don't use Table 2 and don't combine the annuitants' ages. 

Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. This 

number will differ depending on whether your annuity 

starting date is before November 19, 1996, or after November 18, 1996.

Fixed-period annuities. If your annuity doesn't depend in whole or in part on anyone's life expectancy, the 

total number of expected monthly payments to enter on 

line 3 of the worksheet is the number of monthly annuity 

payments under the contract.

Line 6. The amount on line 6 should include all 

amounts that could have been recovered in prior years. If 

you didn't recover an amount in a prior year, you may be 

able to amend your returns for the affected years.

Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in 

later years.

Example. Kris Smith, age 65, began receiving retirement benefits in 2023, under a joint and survivor annuity. 

Kris' annuity starting date is January 1, 2023. The benefits 

are to be paid over the joint lives of Kris and their spouse, 

Pat, age 65. Kris had contributed $31,000 to a qualified 

plan and had received no distributions before the annuity 

starting date. Kris is to receive a retirement benefit of 

$1,200 a month, and Pat is to receive a monthly survivor 

benefit of $600 upon Kris' death.

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Kris must use the Simplified Method to figure their taxable annuity because the payments are from a qualified 

plan and they are under age 75. You can find a blank version of this worksheet in Pub. 575.

Survivors of retirees. Benefits paid to you as a survivor 

under a joint and survivor annuity must be included in your 

gross income in the same way the retiree would have included them in gross income.

If you receive a survivor annuity because of the death 

of a retiree who had reported the annuity under the 

Three-Year Rule, include the total received in your income. 

The retiree's cost has already been recovered tax free.

If the retiree was reporting the annuity payments under 

the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for 

in the contract. The resulting tax-free amount will then remain fixed. Any increases in the survivor annuity are fully 

taxable.

If the retiree was reporting the annuity payments under 

the Simplified Method, the part of each payment that is tax 

free is the same as the tax-free amount figured by the retiree at the annuity starting date. See Simplified Method, 

earlier.

How to report. If you file Form 1040, 1040-SR, or 

1040-NR, report your total annuity on line 5a, and the taxable part on line 5b. If your pension or annuity is fully taxable, enter it on line 5b. Don't make an entry on line 5a.

Example. You are a Form 1040 or 1040-SR filer and 

you received monthly payments totaling $1,200 (12 

months x $100) during 2023 from a pension plan that was 

completely financed by your employer. You had paid no 

tax on the payments that your employer made to the plan, 

and the payments weren't used to pay for accident, health, 

or long-term care insurance premiums (as discussed later 

under Insurance Premiums for Retired Public Safety Officers). The entire $1,200 is taxable. You include $1,200 

only on Form 1040 or 1040-SR, line 5b.

Joint return. If you file a joint return and you and your 

spouse each receive one or more pensions or annuities, 

report the total of the pensions and annuities on line 5a of 

Form 1040, 1040-SR, or 1040-NR. Report the total of the 

taxable parts on line 5b of Form 1040, 1040-SR, or 

1040-NR.

Form 1099-R. You should receive a Form 1099-R for 

your pension or annuity. Form 1099-R shows your pension 

or annuity for the year and any income tax withheld. You 

should receive a Form W-2, Wage and Tax Statement, if 

you receive distributions from certain nonqualified plans.

You must attach Forms 1099-R or Forms W-2 to 

your 2023 tax return if federal income tax was 

withheld. Generally, you should be sent these 

forms by January 31, 2024.

Nonperiodic Distributions

If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from 

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Publication 554 (2023) Chapter 2 Taxable and Nontaxable Income 9
your income as a recovery of your cost. Nonperiodic distributions include cash withdrawals, distributions of current 

earnings (dividends) on your investment, and certain 

loans. For information on how to figure the taxable amount 

of a nonperiodic distribution, see Taxation of Nonperiodic 

Payments in Pub. 575.

The taxable part of a nonperiodic distribution may 

be subject to an additional 10% tax. See Tax on 

Early Distributions, later.

Lump-sum distributions. If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before 

January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. The part from 

active participation in the plan before 1974 may qualify as 

capital gain subject to a 20% tax rate. The part from participation after 1973 (and any part from participation before 1974 that you don't report as capital gain) is ordinary 

income. You may be able to use the 10-year tax option 

(explained in Pub. 575) to figure tax on the ordinary income part.

Form 1099-R. If you receive a total distribution from a 

plan, you should receive a Form 1099-R. If the distribution 

qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is 

the ordinary income part.

More information. For more detailed information on 

lump-sum distributions, see Pub. 575 or Form 4972, Tax 

on Lump-Sum Distributions.

Tax on Early Distributions

Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you 

reach age 591/2 are subject to an additional tax of 10%. 

The tax applies to the taxable part of the distribution.

For this purpose, a qualified retirement plan is: 

• A qualified employee plan (including a qualified cash 

or deferred arrangement (CODA) under Internal Revenue Code section 401(k)),

• A qualified employee annuity plan,

• A tax-sheltered annuity plan (section 403(b) plan),

• An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a 

direct transfer or rollover from one of the other plans 

listed here or an IRA), or

• An IRA.

You may have to pay a 25%, rather than a 10%, 

additional tax if you receive distributions from a 

SIMPLE IRA before you are age 591/2. See Pub. 

560.

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General exceptions to tax. There are a number of exceptions to the early distribution tax. Some general exceptions include, but are not limited to, distributions:

• Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or 

life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a 

qualified retirement plan, the payments must begin after separation from service),

• Made because you are totally and permanently disabled,

• Made on or after the death of the plan participant or 

contract holder, or

• Made because you separated from service in or after 

the year you reach age 55.

Reporting tax. If you owe the tax on early distributions, 

you must generally attach Form 5329, Additional Taxes on 

Qualified Plans (Including IRAs) and Other Tax-Favored 

Accounts, to your 2023 income tax return. If you don’t 

have to file a 2023 income tax return, you may file Form 

5329 by itself. See the Instructions for Form 5329. In addition, you don’t have to attach Form 5329 to your income 

tax return if distribution code 1 (early distribution, no 

known exception) is correctly shown in box 7 of all your 

Forms 1099-R, and you owe the additional tax on each 

Form 1099-R. Instead, multiply the taxable part of the 

early distribution by 10% (0.10), or 25% (0.25) if applicable, and enter the result on Schedule 2 (Form 1040), 

line 8. See the instructions for Schedule 2 (Form 1040), 

line 8, for more information about reporting the early distribution tax.

Tax on Excess Accumulation

To make sure that most of your retirement benefits are 

paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive 

from qualified retirement plans must begin no later than 

your required beginning date. Unless the rule for 5% owners applies, this is generally April 1 of the year that follows 

the later of:

• The calendar year in which you reach age 73, or

• The calendar year in which you retire from employment with the employer maintaining the plan.

However, your plan may require you to begin to receive 

payments by April 1 of the year that follows the year in 

which you reach age 73, even if you haven't retired.

For this purpose, a qualified retirement plan includes:

• A qualified employee plan,

• A qualified employee annuity plan,

• An eligible section 457 deferred compensation plan,

• A tax-sheltered annuity plan (section 403(b) plan) (for 

benefits accruing after 1986), or

• An IRA.

10 Chapter 2 Taxable and Nontaxable Income Publication 554 (2023)
An excess accumulation is the undistributed remainder of the required minimum distribution that 

was left in your qualified retirement plan.

5% owners. If you are a 5% owner, see Pub. 575 for 

more information on distribution dates.

Amount of tax. If you don't receive the required minimum 

distribution, you may be subject to an additional tax. See 

Pub. 590-B and the Instructions for Form 5329 for more information.

Form 5329. You must file a Form 5329 if you owe a tax 

because you didn't receive a minimum required distribution from your qualified retirement plan.

Additional information. For more detailed information 

on the tax on excess accumulation, see Pub. 575.

Insurance Premiums for Retired Public 

Safety Officers

If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew who is retired because of 

disability or because you reached normal retirement age), 

you can elect to exclude from income distributions made 

from your eligible retirement plan that are used to pay the 

premiums for coverage by an accident or health plan or a 

long-term care insurance contract. The premiums can be 

for coverage for you, your spouse, or dependent(s). The 

distribution must be from the plan maintained by the employer from which you retired as a public safety officer. 

The distribution can be made directly from the plan to the 

provider of the accident or health plan or long-term care 

insurance contract, or the distribution can be made to you 

to pay to the provider of the accident or health plan or 

long-term care insurance contract. You can exclude from 

income the lesser of the amount of the premiums paid or 

$3,000. You can make this election only for amounts that 

would otherwise be included in your income. The amount 

excluded from your income can't be used to claim a medical expense deduction.

An eligible retirement plan is a governmental plan that 

is a:

• Qualified trust,

• Section 403(a) plan,

• Section 403(b) annuity, or

• Section 457(b) plan.

If you received a distribution from your eligible retirement plan, and you used part of that distribution to pay premiums for an accident or health 

plan or long-term care insurance contract, you can still exclude from income only the lesser of the amount of the 

premiums paid or $3,000. The rest of the distribution is 

taxable to you and should be reported as follows.

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If you make this election, reduce the otherwise taxable 

amount of your pension or annuity by the amount excluded. The taxable amount shown in box 2a of any Form 

1099-R that you receive doesn't reflect the exclusion. Report your total distributions on Form 1040, 1040-SR, or 

1040-NR, line 5a. Report the taxable amount on Form 

1040, 1040-SR, or 1040-NR, line 5b. Enter “PSO” next to 

the appropriate line on which you report the taxable 

amount.

Railroad Retirement Benefits

Benefits paid under the Railroad Retirement Act fall into 

two categories. These categories are treated differently for 

income tax purposes.

Social security equivalent benefits. The first category 

is the amount of tier 1 railroad retirement benefits that 

equals the social security benefit that a railroad employee 

or beneficiary would have been entitled to receive under 

the social security system. This part of the tier 1 benefit is 

the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. (See Social Security and Equivalent Railroad Retirement Benefits, 

later.)

Non-social security equivalent benefits. The second 

category contains the rest of the tier 1 benefits, called the 

non-social security equivalent benefit (NSSEB). It also 

contains any tier 2 benefit, vested dual benefit (VDB), and 

supplemental annuity benefit. This category of benefits is 

treated as an amount received from a qualified employee 

plan. This allows for the tax-free (nontaxable) recovery of 

employee contributions from the tier 2 benefits and the 

NSSEB part of the tier 1 benefits. VDBs and supplemental 

annuity benefits are non-contributory pensions and are 

fully taxable.

More information. For more information about railroad 

retirement benefits, see Pub. 575.

Military Retirement Pay

Military retirement pay based on age or length of service 

is taxable and must be included in income as a pension 

on Form 1040, 1040-SR, or 1040-NR, lines 5a and 5b. 

But, certain military and government disability pensions 

that are based on a percentage of disability from active 

service in the U.S. Armed Forces of any country generally 

aren't taxable. For more information, including information 

about veterans' benefits and insurance, see Pub. 525.

Social Security and Equivalent 

Railroad Retirement Benefits

This discussion explains the federal income tax rules for 

social security benefits and equivalent tier 1 railroad retirement benefits.

Publication 554 (2023) Chapter 2 Taxable and Nontaxable Income 11
Social security benefits include monthly retirement, survivor, and disability benefits. They don't include supplemental security income (SSI) payments, which aren't taxable.

Equivalent tier 1 railroad retirement benefits are the part 

of tier 1 benefits that a railroad employee or beneficiary 

would have been entitled to receive under the social security system. They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits.

If you received these benefits during 2023, you should 

have received a Form SSA-1099 or Form RRB-1099 

(Form SSA-1042S or Form RRB-1042S if you are a nonresident alien) showing the amount of the benefits.

Social Security Information

Obtaining social security information. Social security 

beneficiaries may quickly and easily obtain various information from the SSA's website with a my Social Security 

account to:

• Keep track of your earnings and verify them every 

year,

• Get an estimate of your future benefits if you are still 

working,

• Get a letter with proof of your benefits if you currently 

receive them,

• Change your address,

• Start or change your direct deposit,

• Get a replacement Medicare card, and

• Get a replacement SSA-1099 or SSA-1042S for the 

tax season.

For more information and to set up an account, go to 

SSA.gov/myaccount.

Are Any of Your Benefits Taxable?

Note. When the term “benefits” is used in this section, 

it applies to both social security benefits and the SSEB 

portion of tier 1 railroad retirement benefits.

To find out whether any of your benefits may be taxable, 

compare the base amount for your filing status (explained 

later) with the total of:

• One-half of your benefits; plus

• All your other income, including tax-exempt interest.

When making this comparison, don't reduce your other 

income by any exclusions for:

• Interest from qualified U.S. savings bonds,

• Employer-provided adoption benefits,

• Foreign earned income or foreign housing, or

• Income earned in American Samoa or Puerto Rico by 

bona fide residents.

Figuring total income. To figure the total of one-half of 

your benefits plus your other income, use Worksheet 2-A. 

If that total amount is more than your base amount, part of 

your benefits may be taxable.

If you are married and file a joint return for 2023, you 

and your spouse must combine your incomes and your 

benefits to figure whether any of your combined benefits 

are taxable. Even if your spouse didn't receive any benefits, you must add your spouse's income to yours to figure 

whether any of your benefits are taxable.

If the only income you received during 2023 was 

your social security or the SSEB portion of tier 1 

railroad retirement benefits, your benefits generally aren't taxable and you probably don't have to file a return. If you have income in addition to your benefits, you 

may have to file a return even if none of your benefits are 

taxable.

Base Amount

Your base amount is:

• $25,000 if you are single, head of household, or qualifying surviving spouse;

• $25,000 if you are married filing separately and lived 

apart from your spouse for all of 2023;

• $32,000 if you are married filing jointly; or

• $0 if you are married filing separately and lived with 

your spouse at any time during 2023.

Repayment of Benefits

Any repayment of benefits you made during 2023 must be 

subtracted from the gross benefits you received in 2023. It 

doesn't matter whether the repayment was for a benefit 

you received in 2023 or in an earlier year. If you repaid 

more than the gross benefits you received in 2023, see 

Repayments More Than Gross Benefits, later.

Your gross benefits are shown in box 3 of Form 

SSA-1099 or Form RRB-1099. Your repayments are 

shown in box 4. The amount in box 5 shows your net benefits for 2023 (box 3 minus box 4). Use the amount in 

box 5 to figure whether any of your benefits are taxable.

Tax Withholding and Estimated Tax

You can choose to have federal income tax withheld from 

your social security and/or the SSEB portion of your tier 1 

railroad retirement benefits. If you choose to do this, you 

must complete a Form W-4V, Voluntary Withholding Request.

If you don't choose to have income tax withheld, you 

may have to request additional withholding from other income, or pay estimated tax during the year. For details, 

see Pub. 505, or the Instructions for Form 1040-ES, Estimated Tax for Individuals.

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12 Chapter 2 Taxable and Nontaxable Income Publication 554 (2023)
How Much Is Taxable?

If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. Generally, the higher that total amount, the greater 

the taxable part of your benefits.

Maximum taxable part. The taxable part of your benefits 

usually can't be more than 50%. However, up to 85% of 

your benefits can be taxable if either of the following situations applies to you.

• The total of one-half of your benefits and all your other 

income is more than $34,000 ($44,000 if you are married filing jointly).

• You are married filing separately and lived with your 

spouse at any time during 2023.

If you are a nonresident alien, 85% of your benefits are 

taxable. However, this income is exempt under some tax 

treaties.

Which worksheet to use. A worksheet to figure your 

taxable benefits is in the Instructions for Form 1040. However, you will need to use a different worksheet(s) if any of 

the following situations applies to you.

1. You contributed to a traditional IRA and you or your 

spouse were covered by a retirement plan at work. In 

this situation, you must use the special worksheets in 

Pub. 590-A to figure both your IRA deduction and your 

taxable benefits.

2. Situation (1) doesn't apply and you take one or more 

of the following exclusions.

• Interest from qualified U.S. savings bonds (Form 

8815, Exclusion of Interests From Series EE and I 

U.S. Savings Bonds Issued After 1989).

• Employer-provided adoption benefits (Form 8839, 

Qualified Adoption Expenses).

• Foreign earned income or housing (Form 2555, 

Foreign Earned Income).

• Income earned in American Samoa (Form 4563, 

Exclusion of Income for Bona Fide Residents of 

American Samoa) or Puerto Rico by bona fide 

residents.

In these situations, you must use Worksheet 1 in 

Pub. 915, to figure your taxable benefits.

3. You received a lump-sum payment for an earlier year. 

In this situation, also complete Worksheet 2 or 3 and 

Worksheet 4 in Pub. 915. See Lump-Sum Election, 

later.

How To Report Your Benefits

If part of your benefits is taxable, you must use Form 1040, 

1040-SR, or 1040-NR.

Worksheet 2-A. A Quick Way To Check if Your Benefits May 

Be Taxable Keep for Your Records

A. Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include 

the full amount of any lump-sum benefit payments received in 2023, for 2023 and 

earlier years. (If you received more than one form, combine the amounts from box 5 

and enter the total.) ............................................................ A. 

Note. If the amount on line A is zero or less, stop here; none of your benefits are 

taxable this year.

B. Enter one-half of the amount on line A ............................................. B. 

C. Enter your taxable pensions, wages, interest, dividends, and other taxable income ........ C. 

D. Enter any tax-exempt interest income (such as interest on municipal bonds) plus any 

exclusions from income for:

• Interest from qualified U.S. savings bonds,

• Employer-provided adoption benefits,

• Foreign earned income or foreign housing, or

• Income earned in American Samoa or Puerto Rico by bona fide residents .............. D.

E. Add lines B, C, and D and enter the total ........................................... E.

F. If you are:

• Married filing jointly, enter $32,000;

• Single, head of household, qualifying surviving spouse, or married filing separately and 

you lived apart from your spouse for all of 2023, enter $25,000; or

• Married filing separately and you lived with your spouse at any time during 2023,

enter -0- ................................................................... F.

G. Is the amount on line F less than or equal to the amount on line E?

No. None of your benefits are taxable this year.

Yes. Some of your benefits may be taxable. To figure how much of your benefits 

are taxable, see Which worksheet to use under How Much Is Taxable.

Publication 554 (2023) Chapter 2 Taxable and Nontaxable Income 13
Reporting on Form 1040 or 1040-SR. Report your net 

benefits (the amount in box 5 of your Form SSA-1099 or 

Form RRB-1099) on line 6a and the taxable part on 

line 6b. If you are married filing separately and you lived 

apart from your spouse for all of 2023, also enter “D” to the 

right of the word “benefits” on line 6a.

Reporting on Form 1040-NR. Report 85% of the total 

amount of your benefits (box 5 of your Form SSA-1042S 

or Form RRB-1042S) in the appropriate column of Schedule NEC (Form 1040-NR), line 8.

Benefits not taxable. Report your net benefits (the 

amount in box 5 of your Form SSA-1099 or Form 

RRB-1099) on Form 1040 or 1040-SR, line 6a. Enter -0- 

on Form 1040 or 1040-SR, line 6b. If you are married filing 

separately and you lived apart from your spouse for all of 

2023, also enter “D” to the right of the word “benefits” on 

Form 1040 or 1040-SR, line 6a.

Lump-Sum Election

You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2023 in your 2023 income, even if the payment includes benefits for an earlier 

year.

This type of lump-sum benefit payment shouldn't 

be confused with the lump-sum death benefit that 

both the SSA and Railroad Retirement Board 

(RRB) pay to many of their beneficiaries. No part of the 

lump-sum death benefit is subject to tax. For more information about the lump-sum death benefit, visit the SSA 

website at SSA.gov, and use keyword: “death benefit.”

Generally, you use your 2023 income to figure the taxable part of the total benefits received in 2023. However, 

you may be able to figure the taxable part of a lump-sum 

payment for an earlier year separately, using your income 

for the earlier year. You can elect this method if it lowers 

your taxable benefits. See Pub. 915 for more information.

Repayments More Than Gross 

Benefits

In some situations, your Form SSA-1099 or Form 

RRB-1099 will show that the total benefits you repaid 

(box 4) are more than the gross benefits (box 3) you received. If this occurred, your net benefits in box 5 will be a 

negative figure (a figure in parentheses) and none of your 

benefits will be taxable. If you receive more than one form, 

a negative figure in box 5 of one form is used to offset a 

positive figure in box 5 of another form for that same year.

If you have any questions about this negative figure, 

contact your local SSA office or your local U.S. RRB field 

office.

Joint return. If you and your spouse file a joint return, 

and your Form SSA-1099 or RRB-1099 has a negative figure in box 5 but your spouse's doesn't, subtract the box 5 

amount on your form from the box 5 amount on your spouTIP

se's form. You do this to get your net benefits when figuring if your combined benefits are taxable.

Repayment of benefits received in an earlier year. If 

the total amount shown in box 5 of all of your Forms 

SSA-1099 and RRB-1099 is a negative figure, you may be 

able to take an itemized deduction for the part of this negative figure that represents benefits you included in gross 

income in an earlier year.

The deduction must be more than $3,000 and you have 

to follow some special instructions. See Pub. 915 for those 

instructions.

Sickness and Injury Benefits

Generally, you must report as income any amount you receive for personal injury or sickness through an accident 

or health plan that is paid for by your employer. If both you 

and your employer pay for the plan, only the amount you 

receive that is due to your employer's payments is reported as income. However, certain payments may not be 

taxable to you. Some of these payments are discussed 

later in this section. Also, see Military and Government 

Disability Pensions and Other Sickness and Injury Benefits in Pub. 525.

Cost paid by you. If you pay the entire cost of an accident or health plan, don't include any amounts you receive 

from the plan for personal injury or sickness as income on 

your tax return. If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to 

include some, or all, of the reimbursement in your income. 

Disability Pensions

If you retired on disability, you must include in income any 

disability pension you receive under a plan that is paid for 

by your employer. You must report your taxable disability 

payments as wages on Form 1040, 1040-SR, or 1040-NR, 

line 1h, until you reach minimum retirement age. Minimum 

retirement age is generally the age at which you can first 

receive a pension or annuity if you aren't disabled.

If you were age 65 or older by the end of 2023 or 

you were retired on permanent and total disability 

and received taxable disability income, you may 

be able to claim the credit for the elderly or the disabled. 

See Credit for the Elderly or the Disabled, later. For more 

information on this credit, see Pub. 524.

Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension 

or annuity. Report the payments on Form 1040, 1040-SR, 

or 1040-NR, lines 5a and 5b. For more information on 

pensions and annuities, see Pub. 575.

Note. Don’t include in your income disability payments 

you receive for injuries incurred as a direct result of terrorist attacks or military action directed against the United 

States (or its allies), whether outside or within the United 

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14 Chapter 2 Taxable and Nontaxable Income Publication 554 (2023)
States. For more information, see Terrorist attacks in Pub. 

525.

Retirement and profit-sharing plans. If you receive 

payments from a retirement or profit-sharing plan that 

doesn't provide for disability retirement, don't treat the 

payments as a disability pension. The payments must be 

reported as a pension or annuity.

Accrued leave payment. If you retire on disability, any 

lump-sum payment you receive for accrued annual leave 

is a salary payment. The payment isn't a disability payment. Include it in your income in the tax year you receive 

it.

Long-Term Care Insurance Contracts

In most cases, long-term care insurance contracts are 

treated as accident and health insurance contracts. 

Amounts you receive from them (other than policyholder 

dividends or premium refunds) are generally excludable 

from income as amounts received for personal injury or 

sickness. However, the amount you can exclude may be 

limited. Long-term care insurance contracts are discussed 

in more detail in Pub. 525.

Workers' Compensation

Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if 

they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. The exemption also applies to your survivors. The exemption, 

however, doesn't apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury.

If part of your workers' compensation reduces 

your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may 

be taxable. For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier.

Return to work. If you return to work after qualifying for 

workers' compensation, salary payments you receive for 

performing light duties are taxable as wages.

Other Sickness and Injury Benefits

In addition to disability pensions and annuities, you may 

receive other payments for sickness or injury.

Federal Employees' Compensation Act (FECA). Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of 

death, aren't taxable. However, you are taxed on amounts 

you receive under this Act as continuation of pay for up to 

45 days while a claim is being decided. Report this income on Form 1040, 1040-SR, or 1040-NR, line 1a. Also, 

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pay for sick leave while a claim is being processed is taxable and must be included in your income as wages.

If part of the payments you receive under FECA 

reduces your social security or equivalent railroad 

retirement benefits, that part is considered social 

security (or equivalent railroad retirement) benefits and 

may be taxable. For a discussion of the taxability of these 

benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier.

Other compensation. Many other amounts you receive 

as compensation for sickness or injury aren't taxable. 

These include the following amounts.

• Benefits you receive under an accident or health insurance policy on which either you paid the premiums or 

your employer paid the premiums but you had to include the amount of employer-paid premiums in your 

income. 

• Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum 

or in periodic payments.

• Disability benefits you receive for loss of income or 

earning capacity as a result of injuries under a no-fault 

car insurance policy. 

• Compensation you receive for permanent loss or loss 

of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). This 

compensation must be based only on the injury and 

not on the period of your absence from work. These 

benefits aren't taxable even if your employer pays for 

the accident and health plan that provides these benefits. 

Life Insurance Proceeds

Life insurance proceeds paid to you because of the death 

of the insured person aren't taxable unless the policy was 

turned over to you for a price. This is true even if the proceeds were paid under an accident or health insurance 

policy or an endowment contract issued on or before December 31, 1984. However, interest income received as a 

result of life insurance proceeds may be taxable.

Proceeds not received in installments. If death benefits are paid to you in a lump sum or other than at regular 

intervals, include in your income only the benefits that are 

more than the amount payable to you at the time of the insured person's death. If the benefit payable at death isn't 

specified, include in your income the benefit payments 

that are more than the present value of the payments at 

the time of death.

Proceeds received in installments. If you receive life 

insurance proceeds in installments, you can exclude part 

of each installment from your income.

To determine the excluded part, divide the amount held 

by the insurance company (generally, the total lump-sum 

CAUTION

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Publication 554 (2023) Chapter 2 Taxable and Nontaxable Income 15
payable at the death of the insured person) by the number 

of installments to be paid. Include anything over this excluded part in your income as interest.

Installments for life. If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds 

in installments for the rest of your life without a refund or 

period-certain guarantee, figure the excluded part of each 

installment by dividing the amount held by the insurance 

company by your life expectancy. If there is a refund or period-certain guarantee, the amount held by the insurance 

company for this purpose is reduced by the actuarial value 

of the guarantee.

Surviving spouse. If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the 

interest included in the installments. If you remarry, you 

can continue to take the exclusion.

Surrender of policy for cash. If you surrender a life insurance policy for cash, you must include in income any 

proceeds that are more than the cost of the life insurance 

policy. In general, your cost (or investment in the contract) 

is the total of premiums that you paid for the life insurance 

policy, less any refunded premiums, rebates, dividends, or 

unrepaid loans that weren't included in your income. You 

should receive a Form 1099-R showing the total proceeds 

and the taxable part. Report these amounts on Form 

1040, 1040-SR, or 1040-NR, lines 5a and 5b.

Endowment Contract Proceeds

An endowment contract is a policy that pays you a specified amount of money on a certain date unless you die before that date, in which case the money is paid to your 

designated beneficiary. Endowment proceeds paid in a 

lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. To determine 

your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your 

income. Include in your income the part of the lump-sum 

payment that is more than your cost.

Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity 

of the policy are taxed as an annuity. The tax treatment of 

an annuity is explained in Pub. 575. For this treatment to 

apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. This 

election must be made within 60 days after the lump-sum 

payment first becomes payable to you.

Accelerated Death Benefits

Certain amounts paid as accelerated death benefits under 

a life insurance contract or viatical settlement before the 

insured's death are generally excluded from income if the 

insured is terminally or chronically ill. However, see Exception, later. For a chronically ill individual, accelerated 

death benefits paid on the basis of costs incurred for 

qualified long-term care services are fully excludable. Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to 

a limit.

In addition, if any portion of a death benefit under a life 

insurance contract on the life of a terminally or chronically 

ill individual is sold or assigned to a viatical settlement 

provider, the amount received is also excluded from income. Generally, a viatical settlement provider is one who 

regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured 

individuals who are terminally or chronically ill.

To report taxable accelerated death benefits made on a 

per diem or other periodic basis, you must file Form 8853, 

Archer MSAs and Long-Term Care Insurance Contracts, 

with your return.

Terminally or chronically ill defined. A terminally ill 

person is one who has been certified by a physician as 

having an illness or physical condition that can reasonably 

be expected to result in death within 24 months from the 

date of the certification. A chronically ill person is one who 

isn't terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as 

meeting either of the following conditions.

• The person is unable to perform (without substantial 

help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) 

for a period of 90 days or more because of a loss of 

functional capacity.

• The person requires substantial supervision to protect 

themselves from threats to health and safety due to 

severe cognitive impairment.

Exception. The exclusion doesn't apply to any amount 

paid to a person other than the insured if that other person 

has an insurable interest in the life of the insured because 

the insured:

• Is a director, officer, or employee of the other person; 

or

• Has a financial interest in the business of the other 

person.

Sale of Home

You may be able to exclude from income any gain up to 

$250,000 ($500,000 on a joint return in most cases) on 

the sale of your main home. Generally, if you can exclude 

all of the gain, you don't need to report the sale on your tax 

return. You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax 

return for the year of the sale.

Main home. Usually, your main home is the home you 

live in most of the time and can be a:

• House,

• Houseboat,

16 Chapter 2 Taxable and Nontaxable Income Publication 554 (2023)
• Mobile home,

• Cooperative apartment, or

• Condominium.

Repaying the first-time homebuyer credit. If you purchased your home in 2008 and claimed the first-time 

homebuyer credit, you must continue repaying the credit 

with your 2023 tax return. If you are required to repay the 

credit because you sold the home or it otherwise ceased 

to be your main home in 2023, you must generally repay 

the balance of the unpaid credit with your 2023 return. 

See the Instructions for Form 5405, Repayment of the 

First-Time Homebuyer Credit, for more information and 

exceptions.

Maximum Amount of Exclusion

You can generally exclude up to $250,000 of the gain 

(other than gain allocated to periods of nonqualified use) 

on the sale of your main home if all of the following are 

true.

• You meet the ownership test.

• You meet the use test.

• During the 2-year period ending on the date of the 

sale, you didn't exclude gain from the sale of another 

home.

Joint returns. You may be able to exclude up to 

$500,000 of the gain (other than gain allocated to periods 

of nonqualified use) on the sale of your main home if you 

are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint 

returns, later, under Married Persons.

Reduced exclusion. Even if you don't meet the requirements described above, you can still claim an exclusion in 

some cases. Generally, you must have sold the home due 

to a change in place of employment, health, or unforeseen 

circumstances. The maximum amount you can exclude 

will be reduced. See Pub. 523 for more information.

Expatriation tax. You can't exclude gain from the sale of 

your home if you are subject to the expatriation tax. See 

Pub. 519 for more information about the expatriation tax.

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and 

use tests. These tests generally require that during the 

5-year period ending on the date of the sale, you must 

have:

• Owned the home for at least 2 years (the ownership 

test), and

• Lived in the home as your main home for at least 2 

years (the use test). The 2 years of residence can fall 

anywhere within the 5-year period, and it doesn't need 

to be a single block of time.

Exception to use test for individuals with a disability. 

There is an exception to the use test if, during the 5-year 

period before the sale of your home:

• You become physically or mentally unable to care for 

yourself, and

• You owned and lived in your home as your main home 

for a total of at least 1 year.

If you qualify for this exception, you are considered to live 

in your home during any time that you own the home and 

live in a facility (including a nursing home) that is licensed 

by a state or political subdivision to care for persons in 

your condition.

If you meet this exception to the use test, you still have 

to meet the 2-out-of-5-year ownership test to claim the exclusion.

Exception to ownership test for property acquired in 

a like-kind exchange. If you acquired your main home in 

a like-kind exchange, you must own the home for 5 years 

before you qualify for the exclusion. This special 5-year 

ownership rule continues to apply to the home even if you 

give it to another person. A like-kind exchange is an exchange of property held for productive use in a trade or 

business or for investment in which no gain or loss is recognized. See Pub. 523 for more information.

Period of nonqualified use. Generally, the gain from the 

sale or exchange of your main home won't qualify for the 

exclusion to the extent that the gain is allocated to periods 

of nonqualified use. Nonqualified use is any period after 

December 31, 2008, during which the property isn't used 

as the main home. See Pub. 523 for more information.

Married Persons

Generally, if the home you sold counts as your main home 

and you are a married person filing separately, the first 

$250,000 of gain isn't taxable if all of the following are true.

• You meet the ownership test.

• You meet the use test.

• During the 2-year period ending on the date of the 

sale, you didn’t exclude gain from the sale of another 

home.

You may be able to exclude up to $500,000 of the gain 

(other than gain allocated to periods of nonqualified use) 

on the sale of your main home if you are married and file a 

joint return and meet the requirements for joint returns discussed under Special rules for joint returns next.

Special rules for joint returns. You can exclude up to 

$500,000 of the gain on the sale of your main home if all of 

the following are true.

• You are married and file a joint return for the year.

• Either you or your spouse meets the ownership test.

• Both you and your spouse meet the use test.

Publication 554 (2023) Chapter 2 Taxable and Nontaxable Income 17
• During the 2-year period ending on the date of the 

sale, neither you nor your spouse exclude gain from 

the sale of another home.

Sale of home by surviving spouse. If your spouse died 

and you didn't remarry before the date of sale, you are 

considered to have owned and lived in the property as 

your main home during any period of time when your 

spouse owned and lived in it as a main home. 

If you meet all of the following requirements, you may 

qualify to exclude up to $500,000 of any gain from the sale 

or exchange of your main home in 2023.

• The sale or exchange took place no more than 2 years 

after the date of death of your spouse.

• You haven't remarried.

• You and your spouse met the use test at the time of 

your spouse's death.

• You or your spouse met the ownership test at the time 

of your spouse's death.

• Neither you nor your spouse excluded gain from the 

sale of another home during the last 2 years.

Home transferred from spouse. If your home was 

transferred to you by your spouse (or former spouse if the 

transfer was incident to divorce), you are considered to 

have owned it during any period of time when your spouse 

owned it.

Use of home after divorce. You are considered to have 

used property as your main home during any period when:

• You owned it, and

• Your spouse or former spouse is allowed to live in it 

under a divorce or separation instrument and uses it 

as their main home.

Business Use or Rental of Home

You may be able to exclude gain from the sale of a home 

that you have used for business or to produce rental income. However, you must meet the ownership and use 

tests. See Pub. 523 for more information.

Recapturing depreciation. If you used all or part of your 

home for business or rental after May 6, 1997, you may 

need to pay back (recapture) some or all of the depreciation you were entitled to take on your property when you 

sell it. See Pub. 523 for more information.

Reporting the Sale

Don't report the 2023 sale of your main home on your tax 

return unless:

• You received Form 1099-S, Proceeds From Real Estate Transactions;

• You have a gain and you don't qualify to exclude all of 

it;

• You have a gain and you choose not to exclude it; or

• You have a loss from the sale that is deductible.

A loss from the sale of your home, or the personal 

part of your home if it was also used for business 

or to produce rental income, isn’t deductible.

If any of the above apply, report the sale on Part I or 

Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. If you 

used your home for business or to produce rental income, 

you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. See 

Pub. 523 for more information.

Reverse Mortgages

A reverse mortgage is a loan where the lender pays you 

(in a lump sum, a monthly advance, a line of credit, or a 

combination of all three) while you continue to live in your 

home. With a reverse mortgage, you retain title to your 

home. Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, 

reach the end of a pre-selected loan period, or die. Because reverse mortgages are considered loan advances 

and not income, the amount you receive isn't taxable. Any 

interest (including original interest discount) accrued on a 

reverse mortgage isn’t deductible home mortgage interest. See Pub. 936 for more information.

Other Items

The following items are generally excluded from taxable 

income. You shouldn't report them on your return, unless 

otherwise indicated as taxable or includible in income.

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance isn't included in 

your income. However, if property you receive this way 

later produces income such as interest, dividends, or 

rents, that income is taxable to you. If property is given to 

a trust and the income from it is paid, credited, or distributed to you, that income is also taxable to you. If the gift, 

bequest, or inheritance is the income from property, that 

income is taxable to you.

Veterans' benefits. Don't include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). See Pub. 525.

Public assistance benefits. Other items that are generally excluded from taxable income also include the following public assistance benefits.

Welfare benefits. Don't include in your income benefit 

payments from a public welfare fund based upon need, 

such as payments due to blindness. However, you must 

include in your income any welfare payments that are 

compensation for services or that are obtained fraudulently.

CAUTION

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18 Chapter 2 Taxable and Nontaxable Income Publication 554 (2023)
Payments from a state fund for victims of crime. 

Don't include in your income payments from a state fund 

for victims of crime if the payments are in the nature of 

welfare payments. Don't deduct medical expenses that 

are reimbursed by such a fund.

Mortgage assistance payments. Payments made 

under section 235 of the National Housing Act for mortgage assistance aren't included in the homeowner's income. Interest paid for the homeowner under the mortgage assistance program can't be deducted.

Also, mortgage payments provided under the Department of Housing and Urban Development's Emergency 

Homeowners' Loan Program (EHLP), state housing finance authorities receiving funds allocated from the Housing Finance Agency Innovation Fund for the Hardest-Hit 

Housing Markets (HFA Hardest Hit Fund), or other similar 

state programs receiving funding from the EHLP are excluded from income. See Form 1098-MA, Mortgage Assistance Payments, and its instructions for details.

Payments to reduce cost of winter energy use. 

Payments made by a state to qualified people on the basis 

of need to reduce their cost of winter energy use aren't 

taxable.

Nutrition Program for the Elderly. Food benefits you 

receive under the Nutrition Program for the Elderly aren't 

taxable. If you prepare and serve free meals for the program, include in your income as wages the cash pay you 

receive, even if you are also eligible for food benefits.

Reemployment Trade Adjustment Assistance 

(RTAA). Payments you receive from a state agency under 

RTAA must be included in your income. The state must 

send you Form 1099-G, Certain Government Payments, to 

advise you of the amount you should include in income. 

The amount should be reported on Schedule 1 (Form 

1040), line 8z.

Persons with disabilities. If you have a disability, include in income compensation you receive for services 

you perform unless the compensation is otherwise excluded. However, don't include in income the value of goods, 

services, and cash that you receive, not in return for your 

services, but for your training and rehabilitation because 

you have a disability. Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, 

and services to help individuals with an intellectual disability do their work.

Medicare. Medicare benefits received under title XVIII of 

the Social Security Act aren't includible in the gross income of the individuals for whom they are paid. This includes basic (Part A (Hospital Insurance Benefits for the 

Aged)) and supplementary (Part B (Supplementary Medical Insurance Benefits for the Aged)).

Social security benefits. The Social Security Administration (SSA) provides benefits such as old-age benefits, 

benefits to disabled workers, and benefits to spouses and 

dependents. These benefits may be subject to federal income tax depending on your filing status and other income. See Social Security and Equivalent Railroad Retirement Benefits, earlier, and Pub. 915 for more information.

3.

Adjustments to Income

You may be able to subtract amounts from your total income (Form 1040 or 1040-SR, line 9) or total effectively 

connected income (Form 1040-NR, line 9) to get your adjusted gross income (Form 1040, 1040-SR, or 1040-NR, 

line 11). Some adjustments to income follow.

• Contributions to your IRA (Schedule 1 (Form 1040), 

line 20), explained later.

• Some health insurance costs (Schedule 1 (Form 

1040), line 17) if you were self-employed and had a 

net profit for the year, or if you received wages in 2023 

from an S corporation in which you were a 

more-than-2% shareholder.

• Payments to your self-employed SEP, SIMPLE, or 

qualified plan (Schedule 1 (Form 1040), line 16). For 

more information, including limits on how much you 

can deduct, see Pub. 560.

• Penalties paid on early withdrawal of savings (Schedule 1 (Form 1040), line 18). Form 1099-INT, Interest 

Income, or Form 1099-OID, Original Issue Discount, 

will show the amount of any penalty you were 

charged.

• Alimony payments (Schedule 1 (Form 1040), 

line 19a). Certain conditions may apply for your alimony payment to be deductible from income. For 

more information, see Pub. 504.

There are other items you can claim as adjustments to income. These adjustments are discussed in your tax return 

instructions.

Individual Retirement 

Arrangement (IRA) 

Contributions and Deductions

This section explains the tax treatment of amounts you 

pay into traditional IRAs. A traditional IRA is any IRA that 

isn't a Roth or SIMPLE IRA. Roth and SIMPLE IRAs are 

defined earlier in the IRA discussion under Retirement 

Plan Distributions. For more detailed information, see Pub. 

590-A and Pub. 590-B.

Publication 554 (2023) Chapter 3 Adjustments to Income 19
Contributions. An IRA is a personal savings plan that offers you tax advantages to set aside money for your 

retirement. Two advantages of a traditional IRA are:

• You may be able to deduct some or all of your contributions to it, depending on your circumstances; and

• Generally, amounts in your IRA, including earnings 

and gains, aren't taxed until distributed.

Although interest earned from your traditional IRA 

generally isn't taxed in the year earned, it isn't 

tax-exempt interest. Don't report this interest on 

your tax return as tax-exempt interest.

General limit. The most that can be contributed for 2023 

to your traditional IRA is the smaller of the following 

amounts.

• Your taxable compensation for the year, or

• $6,500 ($7,500 if you were age 50 or older by the end 

of 2023).

Contributions to Kay Bailey Hutchison Spousal 

IRAs. In the case of a married couple filing a joint return 

for 2023, up to $6,500 ($7,500 for each spouse age 50 or 

older by the end of 2023) can be contributed to IRAs on 

behalf of each spouse, even if one spouse has little or no 

compensation.

For more information on the general limit and the Kay 

Bailey Hutchison Spousal IRA limit, see How Much Can 

Be Contributed? in Pub. 590-A.

Deductible contribution. Generally, you can deduct 

the lesser of the contributions to your traditional IRA for 

the year or the general limit (or Kay Bailey Hutchison 

Spousal IRA limit, if applicable) just explained. However, if 

you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, you may not be able to deduct all of the 

contributions. Your deduction may be reduced or eliminated, depending on your filing status and the amount of 

your income. For more information, see Limit if Covered by 

Employer Plan in Pub. 590-A.

Nondeductible contribution. The difference between 

your total permitted contributions and your IRA deduction, 

if any, is your nondeductible contribution. You must file 

Form 8606 to report nondeductible contributions even if 

you don't have to file a tax return for the year.

4.

Deductions

Most taxpayers have a choice of taking a standard deduction or itemizing their deductions. You benefit from the 

standard deduction if your standard deduction is more 

than the total of your allowable itemized deductions. If you 

CAUTION

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have a choice, you should use the method that gives you 

the lower tax.

Standard Deduction

The standard deduction amount depends on your filing 

status, whether you are 65 or older or blind, and whether 

another taxpayer can claim you as a dependent. Generally, the standard deduction amounts are adjusted each 

year for inflation. In most cases, you can use Worksheet 

4-1 to figure your standard deduction amount.

Persons not eligible for the standard deduction. Your 

standard deduction is zero and you should itemize any deductions you have if:

• You are married and filing a separate return, and your 

spouse itemizes deductions;

• You are filing a tax return for a short tax year because 

of a change in your annual accounting period; or

• You are a nonresident or dual-status alien during the 

year. You are considered a dual-status alien if you 

were both a nonresident alien and a resident alien during the year.

If you are a nonresident alien who is married to a U.S. 

citizen or resident alien at the end of the year, you can 

choose to be treated as a U.S. resident. See Pub. 519. If 

you make this choice, you can take the standard deduction.

Decedent's final return. Decedent's final tax return 

should reflect the standard deduction that the decedent 

was entitled to claim at the time of their death. However, if 

the decedent wasn't age 65 or older at the time of death, 

the higher standard deduction for age can't be claimed. 

See Death before age 65, later.

Higher standard deduction for age (65 or older). If 

you don't itemize deductions, you are entitled to a higher 

standard deduction if you are age 65 or older at the end of 

the year. You are considered age 65 on the day before 

your 65th birthday. Therefore, you can take a higher standard deduction for 2023 if you were born before January 2, 

1959.

Death before age 65. If you are preparing a return for 

someone who died in 2023, consider the taxpayer to be 

age 65 or older at the end of 2023 only if they were age 65 

or older at the time of death. A taxpayer is considered age 

65 on the day before their birthday.

Example. Your spouse was born on February 14, 

1958, and died on February 13, 2023. Your spouse is considered age 65 at the time of death. However, if your 

spouse died on February 12, 2023, your spouse isn't considered age 65 at the time of death and isn't age 65 or 

older at the end of 2023.

Higher standard deduction for blindness. If you are 

blind on the last day of the year and you don't itemize 

20 Chapter 4 Deductions Publication 554 (2023)
deductions, you are entitled to a higher standard deduction.

Not totally blind. If you aren't totally blind, you must get 

a certified statement from an eye doctor (ophthalmologist 

or optometrist) that:

• You can't see better than 20/200 in the better eye with 

glasses or contact lenses, or

• Your field of vision isn't more than 20 degrees.

If your eye condition isn’t likely to improve beyond these 

limits, the statement should include this fact. You must 

keep the statement in your records.

If your vision can be corrected beyond these limits only 

by contact lenses that you can wear only briefly because 

of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify.

Spouse age 65 or older or blind. You can take the 

higher standard deduction if your spouse is age 65 or 

older or blind and:

• You file a joint return, or

• You file a separate return and your spouse had no 

gross income and can’t be claimed as a dependent by 

another taxpayer.

You can't claim the higher standard deduction for 

an individual other than yourself and your spouse.

Example. This example illustrates how to determine 

your standard deduction using Worksheet 4-1.

Jean and Terry are filing a joint return for 2023. Both are 

over age 65. Neither is blind, and neither can be claimed 

as a dependent. They don't itemize deductions, so they 

use Worksheet 4-1. Because they are married filing jointly, 

they enter $27,700 on line 1. They check the “No” box on 

line 2, so they also enter $27,700 on line 4. Because they 

are both over age 65, they enter $3,000 ($1,500 × 2) on 

line 5. They enter $30,700 ($27,700 + $3,000) on line 6, 

so their standard deduction is $30,700.

Standard Deduction for Dependents

The standard deduction for an individual who can be 

claimed as a dependent on another person's tax return is 

generally limited to the greater of:

• $1,250, or

• The individual's earned income for the year plus $400 

(but not more than the regular standard deduction 

amount).

However, the standard deduction may be higher if the 

individual is age 65 or older or blind.

If you (or your spouse, if you are filing jointly) can be 

claimed as a dependent on someone else's return, use 

Worksheet 4-1, if applicable, to determine your standard 

deduction.

CAUTION

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Itemized Deductions

Some individuals should itemize their deductions because 

it will save them money. Others should itemize because 

they don't qualify for the standard deduction. See the discussion under Standard Deduction, earlier, to decide if it 

would be to your advantage to itemize deductions.

Medical and dental expenses, some taxes, certain interest expenses, charitable contributions, casualty and 

theft losses, and certain other expenses may be itemized 

as deductions on Schedule A (Form 1040).

You may benefit from itemizing your deductions on 

Schedule A (Form 1040) if you:

• Can't take the standard deduction;

• Had uninsured medical or dental expenses that are 

more than 7.5% of your adjusted gross income (AGI);

• Paid interest on a loan secured by your home and that 

you used to buy, build, or improve your home;

• Paid real estate or personal property taxes;

• Paid state and local income taxes or general sales 

taxes;

• Had large uninsured casualty or theft losses due to a 

federally declared disaster;

• Made large contributions to qualified charities (see 

Pub. 526.); or

• Have total itemized deductions that are more than the 

standard deduction that applies to you.

See the Instructions for Schedule A (Form 1040) for 

more information.

Medical and Dental Expenses

You can deduct certain medical and dental expenses you 

paid for yourself, your spouse, and your dependent(s) if 

you itemize your deductions on Schedule A (Form 1040).

Table 4-1 shows some common items that you can or 

can't include in figuring your medical expense deduction. 

For more information, see the following discussions of selected items, which are presented in alphabetical order. A 

more extensive list of items and further details can be 

found in Pub. 502.

Publication 554 (2023) Chapter 4 Deductions 21
Worksheet 4-1. 2023 Standard Deduction Worksheet Keep for Your Records

Caution. If you are married filing separately and your spouse itemizes deductions, or if you are a dual-status alien, don't complete this worksheet. 

If you were born before January 2, 1959, and/or you were blind at the end of 2023, check the correct box(es) below. Put the total 

number of boxes checked in box c and go to line 1.

a. You Born before January 2, 1959 Blind

b. Your spouse Born before January 2, 1959 Blind

c. Total boxes checked

1. Enter the amount shown below for your filing status.

• Single or married filing separately—$13,850

• Married filing jointly or qualifying surviving 

spouse—$27,700

• Head of household—$20,800

............................ 1.

2. Can you (or your spouse, if filing jointly) be claimed as a dependent on someone else's return?

No. Skip line 3; enter the amount from line 1 on line 4.

Yes. Go to line 3.

3. Is your earned income* more than $850?

Yes. Add $400 to your earned income. Enter the total.

............................ 3.

No. Enter $1,250.

4. Enter the smaller of line 1 or line 3 ............................................................ 4.

5. If born before January 2, 1959, or blind, multiply the number in box c by $1,500 ($1,850 if single or head of 

household). Enter the result here. Otherwise, enter -0- ............................................ 5.

6. Add lines 4 and 5. This is your standard deduction for 2023** ...................................... 6.

* Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also 

includes any taxable scholarship or fellowship grant. Generally, your earned income is the total of the amount(s) you reported on Form 1040 or 

1040-SR, line 1z, and Schedule 1 (Form 1040), lines 3, 6, 8r, 8t, and 8u minus the amount, if any, on Schedule 1 (Form 1040), line 15.

** You may be able to increase the amount of your standard deduction on line 6 by a loss you suffered related to property in one of 

the Presidentially declared disaster areas eligible for that relief. See Pub. 976 for more information.

22 Chapter 4 Deductions Publication 554 (2023)
You can deduct only the amount of your medical 

and dental expenses that is more than 7.5% of 

your AGI.

What to include. Generally, you can include only the 

medical and dental expenses you paid this year, regardless of when the services were provided. If you pay medical expenses by check, the day you mail or deliver the 

check is generally the date of payment. If you use a 

pay-by-phone or online account to pay your medical expenses, the date reported on the statement of the financial 

institution showing when payment was made is the date of 

payment. You can include medical expenses you charge 

to your credit card in the year the charge is made. It 

doesn't matter when you actually pay the amount charged.

Home Improvements

You can include in medical expenses amounts you pay for 

home improvements if their main purpose is medical care 

for you, your spouse, or your dependent(s).

Only reasonable costs to accommodate a home to your 

disabled condition (or that of your spouse or your dependent(s) who lives with you) are considered medical care. 

Additional costs for personal motives, such as for architectural or aesthetic reasons, aren't medical expenses. Pub. 

CAUTION

!

502 contains additional information and examples, including a capital expense worksheet, to assist you in figuring 

the amount of the capital expense that you can include in 

your medical expenses. Also, see Pub. 502 for information 

about deductible operating and upkeep expenses related 

to such capital expense items, and for information about 

improvements, for medical reasons, to property rented by 

a person with disabilities.

Household Help

You can't include in medical expenses the cost of household help, even if such help is recommended by a doctor. 

This is a personal expense that isn't deductible. However, 

you may be able to include certain expenses paid to a person providing nursing-type services. For more information, 

see Nursing Services, later. Also, certain maintenance or 

personal care services provided for qualified long-term 

care can be included in medical expenses. For more information, see Qualified long-term care services under 

Long-Term Care, later.

Hospital Services

You can include in medical expenses amounts you pay for 

the cost of inpatient care at a hospital or similar institution 

if a principal reason for being there is to receive medical 

Table 4-1. Medical and Dental Expenses Checklist

You can include: You can't include:

• Bandages

• Capital expenses for 

equipment or 

improvements to your 

home needed for 

medical care (see Pub. 

502)

• Certain weight-loss 

expenses for obesity

• Diagnostic devices

• Expenses of an organ 

donor

• Eye surgery—to promote 

the correct function of 

the eye

• Guide dogs or other 

service animals aiding 

the blind, deaf, and 

disabled

• Hospital services fees 

(lab work, therapy, 

nursing services, 

surgery, etc.)

• Lead-based paint 

removal (see Pub. 502)

• Long-term care 

contracts, qualified (see 

Pub. 502)

• Meals and lodging 

provided by a hospital 

during medical treatment

• Medical and hospital 

insurance premiums

• Medical services fees 

(from doctors, dentists, 

surgeons, specialists, 

and other medical 

practitioners)

• Medicare Part D 

premiums

• Oxygen equipment and 

oxygen

• Part of life-care fee paid 

to retirement home 

designated for medical 

care

• Prescription medicines 

(prescribed by a doctor) 

and insulin

• Psychiatric and 

psychological treatment

• Social security tax, 

Medicare tax, FUTA tax, 

and state employment 

tax for worker providing 

medical care (see Pub. 

502)

• Special items (artificial 

limbs, dentures, 

eyeglasses, contact 

lenses, hearing aids, 

crutches, wheelchair, 

etc.)

• Special education for 

mentally or physically 

disabled persons (see 

Pub. 502)

• Stop-smoking programs

• Transportation for 

needed medical care

• Treatment at a drug or 

alcohol center (includes 

meals and lodging 

provided by the center)

• Wages for nursing 

services (see Pub. 502)

• Bottled water

• Contributions to Archer 

MSAs (see Pub. 969)

• Diaper service

• Expenses for your general 

health (even if following 

your doctor's advice) 

such as:

—Health club dues;

—Household help (even if 

recommended by a 

doctor);

—Social activities, such 

as dancing or swimming 

lessons; and

—Trip for general health 

improvement

• Flexible spending 

account reimbursements 

for medical expenses (if 

contributions were on a 

pre-tax basis) (see Pub. 

502)

• Funeral, burial, or 

cremation expenses

• Health savings account 

payments for medical 

expenses (see Pub. 502)

• Illegal operation or 

treatment

• Life insurance or income 

protection policies, or 

policies providing 

payment for loss of life, 

limb, sight, etc.

• Medical insurance 

included in a car 

insurance policy 

covering all persons 

injured in or by your car

• Medicine you buy 

without a prescription

• Nursing care for a 

healthy baby

• Prescription drugs you 

brought in (or ordered 

shipped) from another 

country, in most cases 

(see Pub. 502)

• Surgery for purely 

cosmetic reasons (see 

Pub. 502)

• Toothpaste, toiletries, 

cosmetics, etc.

• Teeth whitening

• Weight-loss expenses 

not for the treatment of 

obesity or other disease

Publication 554 (2023) Chapter 4 Deductions 23
care. This includes amounts paid for meals and lodging. 

Also, see Meals and Lodging, later.

Long-Term Care

You can include in medical expenses amounts paid for 

qualified long-term care services and certain amounts of 

premiums paid for qualified long-term care insurance contracts.

Qualified long-term care services. Qualified long-term 

care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, 

and maintenance and personal care services (defined 

later) that are:

1. Required by a chronically ill individual, and

2. Provided under a plan of care prescribed by a licensed health care practitioner.

Chronically ill individual. An individual is chronically 

ill if, within the previous 12 months, a licensed health care 

practitioner has certified that the individual meets either of 

the following descriptions.

1. The individual is unable to perform at least two activities of daily living without substantial assistance from 

another individual for at least 90 days, due to a loss of 

functional capacity. Activities of daily living are eating, 

toileting, transferring, bathing, dressing, and continence.

2. The individual requires substantial supervision to be 

protected from threats to health and safety due to severe cognitive impairment.

Maintenance and personal care services. Maintenance or personal care services is care that has as its primary purpose the providing of a chronically ill individual 

with needed assistance with their disabilities (including 

protection from threats to health and safety due to severe 

cognitive impairment).

Qualified long-term care insurance contracts. A 

qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified 

long-term care services. The contract must:

1. Be guaranteed renewable;

2. Not provide for a cash surrender value or other money 

that can be paid, assigned, pledged, or borrowed;

3. Provide that refunds, other than refunds on the death 

of the insured or complete surrender or cancellation of 

the contract, and dividends under the contract must 

be used only to reduce future premiums or increase 

future benefits; and

4. Generally not pay or reimburse expenses incurred for 

services or items that would be reimbursed under 

Medicare, except where Medicare is a secondary 

payer, or the contract makes per diem or other periodic payments without regard to expenses.

The amount of qualified long-term care premiums you 

can include is limited. You can include the following as 

medical expenses on Schedule A (Form 1040).

1. Qualified long-term care premiums up to the following 

amounts.

a. Age 40 or under—$480.

b. Age 41 to 50—$890.

c. Age 51 to 60—$1,790.

d. Age 61 to 70—$4,770.

e. Age 71 or over—$5,960.

2. Unreimbursed expenses for qualified long-term care 

services.

Note. The limit on premiums is for each person.

Meals and Lodging

You can include in medical expenses the cost of meals 

and lodging at a hospital or similar institution if your main 

reason for being there is to receive medical care.

You may be able to include in medical expenses the 

cost of lodging (but not meals) not provided in a hospital 

or similar institution. You can include the cost of such 

lodging while away from home if all of the following requirements are met.

• The lodging is primarily for, and essential to, medical 

care.

• The medical care is provided by a doctor in a licensed 

hospital or in a medical care facility related to, or the 

equivalent of, a licensed hospital.

• The lodging isn't lavish or extravagant under the circumstances.

• There is no significant element of personal pleasure, 

recreation, or vacation in the travel away from home.

The amount you include in medical expenses for lodging can't be more than $50 per night for each person. You 

can include lodging for a person traveling with the person 

receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. (Meals aren't included.)

Nursing home. You can include in medical expenses the 

cost of medical care in a nursing home or a home for the 

aged for yourself, your spouse, or your dependent(s). This 

includes the cost of meals and lodging in the home if a 

main reason for being there is to get medical care.

Don't include the cost of meals and lodging if the reason for being in the home is personal. However, you can 

include in medical expenses the part of the cost that is for 

medical or nursing care.

24 Chapter 4 Deductions Publication 554 (2023)
Medical Insurance Premiums

You can include in medical expenses insurance premiums 

you pay for policies that cover medical care. Policies can 

provide payment for:

• Hospitalization, surgical fees, X-rays;

• Prescription drugs and insulin;

• Dental care;

• Replacement of lost or damaged contact lenses; and

• Qualified long-term care insurance contracts (subject 

to the additional limits included in the discussion on 

qualified long-term care insurance contracts under 

Long-Term Care, earlier).

If you have a policy that provides payments for other 

than medical care, you can include the premiums for the 

medical care part of the policy if the charge for the medical part is reasonable. The cost of the medical portion 

must be separately stated in the insurance contract or 

given to you in a separate statement.

Medicare Part A. If you are covered under social security 

(or if you are a government employee who paid Medicare 

tax), you are enrolled in Medicare Part A. The payroll tax 

paid for Medicare Part A isn't a medical expense. If you 

aren't covered under social security (or weren't a government employee who paid Medicare tax), you can enroll 

voluntarily in Medicare Part A. In this situation, you can include the premiums you paid for Medicare Part A as a 

medical expense.

Medicare Part B. Medicare Part B is a supplemental 

medical insurance. Premiums you pay for Medicare Part B 

are a medical expense. Check the information you received from the SSA to find out your premium.

Social security beneficiaries may quickly and easily obtain various information from the SSA’s website with a my 

Social Security account, including getting a replacement 

SSA-1099 or SSA-1042S. For more information, see Obtaining social security information, earlier.

Medicare Part D. Medicare Part D is a voluntary prescription drug insurance program for persons with Medicare Part A or Part B. You can include as a medical expense premiums you pay for Medicare Part D.

Prepaid insurance premiums. Insurance premiums you 

pay before you are age 65 for medical care for yourself, 

your spouse, or your dependents after you reach age 65 

are medical care expenses in the year paid if they are:

• Payable in equal yearly installments or more often; 

and

• Payable for at least 10 years, or until you reach age 65 

(but not for less than 5 years).

Medicines

You can include in medical expenses amounts you pay for 

prescribed medicines and drugs. A prescribed drug is one 

that requires a prescription by a doctor for its use by an individual. You can also include amounts you pay for insulin. 

Except for insulin, you can't include in medical expenses 

amounts you pay for a drug that isn't prescribed.

Imported medicines and drugs. If you import medicines or drugs from other countries, see Medicines and 

Drugs From Other Countries under What Expenses Aren't 

Includible in Pub. 502.

Nursing Services

You can include in medical expenses wages and other 

amounts you pay for nursing services. The services need 

not be performed by a nurse as long as the services are of 

a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such 

as giving medication or changing dressings, as well as 

bathing and grooming the patient. These services can be 

provided in your home or another care facility.

Generally, only the amount spent for nursing services is 

a medical expense. If the attendant also provides personal 

and household services, amounts paid to the attendant 

must be divided between the time spent performing 

household and personal services and the time spent for 

nursing services. However, certain maintenance or personal care services provided for qualified long-term care 

can be included in medical expenses. See Maintenance 

and personal care services under Qualified long-term care 

services, earlier. Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and 

dependent care credit. See Child and Dependent Care 

Credit, later, and Pub. 503.

You can also include in medical expenses part of the 

amount you pay for that attendant's meals. Divide the food 

expense among the household members to find the cost 

of the attendant's food. Then, divide that cost in the same 

manner as in the preceding paragraph. If you had to pay 

additional amounts for household upkeep because of the 

attendant, you can include the extra amounts with your 

medical expenses. This includes extra rent or utilities you 

pay because you moved to a larger apartment to provide 

space for the attendant.

Employment taxes. You can include as a medical expense social security tax, FUTA tax, Medicare tax, and 

state employment taxes you pay for a nurse, attendant, or 

other person who provides medical care. If the attendant 

also provides personal and household services, you can 

include as a medical expense only the amount of employment taxes paid for medical services as explained earlier 

under Nursing Services. For information on employment 

tax responsibilities of household employers, see Pub. 926.

Transportation

You can include in medical expenses amounts paid for 

transportation primarily for, and essential to, medical care.

Publication 554 (2023) Chapter 4 Deductions 25
Car expenses. You can include out-of-pocket expenses, 

such as the cost of gas and oil, when you use a car for 

medical reasons. You can't include depreciation, insurance, general repair, or maintenance expenses.

If you don't want to use your actual expenses for 2023, 

you can use the standard medical mileage rate of 22 cents 

a mile.

You can also include parking fees and tolls. You can 

add these fees and tolls to your medical expenses 

whether you use actual expenses or use the standard 

mileage rate.

You can also include: 

• Bus, taxi, train, or plane fares or ambulance service; 

and

• Transportation expenses of a nurse or other person 

who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone.

Don't include transportation expenses if, for purely 

personal reasons, you choose to travel to another 

city for an operation or other medical care prescribed by your doctor.

5.

Credits

This chapter briefly discusses the credit for the elderly or 

the disabled, the child and dependent care credit, and the 

CAUTION

!

earned income credit. You may be able to reduce your 

federal income tax by claiming one or more of these credits. You may also be able to increase your refund by claiming the earned income credit.

Credit for the Elderly or the 

Disabled

This section explains who qualifies for the credit for the 

elderly or the disabled and how to figure this credit. For 

more information, see Pub. 524.

You can take the credit only if you file Form 1040 

or 1040-SR. You can't take the credit if you file 

Form 1040-NR.

Can You Take the Credit?

You can take the credit for the elderly or the disabled if you 

meet both of the following requirements.

• You are a qualified individual.

• Your income isn't more than certain limits.

You can use Figure 5-A and Figure 5-B as guides to see if 

you are eligible for the credit.

CAUTION

!

26 Chapter 5 Credits Publication 554 (2023)
Qualified Individual

You are a qualified individual for this credit if you are a U.S. 

citizen or resident alien, and either of the following applies.

1. You were age 65 or older at the end of 2023.

2. You were under age 65 at the end of 2023 and all 

three of the following statements are true.

a. You retired on permanent and total disability (explained later).

b. You received taxable disability income for 2023.

c. On January 1, 2023, you had not reached mandatory retirement age (defined, later, under Disability 

income).

Age 65. You are considered to be age 65 on the 

day before your 65th birthday. As a result, if you 

were born on January 1, 1959, you are considered to be age 65 at the end of 2023.

U.S. citizen or resident alien. You must be a U.S. citizen 

or resident alien (or be treated as a resident alien) to take 

the credit. Generally, you can't take the credit if you were a 

nonresident alien at any time during the tax year.

Exceptions. You may be able to take the credit if you 

are a nonresident alien who is married to a U.S. citizen or 

TIP

resident alien at the end of the tax year and you and your 

spouse choose to treat you as a U.S. resident alien. If you 

make that choice, both you and your spouse are taxed on 

your worldwide income.

If you were a nonresident alien at the beginning of the 

year and a resident alien at the end of the year, and you 

were married to a U.S. citizen or resident alien at the end 

of the year, you may be able to choose to be treated as a 

U.S. resident alien for the entire year. In that case, you 

may be allowed to take the credit.

For information on these choices, see chapter 1 of Pub. 

519.

Married persons. Generally, if you are married at the 

end of the tax year, you and your spouse must file a joint 

return to take the credit. However, if you and your spouse 

didn't live in the same household at any time during the 

tax year, you can file either a joint return or separate returns and still take the credit.

Head of household. You can file as head of household 

and qualify to take the credit even if your spouse lived with 

you during the first 6 months of the year if you meet certain tests. See Pub. 524 and Pub. 501.

Under age 65. If you are under age 65 at the end of 

2023, you can qualify for the credit only if you are retired 

on permanent and total disability and have taxable 

Figure 5-A. Are You a Qualified Individual?

Were you married at the end of the tax

year?

No

Yes

No

Yes

Yes

Did you receive taxable disability

benets during the tax year?

You are a qualied

individual and may be able

to take the credit for the

elderly or the disabled

unless your income

exceeds the limits in

Figure 5-B. Yes

You aren’t a qualied

individual and can’t

take the credit for the

elderly or the disabled.

Yes

No

Yes

If you were a nonresident alien at any time during the tax year and were married to a U.S. citizen or resident alien at the end of the tax year, see U.S. Citizen or

Resident Alien under Qualified Individual. If you and your spouse choose to treat you as a U.S. resident alien, answer “Yes” to this question.

Mandatory retirement age is the age set by your employer at which you would have been required to retire, had you not become disabled.

START HERE

2

3

Did you live with your

spouse at any time

during the tax year?

Are you a U.S. citizen or resident alien?2

No

Yes

Are you ling a joint

return with your spouse?

Yes

Were you 65 or older at the end of

the tax year?

No

Are you retired on permanent and

total disability?

No

No

Did you reach mandatory retirement

age before the tax year? 3

No

1

1 However, you may be able to claim this credit even if you lived with your spouse during the rst 6 months of the tax year, as long as you qualify to le as head of 

household. You qualify to le as head of household if you are considered unmarried and meet certain other conditions. See Pub. 501 for more information.

Publication 554 (2023) Chapter 5 Credits 27
disability income (discussed later under Disability income). You are considered to be under age 65 at the end 

of 2023 if you were born after January 1, 1959. You are retired on permanent and total disability if:

• You were permanently and totally disabled when you 

retired, and

• You retired on disability before the end of the tax year.

Even if you don't retire formally, you may be considered 

retired on disability when you have stopped working because of your disability. If you retired on disability before 

1977, and weren't permanently and totally disabled at the 

time, you can qualify for the credit if you were permanently 

and totally disabled on January 1, 1976, or January 1, 

1977.

Permanent and total disability. You are permanently 

and totally disabled if you can't engage in any substantial 

gainful activity because of your physical or mental condition. A physician must certify that the condition has lasted 

or can be expected to last continuously for 12 months or 

more, or that the condition can be expected to result in 

death. See Physician's statement, later.

Substantial gainful activity. Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work 

generally done for pay or profit.

Full-time work (or part-time work done at the employer's 

convenience) in a competitive work situation for at least 

the minimum wage conclusively shows that you are able 

to engage in substantial gainful activity.

Substantial gainful activity isn't work you do to take care 

of yourself or your home. It isn't unpaid work on hobbies, 

institutional therapy or training, school attendance, clubs, 

social programs, and similar activities. However, doing this 

kind of work may show that you are able to engage in substantial gainful activity.

The fact that you haven't worked or have been unemployed for some time isn't, of itself, conclusive evidence 

that you can't engage in substantial gainful activity.

Physician's statement. If you are under age 65, you 

must have your physician complete a statement certifying 

that you were permanently and totally disabled on the 

date you retired.

You don't have to file this statement with your tax return, 

but you must keep it for your records. The Instructions for 

Schedule R (Form 1040) include a statement your physician can complete and that you can keep for your records.

Veterans. If the VA certifies that you are permanently 

and totally disabled, you can substitute VA Form 21-0172, 

Certification of Permanent and Total Disability, for the 

physician's statement you are required to keep. VA Form 

21-0172 must be signed by a person authorized by the VA 

to do so. You can get this form from your local VA regional 

office.

Physician's statement obtained in earlier year. If 

you got a physician's statement in an earlier year and, due 

to your continued disability, you were unable to engage in 

any substantial gainful activity during 2023, you may not 

need to get another physician's statement for 2023. For a 

detailed explanation of the conditions you must meet, see 

the instructions for Schedule R (Form 1040), Part II. If you 

meet the required conditions, you must check the box on 

Schedule R (Form 1040), Part II, line 2.

If you checked Schedule R (Form 1040), Part I, box 4, 

5, or 6, enter in the space above the box in Part II, line 2, 

the first name(s) of the spouse(s) for whom the box is 

checked.

Disability income. If you are under age 65, you must 

also have taxable disability income to qualify for the credit.

Disability income must meet the following two requirements.

• It must be paid under your employer's accident or 

health plan or pension plan.

• It must be included in your income as wages (or payments in lieu of wages) for the time you are absent 

from work because of permanent and total disability.

Payments that aren't disability income. Any payment you receive from a plan that doesn't provide for disability retirement isn't disability income. Any lump-sum payment for accrued annual leave that you receive when you 

retire on disability is a salary payment and isn't disability 

income.

For purposes of the credit for the elderly or the disabled, disability income doesn't include amounts you 

Figure 5-B. Income Limits

IF your filing status is...

THEN even if you qualify (see Figure 5-A), you CAN’T take the credit if:

The amount on your Form 1040 or 

1040-SR, line 11, is equal to or more than...

OR the total of your nontaxable social 

security and other nontaxable pension(s), 

annuities, or disability income is equal to or 

more than...

single, head of household, or qualifying 

surviving spouse 

$17,500 $5,000

married filing jointly and only one spouse 

qualifies in Figure 5-A

$20,000 $5,000

married filing jointly and both spouses qualify in 

Figure 5-A

$25,000 $7,500

married filing separately and you lived apart 

from your spouse for all of 2023

$12,500 $3,750

28 Chapter 5 Credits Publication 554 (2023)
receive after you reach mandatory retirement age. Mandatory retirement age is the age set by your employer at 

which you would have had to retire had you not become 

disabled.

Figuring the Credit

You can figure the credit yourself or allow the IRS to figure 

it for you.

Figuring the credit yourself. If you figure the credit 

yourself, fill out the front of Schedule R (Form 1040). Next, 

fill out Schedule R (Form 1040), Part III.

Credit figured for you. If you can take the credit and you 

want the IRS to figure the credit for you, see Pub. 524 or 

the Instructions for Schedule R (Form 1040). If you want 

the IRS to figure your tax, see chapter 13 of Pub. 17.

Child and Dependent Care 

Credit

You may be able to claim this credit if you pay someone to 

care for your dependent who is under age 13 or for your 

spouse or dependent who isn't able to care for themselves. The credit can be up to 35% of your expenses. To 

qualify, you must pay these expenses so you can work or 

look for work.

If you claim this credit, you must include on your 

return the name and taxpayer identification number (generally, the social security number) of each 

qualifying person for whom care is provided. You must 

also show on your return the name, address, and taxpayer 

identification number of the person(s) or organization(s) 

that provided the care. If the correct information isn't 

shown, the credit may be reduced or disallowed.

For more information, see Pub. 503.

Earned Income Credit (EIC)

The EIC is a refundable tax credit for certain people who 

work and have earned income under $63,398. The EIC is 

available to persons with or without a qualifying child.

Credit has no effect on certain welfare benefits. Any 

refund you receive because of the EIC can't be counted as 

income when determining whether you or anyone else is 

eligible for benefits or assistance, or how much you or 

anyone else can receive, under any federal program or under any state or local program financed in whole or in part 

with federal funds. These programs include the following.

• Medicaid.

• SSI.

• Supplemental Nutrition Assistance Program (SNAP) 

(food stamps).

CAUTION

!

• Low-income housing.

• Temporary Assistance for Needy Families (TANF).

In addition, when determining eligibility, the refund can't be 

counted as a resource for at least 12 months after you receive it. Check with your local benefit coordinator to find 

out if your refund will affect your benefits.

Do You Qualify for the EIC?

Use Table 5-1 as a starting point to the rules you must 

meet in order to qualify for the EIC. The specific rules you 

must meet depend on whether you have a qualifying child.

• If you have a qualifying child, the rules in Parts A, B, 

and D apply to you.

• If you don't have a qualifying child, the rules in Parts A, 

C, and D apply to you.

If you think you may qualify for the credit after reading all 

the rules in each part, see Pub. 596, for more details 

about the EIC. You can also find information about the EIC 

in the instructions for Form 1040, line 27.

The sections that follow provide additional information 

for some of the rules.

Adjusted gross income (AGI). Under Rule 1, you can't 

claim the EIC unless your AGI is less than the applicable 

limit shown in Part A of Table 5-1. Your AGI is the amount 

on line 11 of Form 1040 or 1040-SR.

Social security number (SSN). Under Rule 2, you (and 

your spouse, if you are married filing jointly) must have a 

valid SSN issued by the SSA. Any qualifying child listed 

on Schedule EIC must also have a valid SSN. (See Qualifying child, later, if you have a qualifying child.)

An SSN is valid for the EIC unless it was issued after 

the due date of your 2023 return (including extensions) or 

it was issued solely to apply for or receive a federally funded benefit and does not authorize you to work. An example of a federally funded benefit is Medicaid.

Investment income. Under Rule 6, you can't claim the 

EIC unless your investment income is $11,000 or less. If 

your investment income is more than $11,000, you can't 

claim the credit. For most people, investment income is 

the total of the following amounts.

• Taxable interest (line 2b of Form 1040 or 1040-SR).

• Tax-exempt interest (line 2a of Form 1040 or 

1040-SR).

• Dividend income (line 3b of Form 1040 or 1040-SR).

• Capital gain net income (line 7 of Form 1040 or 

1040-SR, if more than zero).

For more information about investment income, see 

Pub. 596.

Earned income. Under Rule 7, you must have earned income to claim the EIC. Under Rule 15, you can't claim the 

EIC unless your earned income is less than the applicable 

limit shown in Table 5-1, Part D. Earned income includes 

all of the following types of income.

Publication 554 (2023) Chapter 5 Credits 29
1. Wages, salaries, tips, and other taxable employee 

pay. Employee pay is earned income only if it is taxable. Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, isn't 

earned income. But there is an exception for nontaxable combat pay, which you can choose to include in 

earned income.

2. Net earnings from self-employment.

3. Gross income received as a statutory employee.

Gross income defined. Gross income means all income 

you received in the form of money, goods, property, and 

services that isn't exempt from tax, including any income 

from sources outside the United States or from the sale of 

your main home (even if you can exclude part or all of it). 

Don't include any social security benefits unless (a) you 

are married filing a separate tax return and you lived with 

your spouse at any time in 2023, or (b) one-half of your social security benefits plus your other gross income and 

any tax-exempt interest is more than $25,000 ($32,000 if 

married filing jointly). If (a) or (b) applies, see the instructions for Form 1040, lines 6a and 6b, to figure the taxable 

part of social security benefits you must include in gross 

income.

Self-employed persons. If you are self-employed and 

your net earnings are $400 or more, be sure to correctly fill 

out Schedule SE (Form 1040), Self-Employment Tax, and 

pay the proper amount of self-employment tax. If you 

don't, you may not get all the credit to which you are entitled.

Disability benefits. If you retired on disability, taxable 

benefits you receive under your employer's disability retirement plan are considered earned income until you 

reach minimum retirement age. Minimum retirement age is 

generally the earliest age at which you could have received a pension or annuity if you weren't disabled. Beginning on the day after you reach minimum retirement age, 

payments you receive are taxable as a pension and aren't 

considered earned income.

Payments you received from a disability insurance policy that you paid the premiums for aren't earned income. It 

doesn't matter whether you have reached minimum retirement age. If this policy is through your employer, the 

amount may be shown in box 12 of your Form W-2 with 

code J.

Income that isn't earned income. Examples of items 

that aren't earned income under Rule 7 include:

• Interest and dividends;

Table 5-1. Earned Income Credit (EIC) in a Nutshell

First, you must meet all the rules in this 

column.

Second, you must meet all the rules in 

one of these columns, whichever applies.

Third, you must meet 

the rule in this column.

Part A.

Rules for Everyone

Part B. 

Rules if You Have a 

Qualifying Child

Part C. 

Rules if You Don't 

Have a Qualifying 

Child

Part D.

Figuring and Claiming 

the EIC

1. Your adjusted gross 

income (AGI) must be 

less than:

•$56,838 ($63,398 for 

married filing jointly) if 

you have three or 

more qualifying 

children who have 

valid SSNs,

•$52,918 ($59,478 for 

married filing jointly) if 

you have two 

qualifying children who 

have valid SSNs,

•$46,560 ($53,120 for 

married filing jointly) if 

you have one 

qualifying child who 

has a valid SSN, or 

•$17,640 ($24,210 for 

married filing jointly) if 

you don't have a 

qualifying child who 

has a valid SSN.

2. You must have a 

valid SSN by the due 

date of your 2023 

return (including 

extensions). 

3. You must meet 

certain requirements 

if you are separated 

from your spouse and 

not filing a joint return.

4. You must be a U.S. 

citizen or resident 

alien all year. 

(However, see Pub. 

596 if your filing 

status is married filing 

jointly.) 

5. You can't file Form 

2555 (relating to 

foreign earned 

income).

6. Your investment 

income must be 

$11,000 or less. 

7. You must have 

earned income. 

8. Your child must meet 

the relationship, age, 

residency, and joint 

return tests. 

9. Your qualifying child 

can't be used by more 

than one person to 

claim the EIC. 

10. You can't be a 

qualifying child of 

another person. 

11. You must meet 

the age 

requirements. 

12. You can't be the 

dependent of 

another person. 

13. You can't be a 

qualifying child of 

another person.

14. You must have 

lived in the United 

States more than 

half of the year. 

15. Your earned income 

must be less than:

•$56,838 ($63,398 for 

married filing jointly) if you 

have three or more 

qualifying children who 

have valid SSNs,

•$52,918 ($59,478 for 

married filing jointly) if you 

have two qualifying 

children who have valid 

SSNs,

•$46,560 ($53,120 for 

married filing jointly) if you 

have one qualifying child 

who has a valid SSN, or

•$17,640 ($24,210 for 

married filing jointly) if you 

don't have a qualifying 

child who has a valid SSN.

30 Chapter 5 Credits Publication 554 (2023)
• Pensions and annuities;

• Social security and railroad retirement benefits (including disability benefits—except for payments covered under Disability benefits, earlier);

• Alimony and child support;

• Welfare benefits;

• Workers' compensation benefits;

• Unemployment compensation (insurance);

• Nontaxable foster care payments; and

• Veterans' benefits, including VA rehabilitation payments.

Don't include any of these items in your earned income.

Workfare payments. Nontaxable workfare payments 

aren't earned income for the EIC. These are cash payments certain people receive from a state or local agency 

that administers public assistance programs funded under 

the federal TANF program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private 

sector employment isn't available, or (2) community service program activities.

Qualifying child. Under Rule 8, your child is a qualifying 

child if your child meets four tests. The four tests are:

1. Relationship,

2. Age,

3. Joint return, and

4. Residency.

The four tests are illustrated in Figure 5-C. See Pub. 

596 for more information about each test.

Figuring the EIC

To figure the amount of your credit, you have two choices.

1. Have the IRS figure the EIC for you. If you want to do 

this, see IRS Will Figure the EIC for You in Pub. 596.

2. Figure the EIC yourself. If you want to do this, see 

How To Figure the EIC Yourself in Pub. 596.

Figure 5-C. Tests for Qualifying Child

A qualifying child for the EIC is a child who is your...

Son, daughter, stepchild, eligible foster child, 

or a descendant of any of them (for example, your grandchild) 

OR

Brother, sister, half brother, half sister, stepbrother, 

stepsister, or a descendant of any of them (for example, your 

niece or nephew)

AND

was...

Under age 19 at the end of 2023 and younger than you (or your spouse, if filing jointly)

OR

Under age 24 at the end of 2023, a student, and younger than you (or your spouse, if filing jointly)

OR

Permanently and totally disabled at any time during the year, regardless of age 

AND

who...

Isn’t filing a joint return for 2023 

(or is filing a joint return for 2023 only to claim a refund of income tax withheld or estimated tax paid)

AND

who...

Lived with you in the United States for more than half

of 2023.

If the child didn't live with you for the

required time, see Pub. 596 for more information.

Publication 554 (2023) Chapter 5 Credits 31
6.

Estimated Tax

Estimated tax is a method used to pay tax on income that 

isn't subject to withholding. This income includes self-employment income, interest, dividends, alimony, rent, gains 

from the sale of assets, prizes, and awards.

Income tax is generally withheld from pensions and annuity payments you receive. However, if the tax withheld from 

your pension (or other) income isn't enough, you may 

have to pay estimated tax. If you don't pay enough tax 

through withholding, by making estimated tax payments, 

or both, you may be charged a penalty.

Who Must Make Estimated Tax 

Payments

If you had a tax liability for 2023, you may have to pay estimated tax for 2024. In most cases, you must pay estimated tax for 2024 if both of the following apply.

1. You expect to owe at least $1,000 in tax for 2024, after 

subtracting your withholding and tax credits.

2. You expect your withholding and tax credits to be less 

than the smaller of:

• 90% of the tax to be shown on your 2024 tax return, or

• 100% of the tax shown on your 2023 tax return. The 

2023 tax return must cover all 12 months.

If all of your income is subject to income tax withholding 

and enough tax is withheld, you probably don't need to 

make estimated tax payments.

For more information on estimated tax, see Pub. 505.

7.

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, 

forms, or instructions, go to IRS.gov to find resources that 

can help you right away.

Preparing and filing your tax return. After receiving all 

your wage and earnings statements (Forms W-2, W-2G, 

1099-R, 1099-MISC, 1099-NEC, etc.); unemployment 

compensation statements (by mail or in a digital format) or 

other government payment statements (Form 1099-G); 

and interest, dividend, and retirement statements from 

banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you 

qualify for free tax preparation, or hire a tax professional to 

prepare your return.

Free options for tax preparation. Your options for preparing and filing your return online or in your local community, if you qualify, include the following.

• Free File. This program lets you prepare and file your 

federal individual income tax return for free using software or Free File Fillable Forms. However, state tax 

preparation may not be available through Free File. Go 

to IRS.gov/FreeFile to see if you qualify for free online 

federal tax preparation, e-filing, and direct deposit or 

payment options.

• VITA. The Volunteer Income Tax Assistance (VITA) 

program offers free tax help to people with 

low-to-moderate incomes, persons with disabilities, 

and limited-English-speaking taxpayers who need 

help preparing their own tax returns. Go to IRS.gov/

VITA, download the free IRS2Go app, or call 

800-906-9887 for information on free tax return preparation.

• TCE. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly 

those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors. 

Go to IRS.gov/TCE or download the free IRS2Go app 

for information on free tax return preparation.

• MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military 

OneSource. For more information, go to 

MilitaryOneSource (MilitaryOneSource.mil/MilTax).

Also, the IRS offers Free Fillable Forms, which can 

be completed online and then e-filed regardless of income.

Using online tools to help prepare your return. Go to 

IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant (IRS.gov/

EITCAssistant) determines if you’re eligible for the 

earned income credit (EIC).

• The Online EIN Application (IRS.gov/EIN) helps you 

get an employer identification number (EIN) at no 

cost.

• The Tax Withholding Estimator (IRS.gov/W4App) 

makes it easier for you to estimate the federal income 

tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.

• The First-Time Homebuyer Credit Account Look-up 

(IRS.gov/HomeBuyer) tool provides information on 

your repayments and account balance.

32 Chapter 6 Estimated Tax Publication 554 (2023)
• The Sales Tax Deduction Calculator (IRS.gov/

SalesTax) figures the amount you can claim if you 

itemize deductions on Schedule A (Form 1040).

Getting answers to your tax questions. On 

IRS.gov, you can get up-to-date information on 

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that 

will ask you questions and, based on your input, provide answers on a number of tax topics.

• IRS.gov/Forms: Find forms, instructions, and publications. You will find details on the most recent tax 

changes and interactive links to help you find answers 

to your questions.

• You may also be able to access tax information in your 

e-filing software.

Need someone to prepare your tax return? There are 

various types of tax return preparers, including enrolled 

agents, certified public accountants (CPAs), accountants, 

and many others who don’t have professional credentials. 

If you choose to have someone prepare your tax return, 

choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification 

number (PTIN).

Although the tax preparer always signs the return, 

you're ultimately responsible for providing all the 

information required for the preparer to accurately 

prepare your return and for the accuracy of every item reported on the return. Anyone paid to prepare tax returns 

for others should have a thorough understanding of tax 

matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure 

W-2 filing options to CPAs, accountants, enrolled agents, 

and individuals who process Form W-2, Wage and Tax 

Statement, and Form W-2c, Corrected Wage and Tax 

Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the 

various social media tools the IRS uses to share the latest 

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our 

highest priority. We use these tools to share public information with you. Don’t post your social security number 

(SSN) or other confidential information on social media 

sites. Always protect your identity when using any social 

networking site.

CAUTION

!

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, 

Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations 

for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can 

find information on IRS.gov/MyLanguage if English isn’t 

your native language.

Free Over-the-Phone Interpreter (OPI) Service. The 

IRS is committed to serving taxpayers with limited-English 

proficiency (LEP) by offering OPI services. The OPI Service is a federally funded program and is available at Taxpayer Assistance Centers (TACs), most IRS offices, and 

every VITA/TCE tax return site. The OPI Service is accessible in more than 350 languages.

Accessibility Helpline available for taxpayers with 

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and 

future accessibility products and services available in alternative media formats (for example, braille, large print, 

audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or 

account-related issues, go to IRS.gov/LetUsHelp.

Note. Form 9000, Alternative Media Preference, or 

Form 9000(SP) allows you to elect to receive certain types 

of written correspondence in the following formats.

• Standard Print.

• Large Print.

• Braille.

• Audio (MP3).

• Plain Text File (TXT).

• Braille Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the 

available disaster tax relief.

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all the forms, instructions, and publications you may need. Or, you can go to 

IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook 

format. Download and view most tax publications and instructions (including the Instructions for Form 1040) on 

mobile devices as eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple's iBooks for 

iPad. Our eBooks haven’t been tested on other dedicated 

eBook readers, and eBook functionality may not operate 

as intended.

Publication 554 (2023) Chapter 7 How To Get Tax Help 33
Access your online account (individual taxpayers 

only). Go to IRS.gov/Account to securely access information about your federal tax account.

• View the amount you owe and a breakdown by tax 

year.

• See payment plan details or apply for a new payment 

plan.

• Make a payment or view 5 years of payment history 

and any pending or scheduled payments.

• Access your tax records, including key data from your 

most recent tax return, and transcripts.

• View digital copies of select notices from the IRS.

• Approve or reject authorization requests from tax professionals.

• View your address on file or manage your communication preferences.

Get a transcript of your return. With an online account, 

you can access a variety of information to help you during 

the filing season. You can get a transcript, review your 

most recently filed tax return, and get your adjusted gross 

income. Create or access your online account at IRS.gov/

Account.

Tax Pro Account. This tool lets your tax professional 

submit an authorization request to access your individual 

taxpayer IRS online account. For more information, go to 

IRS.gov/TaxProAccount.

Using direct deposit. The safest and easiest way to receive a tax refund is to e-file and choose direct deposit, 

which securely and electronically transfers your refund directly into your financial account. Direct deposit also 

avoids the possibility that your check could be lost, stolen, 

destroyed, or returned undeliverable to the IRS. Eight in 

10 taxpayers use direct deposit to receive their refunds. If 

you don’t have a bank account, go to IRS.gov/

DirectDeposit for more information on where to find a bank 

or credit union that can open an account online.

Reporting and resolving your tax-related identity 

theft issues. 

• Tax-related identity theft happens when someone 

steals your personal information to commit tax fraud. 

Your taxes can be affected if your SSN is used to file a 

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by 

email, text messages (including shortened links), telephone calls, or social media channels to request or 

verify personal or financial information. This includes 

requests for personal identification numbers (PINs), 

passwords, or similar information for credit cards, 

banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft 

Central webpage, for information on identity theft and 

data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or 

stolen or you suspect you’re a victim of tax-related 

identity theft, you can learn what steps you should 

take.

• Get an Identity Protection PIN (IP PIN). IP PINs are 

six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your 

SSN. To learn more, go to IRS.gov/IPPIN.

Ways to check on the status of your refund. 

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your mobile device to check your refund status.

• Call the automated refund hotline at 800-829-1954.

The IRS can’t issue refunds before mid-February 

for returns that claimed the EIC or the additional 

child tax credit (ACTC). This applies to the entire 

refund, not just the portion associated with these credits.

Making a tax payment. Payments of U.S. tax must be 

remitted to the IRS in U.S. dollars. Digital assets are not 

accepted. Go to IRS.gov/Payments for information on how 

to make a payment using any of the following options.

• IRS Direct Pay: Pay your individual tax bill or estimated 

tax payment directly from your checking or savings account at no cost to you.

• Debit Card, Credit Card, or Digital Wallet: Choose an 

approved payment processor to pay online or by 

phone.

• Electronic Funds Withdrawal: Schedule a payment 

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: Best option 

for businesses. Enrollment is required.

• Check or Money Order: Mail your payment to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes with cash at 

a participating retail store.

• Same-Day Wire: You may be able to do same-day 

wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to 

ensure that the electronic payments you make online, by 

phone, or from a mobile device using the IRS2Go app are 

safe and secure. Paying electronically is quick, easy, and 

faster than mailing in a check or money order.

What if I can’t pay now? Go to IRS.gov/Payments for 

more information about your options.

• Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once 

you complete the online process, you will receive immediate notification of whether your agreement has 

been approved.

CAUTION

!

34 Chapter 7 How To Get Tax Help Publication 554 (2023)
• Use the Offer in Compromise Pre-Qualifier to see if 

you can settle your tax debt for less than the full 

amount you owe. For more information on the Offer in 

Compromise program, go to IRS.gov/OIC.

Filing an amended return. Go to IRS.gov/Form1040X 

for information and updates.

Checking the status of your amended return. Go to 

IRS.gov/WMAR to track the status of Form 1040-X amended returns.

It can take up to 3 weeks from the date you filed 

your amended return for it to show up in our system, and processing it can take up to 16 weeks.

Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Responding to an IRS notice or letter. You can now 

upload responses to all notices and letters using the 

Document Upload Tool. For notices that require additional 

action, taxpayers will be redirected appropriately on 

IRS.gov to take further action. To learn more about the 

tool, go to IRS.gov/Upload.

Note. You can use Schedule LEP (Form 1040), Request for Change in Language Preference, to state a preference to receive notices, letters, or other written communications from the IRS in an alternative language. You may 

not immediately receive written communications in the requested language. The IRS’s commitment to LEP taxpayers is part of a multi-year timeline that began providing 

translations in 2023. You will continue to receive communications, including notices and letters, in English until they 

are translated to your preferred language.

Contacting your local TAC. Keep in mind, many questions can be answered on IRS.gov without visiting a TAC. 

Go to IRS.gov/LetUsHelp for the topics people ask about 

most. If you still need help, TACs provide tax help when a 

tax issue can’t be handled online or by phone. All TACs 

now provide service by appointment, so you’ll know in advance that you can get the service you need without long 

wait times. Before you visit, go to IRS.gov/TACLocator to 

find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, 

under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate 

Service (TAS) Is Here To Help 

You

What Is TAS?

TAS is an independent organization within the IRS that 

helps taxpayers and protects taxpayer rights. Their job is 

CAUTION

!

to ensure that every taxpayer is treated fairly and that you 

know and understand your rights under the Taxpayer Bill 

of Rights.

How Can You Learn About Your Taxpayer 

Rights?

The Taxpayer Bill of Rights describes 10 basic rights that 

all taxpayers have when dealing with the IRS. Go to 

TaxpayerAdvocate.IRS.gov to help you understand what 

these rights mean to you and how they apply. These are 

your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve 

with the IRS. And their service is free. If you qualify for 

their assistance, you will be assigned to one advocate 

who will work with you throughout the process and will do 

everything possible to resolve your issue. TAS can help 

you if:

• Your problem is causing financial difficulty for you, 

your family, or your business;

• You face (or your business is facing) an immediate 

threat of adverse action; or

• You’ve tried repeatedly to contact the IRS but no one 

has responded, or the IRS hasn’t responded by the 

date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, 

and Puerto Rico. To find your advocate’s number:

• Go to TaxpayerAdvocate.IRS.gov/Contact-Us;

• Download Pub. 1546, The Taxpayer Advocate Service 

Is Your Voice at the IRS, available at IRS.gov/pub/irspdf/p1546.pdf;

• Call the IRS toll free at 800-TAX-FORM 

(800-829-3676) to order a copy of Pub. 1546;

• Check your local directory; or

• Call TAS toll free at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect 

many taxpayers. If you know of one of these broad issues, 

report it to TAS at IRS.gov/SAMS. Be sure to not include 

any personal taxpayer information.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level 

and who need to resolve tax problems with the IRS. LITCs 

can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, 

LITCs can provide information about taxpayer rights and 

responsibilities in different languages for individuals who 

Publication 554 (2023) Chapter 7 How To Get Tax Help 35
speak English as a second language. Services are offered 

for free or a small fee. For more information or to find an 

LITC near you, go to the LITC page at 

TaxpayerAdvocate.IRS.gov/LITC or see IRS Pub. 4134, 

Low Income Taxpayer Clinic List, at IRS.gov/pub/irs-pdf/

p4134.pdf.

To help us develop a more useful index, please let us know if you have ideas for index entries.

Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Accelerated death benefits 16

Accounting periods:

Change in, standard deduction not 

allowed 20

Accrued leave payment:

Disability retirement and 15

Adjusted gross income (AGI) 19

Adjustments to income 19

Age:

Elderly or disabled credit, 

requirements for 27

Standard deduction for age 65 or 

older 20

American Association of Retired 

Persons (AARP) 3

Annuities 7

Assistance (See Tax help)

B

Base amount, social security 

benefits 12

Benefits:

Accident or health 15

Long-term care 15

No-fault insurance 15

Sickness and injury 14

Social security 12

Veterans' 18

Bequests 18

Blind persons:

Standard deduction for 20

C

Child and dependent care credit 29

Children:

Standard deduction for 21

Chronically ill persons 24

Chronically ill, defined 16

Compensation:

Compensatory damages 15

For services 6

Loss or disfigurement 15

Contributions:

Foreign employment 8

Pension or annuity 7

Cost, pension or annuity 7

Credits:

Child and dependent care 29

Earned income 29

Elderly or disabled 26

D

Death benefit, accelerated 16

Decedents 6

Standard deduction 20

Deductions:

Generally 20

Insurance premiums 25

Itemized 21

Meals and lodging 24

Medical and dental 21

Standard 20

Dependents 6

Standard deduction for 21

Disability 28

Credit for, permanently and totally 

disabled 26

Income 15, 28

Definition and exceptions, for 

elderly and disabled credit 28

Exclusions from, generally 19

Inclusions in, generally 19

Sale of home, for persons with 

(See (See Sale of home))

Distributions, retirement plan 6

Drugs (See Medicines)

Dual-status taxpayers:

Standard deduction 20

E

Early distributions, tax 10

Earned income credit 29

Elderly:

Credit for, persons who are 26

Employment tax withholding 2

Employment taxes 25

Endowment proceeds 16

Estimated tax 12, 32

Excess accumulation, tax on 10

Exclusion, gain on sale of home:

Expatriate tax, effect of 17

F

Federal Employees:

Compensation Act (FECA) 

payments 15

Filing requirements:

Decedents 6

General requirements 5

Surviving spouse 6

Final return for decedent:

Standard deduction 20

First-time homebuyer credit:

Repayment 17

Form:

1099-R 9, 10

5329 11

8853 16

Schedule R 26

W-4P 8

G

Gain on sale of home (See Sale of 

home)

General rule, pension or annuity 7

Gifts 18

H

Home care (See Nursing services)

Home improvements 23

Home, sale of (See Sale of home)

Hospital services 23

Household help 23

I

Income:

Adjustments 19

Disability payments, reporting 

for 14

Earned income, defined 29

Gross, defined 5

Nontaxable, generally 6

Sale of home 16

Self-employment 5

Taxable, generally 6

Individual retirement arrangement 

(IRA):

Adjustments to income 19

Contributions 20

Deductible contribution 20

Distributions 7

Inheritances 18

Injury benefits 14

Insurance:

Accident and health 15, 25

Benefits, long-term care 15

Benefits, no-fault insurance 15

Life insurance proceeds 15

Proceeds paid after death 15

Proceeds paid before death 16

Insurance premiums for retired 

public safety officers 11

Itemized deductions 21

Married filing separately:

One spouse has itemized 20

L

Life insurance proceeds 15

36 Publication 554 (2023)
Long-term care 24

Chronically ill individuals 24

Maintenance and personal care 

services 24

Qualified insurance contracts 24

Qualified services 24

Long-term care insurance 15

Loss or disfigurement 

compensation 15

Lump-sum death benefits 19

Lump-sum distributions 10

Lump-sum election, social 

security 14

M

Maintenance and personal care 

services 24

Married filing separately:

Itemized deductions:

One spouse has itemized so 

other must as well 20

Married taxpayers:

Age 65 or older spouse:

Standard deduction 21

Blind spouse:

Standard deduction 21

Meals and lodging expenses 24

Medical expenses 21

Medicare 25

Benefits 19

Medicines 25

Imported 25

Military retirement pay 11

Minimum distributions 10

Missing children 2

Mortgage assistance payments 19

N

Nonperiodic distributions 9

Nonqualified use 17

Nonresident aliens:

Standard deduction 20

Nontaxable income 19

Accident or health insurance 

benefits 15

Bequests 18

Generally 6

Gifts 18

Inheritances 18

Mortgage assistance payments 19

No-fault insurance benefits 15

Nutrition program for elderly 19

Public assistance payments 18

Sickness and injury benefits 14

Veterans' benefits 18

Winter energy use 19

Workers' compensation 15

Nursing home 24

Nursing services 25

Chronically ill individuals 24

Nutrition program for elderly 19

O

Other items 18

P

Payments, estimated tax 32

Pensions 7

Pensions, disability 14

Photographs, missing children 2

Prepaid insurance premiums 25

Preparer, paid 2

Preparing your return 3

Profit-sharing plan 15

Public assistance payments 18

Publications (See Tax help)

Q

Qualified retirement plan 10

R

Railroad retirement benefits 11, 12

Repayments:

Social security benefits 12

Reporting pension income 9

Residence, sale of (See Sale of 

home)

Retirement plans, distributions 6

Returns:

Decedent 6

Executors and administrators 6

Filing requirements 5

Surviving spouse 6

Reverse mortgages 18

S

Salaries (See Compensation)

Sale of home 17

Main home, definition of 16

Ownership and use test 17

Surviving spouse 18

Self-employed 5

Short tax year:

Change in annual accounting 

period 20

Sickness and injury benefits 14

Simplified method 7

How to use 8

Who can’t use 8

Who must use 8

Social security benefits 11

lump-sum payments attributable to 

prior years 19

Standard deduction 20

Age 65 or older 20

Blind persons 20

Dependents 21

Final return of decedent 20

Married filing separately:

One spouse has itemized 20

Starting date, annuity 8

State fund for victims of crime 19

Supplemental Security Income 

(SSI) benefits 19

Surrender of Iife insurance 16

Surviving spouse 6

Surviving spouse, insurance 16

Survivors of retirees 9

T

Tax:

Early distributions 10

Estimated 12, 32

Excess accumulation 10

Tax counseling for the elderly 

(TCE) 3

Tax help 32

Tax option, 10-year 10

Tax return preparers 2

Taxable income:

Generally 6

Taxation of benefits 12

Terminally ill, defined 16

Transportation expenses 25

U

U.S. citizen or resident alien:

Eligibility for elderly or disabled 

credit:

Exceptions for certain 

nonresident aliens 27

Filing requirements 5

Unemployment compensation 6

V

Veterans' benefits 18

Viatical settlement 16

Victims of crime 19

Volunteer income tax assistance 

(VITA) 3

Volunteer work 6

W

Wages (See Compensation)

Winter energy use payments 19

Withholding:

Employment tax 2

Pensions and annuities 8

Workers' compensation 15

Worksheets, social security 13

Publication 554 (2023) 37