CashoutGlossary / Schedule 1-A
Schedule 1-A
The Form 1040 schedule for the new deductions: No Tax on Tips, No Tax on Overtime, car loan interest and the enhanced deduction for seniors.
Schedule 1-A, Additional Deductions, is where you claim No Tax on Tips, No Tax on Overtime and two other new deductions. Its total goes to Form 1040 line 13a on the 2026 draft; on the 2025 form it was line 13b. The 2026 schedule, created June 16, 2026, is still a draft.
It has six parts:
- Part I: modified adjusted gross income (MAGI), used for the phase-outs
- Part II, No Tax on Tips: up to $25,000, reduced by $100 for each full $1,000 of MAGI over $150,000 ($300,000 joint)
- Part III, No Tax on Overtime: up to $12,500 ($25,000 joint), with the same thresholds
- Part IV: car loan interest, up to $10,000
- Part V: the enhanced deduction for seniors, $6,000 before its phase-out
- Part VI: the total
In Part II, employees list each employer and enter the larger of W-2 box 12 code TP or Form 4137 line 1, column (c). Self-employed workers enter tips from 1099 tip boxes, limited to the business's net profit.
These deductions come after AGI and work whether you itemize or not. If you're married, you must file jointly to take the tips or overtime deduction. Both lower income tax only, not Social Security, Medicare or self-employment tax.
Common mistake: entering tips straight from your own log. For 2026, Part II takes reported amounts from your W-2, your 1099s or Form 4137. Read how to claim No Tax on Tips line by line.
Related terms
Qualified tips · Qualified overtime · Form 1040 · Form 4137 · Treasury Tipped Occupation Code (TTOC)
