Form 1040 Schedule 3: Additional Credits and Payments (2019)
What Form 1040 Schedule 3 Is For
Schedule 3 is an attachment to your main Form 1040 or Form 1040-SR tax return that allows you to claim tax credits and report payments that don't fit on the main form. Think of it as the "extra credits and payments" page—a place to tell the IRS about special tax breaks you qualify for or additional payments you've already made toward your tax bill.
The form has two main parts. Part I covers "nonrefundable credits"—credits that can reduce your tax bill to zero but won't generate a refund beyond what you've already paid in. Part II covers "other payments and refundable credits"—amounts you've already paid (like estimated tax payments) or credits that can actually result in a refund check.
For 2019, Schedule 3 combined what were previously two separate schedules (2018's Schedules 3 and 5), making it a one-stop shop for these additional items. You only need to file Schedule 3 if you're claiming credits beyond the standard child tax credit or credit for other dependents, or if you made certain payments during the year.
IRS Form 1040 Schedule 3 (2019)
When You'd Use Form 1040 Schedule 3
During Original Filing
You'll use Schedule 3 when filing your 2019 tax return if any of these situations apply to you:
During Original Filing: You need Schedule 3 if you paid foreign taxes, had child or dependent care expenses, went to college, saved for retirement through certain accounts, made energy-efficient home improvements, or received health insurance through the Marketplace with advance premium tax credits. You'll also use it if you made estimated tax payments, paid extra when you filed for an extension, or had multiple employers that over-withheld Social Security taxes.
Late Filing
Late Filing: If you missed the April 15, 2020 deadline, you can still file Schedule 3 with your late return. However, you may owe interest and penalties on any unpaid taxes. If you qualified for an automatic extension by filing Form 4868 or making an electronic payment by the due date, you had until October 15, 2020 to file without late-filing penalties (though interest would still apply to unpaid taxes).
Amended Returns
Amended Returns: If you discover you forgot to claim a credit or payment after filing your original 2019 return, you'll need to file Form 1040-X (Amended U.S. Individual Income Tax Return) and attach a corrected Schedule 3. Generally, you must file an amended return within three years of your original filing date or within two years of paying the tax, whichever is later, to claim a refund.
IRS Instructions for Form 1040 (2019)
Key Rules or Details for 2019
Nonrefundable vs. Refundable Credits: Understanding this distinction is crucial. Nonrefundable credits (Part I) can only reduce your tax liability to zero—they can't create a refund beyond what you've already paid through withholding or estimated payments. Refundable credits and payments (Part II) can result in money back even if you owe no tax.
Income Limits Apply: Many credits have income phase-outs. For example, education credits become unavailable if your adjusted gross income exceeds $90,000 ($180,000 if married filing jointly). The retirement savings contributions credit phases out completely at $64,000 for joint filers. Always check whether your income disqualifies you from a particular credit.
Filing Status Matters: Certain credits aren't available if you're married filing separately. The education credits, for instance, specifically exclude taxpayers using this filing status.
Documentation is Required: Almost every line on Schedule 3 requires you to attach supporting forms. Claiming the foreign tax credit? You'll likely need Form 1116. Education credits? Attach Form 8863. Missing these forms will delay your return processing or result in denied credits.
You Can't Double-Dip: You cannot claim both an education credit and a tuition and fees deduction for the same student in the same year. Choose the option that provides the greatest tax benefit.
Premium Tax Credit Reconciliation is Mandatory: If you or a family member had Marketplace health insurance with advance premium tax credit payments in 2019, you must file Schedule 3 (along with Form 8962) to reconcile those advance payments with your actual premium tax credit—even if you wouldn't otherwise need to file a tax return.
Step-by-Step (High Level)
Step 1: Gather Your Documentation
Before filling out Schedule 3, collect all relevant forms: Forms 1099 for foreign taxes, Form 2441 if you paid for child care, Form 1098-T for education expenses, receipts for energy improvements, Form 1095-A if you had Marketplace insurance, and records of estimated tax payments.
Step 2: Complete Supporting Forms First
Schedule 3 is a summary sheet. You must complete the underlying forms that calculate each credit before transferring amounts to Schedule 3. For instance, complete Form 8863 to calculate education credits, then transfer the result to Schedule 3, line 3.
Step 3: Fill Out Part I (Nonrefundable Credits)
Work through lines 1-7 in order. Enter the foreign tax credit on line 1, child and dependent care credit on line 2, education credits on line 3, retirement savings credit on line 4, residential energy credits on line 5, and other applicable credits on line 6. Add these amounts and enter the total on line 7.
Step 4: Fill Out Part II (Other Payments and Refundable Credits)
Enter your estimated tax payments (including any overpayment from your 2018 return applied to 2019) on line 8. If you had Marketplace insurance, enter the net premium tax credit from Form 8962 on line 9. Report extension payments on line 10, excess Social Security withholding on line 11, fuel tax credits on line 12, and any other applicable credits on line 13. Total these amounts on line 14.
Step 5: Transfer Totals to Form 1040
The total from Part I, line 7 goes to Form 1040, line 13b. The total from Part II, line 14 goes to Form 1040, line 18d. These transfers ensure your credits and payments reduce your tax liability or increase your refund.
Step 6: Attach Schedule 3 and Supporting Forms
Attach Schedule 3 to your Form 1040 or Form 1040-SR, along with all required supporting forms. If you e-file, your tax software will bundle everything together automatically.
Common Mistakes and How to Avoid Them
Forgetting to Attach Required Forms: This is the most common error. Each credit requires specific documentation. Create a checklist based on which lines you're completing and verify you've included every required form before mailing or e-filing.
Claiming Credits You Don't Qualify For: Many taxpayers claim credits without checking eligibility requirements. Before completing any line, verify you meet income limits, filing status requirements, and other conditions. The IRS computers will catch these errors, delaying your refund or triggering adjustment letters.
Math Errors and Incorrect Totals: While simple addition seems straightforward, mistakes happen. Double-check that line 7 correctly totals lines 1-6, and line 14 correctly totals lines 8-13. If you're paper-filing, use a calculator and check your work twice.
Double-Claiming Education Benefits: Don't claim both an education credit (Schedule 3, line 3) and the tuition and fees deduction (Schedule 1, line 21) for the same student. Compare the tax benefit of each option using worksheets in the instructions and choose one.
Incorrect Social Security Excess Calculation: If you had multiple employers and earned over $132,900 in 2019, you may have had more than $8,239.80 withheld in Social Security taxes. Line 11 is for the excess only—not your total withholding. Calculate carefully using wages from all W-2 forms.
Missing Premium Tax Credit Reconciliation: If you received advance premium tax credit payments for Marketplace insurance, you must complete Form 8962 and report the result on Schedule 3, line 9, even if the net is zero. Failing to reconcile can result in delayed refunds and penalties.
Using the Wrong Year's Forms: Always use 2019 forms for your 2019 tax return. Forms change annually, and using 2018 or 2020 versions will cause processing delays. Download forms directly from IRS.gov to ensure you have the correct version.
What Happens After You File
Processing Timeline: The IRS typically processes e-filed returns with direct deposit within 21 days. Paper returns take six to eight weeks. However, returns claiming certain credits (like the earned income credit or additional child tax credit) are held until mid-February under federal law, even if filed earlier.
Verification and Matching: The IRS computers match the amounts on your Schedule 3 against information from third parties—Forms W-2 from employers, Forms 1099 from banks and investment firms, and Forms 1095-A from the Marketplace. Discrepancies trigger notices requesting clarification or automatically adjusting your return.
If Credits Are Denied or Reduced: If the IRS finds you claimed a credit improperly, you'll receive a notice explaining the adjustment and any additional tax owed. You have the right to dispute the adjustment by providing documentation or explanation. Respond to all notices within the specified timeframe (usually 30 days) to avoid additional penalties.
Refunds and Direct Deposit: If Schedule 3 increases your refund (through refundable credits or payments), the IRS will issue payment via your chosen method—direct deposit (fastest) or paper check. You can track your refund using the "Where's My Refund?" tool on IRS.gov starting 24 hours after e-filing or four weeks after mailing a paper return.
Audit Considerations: Certain credits have higher audit rates than others. Education credits and the premium tax credit are frequently scrutinized. Keep all supporting documentation (receipts, tuition statements, insurance forms) for at least three years after filing. If audited, you'll need to prove you qualified for the credits claimed.
Amended Return Tracking: If you file an amended return with a corrected Schedule 3, processing takes significantly longer—typically up to 16 weeks. Use the "Where's My Amended Return?" tool on IRS.gov to track status. Amended return refunds are always issued by paper check, never via direct deposit.
FAQs
Do I need Schedule 3 if I only have the child tax credit?
No. The child tax credit and credit for other dependents are claimed directly on Form 1040, line 13a. You only need Schedule 3 for additional credits like education credits, foreign tax credits, or dependent care credits.
Can I claim the foreign tax credit without filing Form 1116?
Yes, but only if you meet all five requirements: your foreign income was only interest and dividends reported on Forms 1099, your foreign taxes were $300 or less ($600 if married filing jointly), you held the investments for at least 16 days, you're not excluding Puerto Rico income, and the taxes were legally owed to recognized countries that don't support terrorism. If all conditions are met, enter the credit directly on Schedule 3, line 1 without Form 1116.
What if I made estimated tax payments but don't have records?
You can request a transcript of your account from the IRS showing payments made during 2019. Visit IRS.gov and use the "Get Transcript" tool, or call 800-908-9946. The transcript will show the dates and amounts of all payments credited to your account.
I received Form 1095-A but didn't receive advance payments—do I still need to file Schedule 3?
If no advance payments were made (all zeros in column B of Form 1095-A), you may still claim the premium tax credit if you're eligible. Complete Form 8962 to calculate the credit and enter the result on Schedule 3, line 9. However, if your income exceeded 400% of the federal poverty line for your household size, you won't qualify for any premium tax credit.
Can I claim both the American Opportunity Credit and the Lifetime Learning Credit on the same return?
Yes, but not for the same student in the same year. If you have multiple students in your family, you can claim the American Opportunity Credit for one student and the Lifetime Learning Credit for another, as long as each student meets the respective credit requirements.
What happens if my employer withheld too much Social Security tax?
If you had multiple employers and total wages exceeded $132,900 in 2019, Social Security withholding over $8,239.80 is refundable. Calculate the excess and enter it on Schedule 3, line 11. If you had only one employer that withheld too much, you can't claim it here—your employer must refund the excess directly to you.
I forgot to claim a credit on my original return—is it too late?
Not necessarily. You can file an amended return using Form 1040-X with a corrected Schedule 3, but you must do so within three years of the original filing date or within two years of paying the tax, whichever is later. After these deadlines, you generally cannot claim refunds for overlooked credits.
