What Form 1040 Schedule 3 (2019) Is For
Form 1040 Schedule 3 (2019) is used to report nonrefundable tax credits that do not appear directly on Form 1040. These nonrefundable credits help reduce your income tax but cannot increase your tax refund beyond the amount you already paid during the year. Many taxpayers use this schedule when they qualify for credits that fall outside the basic Child Tax Credit.
Part I lists the most common nonrefundable credits, including the foreign tax credit, the dependent care tax credit, education credits such as the American Opportunity Tax Credit and the Lifetime Learning Credit, the Retirement Savings Contributions Credit, and certain residential energy credits. These credits lower your tax bill but do not create a refundable amount on their own.
When You’d Use Form 1040 Schedule 3 (2019)
During Original Filing
You’ll use Schedule 3 when filing your 2019 income tax return if you qualify for nonrefundable tax credits not listed directly on Form 1040. These include the foreign tax credit, the dependent care tax credit, education credits such as the American Opportunity Tax Credit and Lifetime Learning Credit, and the Retirement Savings Contributions Credit. Taxpayers also use this schedule when credits depend on education expenses, earned income, or certain types of investment income.
Late Filing for 2019
If you filed after the April 2020 deadline, you may still claim these credits as long as you submit the correct 2019 forms. Low-income taxpayers and those filing jointly or married filing separately may still qualify for credits that reduce their tax liability, even if they file late.
Amended Returns
You’ll also use Schedule 3 if you need to correct a 2019 tax return. When filing Form 1040-X, attach a revised Schedule 3 to claim a credit you missed, adjust a credit amount, or correct an eligibility issue.
Use our Unfiled Federal Returns resource for guidance if you still need to file a late 2019 return or claim missed nonrefundable credits.
Key Rules or Details for the 2019 Tax Year
Several rules govern the application of nonrefundable tax credits on Schedule 3 for the 2019 tax year. These rules help determine who qualifies, how credit amounts are calculated, and which forms must be attached to support each claim.
- Income limits apply: Education credits, such as the American Opportunity Tax Credit and the Lifetime Learning Credit, phase out at higher income levels. The retirement savings contributions credit also has strict income thresholds that can reduce or remove the credit amount.
- Filing status affects eligibility: Some nonrefundable credits are not available if you are married filing separately, while different limits may apply when married filing jointly.
- Documentation is required: Many credits on Schedule 3 need additional forms, such as Form 1116 for the foreign tax credit, Form 2441 for the dependent care tax credit, or Form 8863 for education credits tied to higher education expenses.
- No double-claiming of benefits: You cannot use the same education expenses to claim multiple education credits. Each credit must be supported by its own eligible costs.
- Use the correct tax year forms: Always use the 2019 versions of Form 1040, Schedule 3, and supporting credit forms to avoid delays or adjustments.
Step-by-Step (High Level)
Step 1 — Gather Required Information
Start by collecting the records you need to claim nonrefundable tax credits on IRS Form 1040 Schedule 3 (2019). This step helps you confirm eligibility and prevents missing information that could delay your return.
Step 2 — Complete Supporting Forms
Before filling out Schedule 3, complete the required credit forms, such as Form 8863, Form 1116, and Form 2441. Doing this first ensures that each credit amount is calculated correctly before you transfer it to Schedule 3.
Step 3 — Fill Out Part I of Schedule 3
Enter each calculated credit amount on the correct line in Part I, then add them to find your total nonrefundable credit. Taking your time with these entries helps reduce errors that may affect your tax bill.
Step 4 — Transfer Totals to Form 1040
Transfer the Part I total to the appropriate line on Form 1040 to help reduce your tax liability for the 2019 tax year. This step ensures the credits are included correctly in your final tax return.
Common Mistakes and How to Avoid Them
Taxpayers often encounter issues when completing IRS Form 1040, Schedule 3 (2019), especially when dealing with nonrefundable credits that support various situations and income levels. Understanding common mistakes can help you avoid delays and ensure an accurate return.
- Claiming credits you do not qualify for: Review income limits, filing status rules, and education expense requirements before claiming any credit. Even though the earned income tax credit and the additional child tax credit are not listed on Schedule 3, eligibility rules can still affect your return.
- Using incorrect income limits or phase-outs: Income rules affect how most tax credits work, including those with a maximum credit or partially refundable features. Always double-check 2019 limits to avoid incorrect entries.
- Math and transfer errors: Adding credit amounts incorrectly or entering totals on the wrong line can create issues with other payments, refunds, or Social Security withholding shown on Form 1040. Review our CP12 notice guide to understand how the IRS corrects math errors and adjusts credits when entries on Schedule 3 need verification.
- Using the wrong form year: Use only the 2019 versions of all forms, even if they were last reviewed or updated in a later year.
What Happens After You File
After you file Schedule 3, the IRS reviews your return to verify each income tax credit and nonrefundable credit. The agency checks forms from employers, schools, and health insurance providers to confirm entries such as the premium tax credit, dependent care credit, or the saver’s credit.
If a refundable portion applies, the IRS ensures the credit amount matches your records. Your federal tax may be adjusted if you owe more or if a student was claimed as a dependent. Explore IRS Payment Plan options if your return shows additional tax after applying nonrefundable credits or credit adjustments.
FAQs
Do I need to file Schedule 3 if I am only claiming the Child Tax Credit?
No, the Child Tax Credit appears directly on Form 1040, so you do not need to use Schedule 3 unless you qualify for other nonrefundable tax credits that must be listed separately.
Can I claim the foreign tax credit without filing Form 1116?
Yes, in limited cases. If the credit amount is small and meets IRS requirements, you may enter this nonrefundable credit directly on Schedule 3 without completing the full form.
What documents are required to claim education credits?
You will need Form 1098-T and Form 8863 to claim education credits, such as the American Opportunity Tax Credit or the Lifetime Learning Credit. These forms confirm tuition costs and other eligible education expenses.
What should I do if I forgot to claim a 2019 tax credit?
You can file Form 1040-X and attach an updated Schedule 3. This applies to credits based on earned income, higher education, or other qualifying expenses.
Does filing Schedule 3 delay my tax return?
Not usually, delays happen when forms are missing or when the IRS must verify an income tax credit, dependent care tax credit, or other entry tied to your income tax records.
