you may be eligible for an enhanced deduction for seniors. Your deduction will be limited if your modified adjusted gross income is more than $75,000 ($150,000 if married filing jointly). To be eligible, you and/or your spouse must have a valid SSN. If you are married, you must file a joint return. The maximum amount of the deduction is $6,000 ($12,000 if both spouses are eligible).
New Schedule 1-A. A new schedule to Form 1040, Schedule 1-A, has been created for taxpayers to claim a deduction for the recently enacted deductions for no tax on tips, no tax on overtime, no tax on car loan interest, and the enhanced deduction for seniors. For more information, see the instructions for Schedule 1-A.
State and local tax deduction limit increased. The overall limit on the deduction for state and local income, sales, and property taxes has increased to $40,000 ($20,000 if married filing separately). The overall limit is reduced if your modified adjusted gross income is more than $500,000 ($250,000 if married filing separately) but will not be reduced below $10,000 ($5,000 if married filing separately). For more information, see the Instructions for Schedule A.
Changes to the child tax credit and additional child tax credit. Recent legislation made permanent the increase to the child tax credit (CTC) and additional child tax credit (ACTC) amount. For 2025, the maximum CTC has increased
to $2,200 per qualifying child, of which $1,700 can be claimed for the ACTC. In addition, beginning in 2025, to be eligible to claim the CTC or ACTC, you must have a valid SSN, which means it must be valid for employment and issued before the due date of your return (including extensions). If you are filing a joint return, only one spouse is required to have a valid SSN in order to be eligible for the CTC and ACTC. The other spouse must have either an SSN or ITIN, and it must have been issued on or before the due date of the return (including extensions).
Changes to the adoption credit. Recent legislation made changes to the adoption credit. Beginning in 2025:
• Up to $5,000 of adoption credit is refundable. Up to $5,000 of your adoption credit may be refundable. The amount of the refundable portion is determined separately for each eligible child.
• Parity for Indian tribal governments. Tribal governments now have parity for special needs adoption determinations. This means that state government and Indian tribal government determinations of special needs are both recognized for purposes of the adoption credit.
For more information, see Form 8839 and its instructions.
Election to pay tax on farmland sale or exchange in installments. If your tax year began after July 4, 2025, and
you sold or exchanged qualified farmland to a qualified farmer after that date, you can elect to pay the net income tax liability on the sale or exchange in four equal installments. For more information, see the instructions for Schedule 3. Also, see Form 1062 and its instructions.
Domestic research and experimental expenditures. Beginning in 2025, taxpayers are allowed to deduct domestic research or experimental expenditures. Alternatively, taxpayers may elect to charge their domestic research or experimental expenditures to a capital account and deduct them ratably over a period of not less than 60 months (beginning with the month in which the taxpayers first realize the benefits from such expenditures).
Updated reporting requirements for Form 1099-K. Payment card companies, payment apps, and online marketplaces will be required to send you a Form 1099-K only if the amount of your business transactions during the year is more than $20,000 and the total number of your transactions is more than 200.
New option for scheduled appointments at Taxpayer Assistance Centers (TAC). Beginning in 2025, taxpayers with scheduled appointments at TACs may choose to receive appointment confirmations, reminders, and cancellation notices directly via text message on their mobile devices.