How Schedule 2 Is Organized
Schedule 2 has two parts. Each part sends its total to a different line on your Form 1040 return. You can also attach it to Form 1040-SR or Form 1040-NR.
Part I: Tax
Part I covers credits you need to pay back, plus the alternative minimum tax. Its total on line 3 goes to Form 1040, line 17.
| Line | What it covers | Form to attach |
|---|---|---|
| 1a | Excess advance premium tax credit repayment | Form 8962 |
| 1b–1c | Repayment of clean vehicle credits transferred to a dealer | Form 8936 |
| 1d–1f | Recapture or excessive payments of certain credits | Form 4255 |
| 2 | Alternative minimum tax | Form 6251 |
The premium tax credit helps you pay for health insurance bought through the Marketplace. If you got it in advance, it lowered your monthly premiums during the year. When those advance payments were more than you qualified for, you repay the difference using Form 8962.
Recapture means paying back part or all of a tax benefit (such as a credit) you claimed earlier. The alternative minimum tax (AMT) is a separate calculation that makes sure people with certain tax breaks still pay a minimum amount. You figure it on Form 6251.
Part II: Other Taxes
Part II covers taxes tied to certain kinds of income and tax-favored accounts, like IRAs. Its total on line 21 goes to Form 1040, line 23.
| Line | What it covers | Form to attach |
|---|---|---|
| 4 | Self-employment tax | Schedule SE |
| 5 | Additional tax on IRAs and other tax-favored accounts | Form 5329 |
| 6 | Net investment income tax | Form 8960 |
| 13 | Other taxes, including additional tax on health savings account (HSA) distributions | Form 8889 |
| 16a | Social Security and Medicare tax on unreported tip income | Form 4137 |
| 16b | Uncollected Social Security and Medicare tax on wages | Form 8919 |
| 17a | Household employment taxes | Schedule H |
| 17b | Additional Medicare Tax | Form 8959 |
Common Schedule 2 Taxes You Might Owe
Each of these common situations adds a tax to Part II.
- You earned $400 or more in net self-employment income, so you owe self-employment tax.
- You took an early withdrawal from an IRA, which can trigger an additional tax reported on Form 5329.
- You paid a household employee, such as a nanny, and owe household employment taxes.
- Your wages or self-employment income passed a set threshold, so you owe the 0.9% Additional Medicare Tax.
- You have investment income above certain levels and owe the 3.8% net investment income tax.
Self-employment tax is the Social Security and Medicare tax for people who work for themselves. The self-employment tax rate is 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare. You figure it on Schedule SE, and the result goes on Schedule 2, line 4.
The Additional Medicare Tax thresholds are $200,000 if you’re single and $250,000 if you’re married filing jointly. If you’re married filing separately, the threshold is $125,000.
When You Don’t Need Schedule 2
If none of these taxes apply to you, you skip Schedule 2. Tax software generally fills in Schedule 2 automatically when you enter the related information, such as freelance income or Marketplace health coverage. To see every line, review the official Schedule 2 form.
Sources
- IRS, Schedule 2 (Form 1040), Additional Taxes
- IRS, About Form 1040, U.S. Individual Income Tax Return
- IRS, About Form 8962, Premium Tax Credit
- IRS, About Form 6251, Alternative Minimum Tax - Individuals
- IRS, About Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts
- IRS, Net Investment Income Tax
- IRS, Self-Employment Tax (Social Security and Medicare Taxes)
