Schedule 3 of the IRS Form 1040 reports various credits and tax payments that can reduce the taxes owed.

Schedule 3 comprises Part 1 for Nonrefundable Credits and Part 2 for Other Refundable Credits and Tax Payments.

Part I – Nonrefundable Credits

A nonrefundable tax credit is a credit that can reduce your tax liability to zero but not below zero. Some of the nonrefundable credits reported on Schedule 3 include:

  • Foreign Tax Credits on Form 1116 (Foreign Tax Credit)
  • Credit for Child and Dependent Care Expenses reported on Form 2441 (Child and Dependent Care Expenses)
  • Education Credits: This includes the Lifetime Learning Credit and American Opportunity Tax Credit (AOTC) reported on Form 8863 (Education Credits)
  • Retirement Savings Contributions Credit reported on Form 8880
  • Residential Energy Credits reported on Form 5695 (Residential Energy Credits)
  • Clean Vehicle Credits reported on Form 8936 (Clean Vehicle Credits)
  • Mortgage Interest Credits reported on Form 8396 (Mortgage Interest Credit)
Part II – Other Payments and Refundable Credits

Refundable tax credits can reduce your tax liability dollar for dollar and, in some cases, result in a tax refund even if your tax liability is zero. Some of the tax payments and refundable credits reported on Schedule 3 include:

  • Net Premium Tax Credit on Form 8962 (Premium Tax Credit)
  • Taxes Paid with Request for Extension filed on Form 4868 (Extension of Time to File U.S. Tax Return)
  • Credit for Fuel Taxes Paid reported on Form 4136 (Credit For Federal Tax Paid on Fuels)
  • Excess Social Security and Tier 1 RRTA Tax Withheld: If a taxpayer has more than the maximum amount of Social Security tax withheld from their wages, they may be entitled to a refund of the excess amount. Excess withholding often happens when a taxpayer has more than one W-2 job during the tax year.
  • Other credits and payments
Sample Video Tutorials

Please visit our YouTube channel here for a walkthrough of the Form 1040 Schedule 3.

Additional Information

Taxpayers can find more information on the IRS website here.