IRS Releases Draft Version of Tax Year 2022 Form 1040
The IRS has released a draft version of Form 1040 for the tax year 2022, along with drafts of related forms and schedules.
The Form 1040 draft includes an expanded question on virtual currencies, which are referred to as digital assets in the updated question. Last year, the question was: "At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?" The draft form for 2022 asks, "At any time during 2022, did you: (a) receive (as a reward, award, or compensation); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)? (See instructions.)"
Line 1 to report amounts from Form W-2 has expanded to 10 sub-lines to separately report various types of wage-based income. Included are lines to report household employee wages not reported on Form(s) W-2; tip income not reported on line 1a; Medicaid waiver payments not reported on Form(s) W-2; taxable dependent care benefits from Form 2441, line 26; employer-provided adoption benefits from Form 8839, line 29; wages from Form 8919, line 6; other earned income; and a nontaxable combat pay election.
Another addition to the draft form is Line 6c, a checkbox to indicate the taxpayer is making a “lump sum election” for Social Security reporting.
Items removed from last year’s form include Line 12b for claiming the "non-itemizer" charitable deduction due to the expiration of that deduction. The sub-lines for Line 27, where the Earned Income Tax Credit (EITC) is claimed, have also been removed as the expanded COVID-related EITC provisions have ended.
Line 30, which was used last year for the Recovery Rebate Credit, is still on the 2022 Form 1040 draft. However, it is labeled "Reserved for future use."
The draft of Schedule 1, Additional Income and Adjustments to Income, has several lines added under Additional Income, including scholarship and fellowship grants not reported on Form W-2; nontaxable amount of Medicaid waiver payments included on Form 1040, line 1a or 1d; pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan; and wages earned while incarcerated.