Qualified Dividends and Capital Gain Tax Worksheet, Line 16

What is the Qualified Dividends and Capital Gain Tax Worksheet?

The Qualified Dividends and Capital Gain Tax Worksheet is not a separate IRS form. It is a one-page worksheet printed in the Instructions for Form 1040, in the instructions for line 16 (Tax). Use this worksheet only when the eligibility conditions below apply.

The worksheet is marked "Keep for Your Records": you do not send it to the IRS. For filers who are not filing Form 2555, only its result, the tax on all taxable income from the last line, goes on Form 1040 or 1040-SR, line 16.

The current worksheet is the one in the 2025 Instructions for Form 1040, used with 2025 tax returns. The blank above is that page (page 38 of the instructions).

Who uses this worksheet

Use the Qualified Dividends and Capital Gain Tax Worksheet to figure your tax if you do not have to use the Schedule D Tax Worksheet and any of the following applies:

• you reported qualified dividends on Form 1040 or 1040-SR, line 3a;
• you do not have to file Schedule D and you reported capital gain distributions on Form 1040 or 1040-SR, line 7a;
• you are filing Schedule D, and Schedule D, lines 15 and 16, are both more than zero.

For Form 2555, follow the Foreign Earned Income Tax Worksheet and its footnote; do not use the simplified steps below.

How to fill out the worksheet

The steps below apply only if you are not filing Form 2555 and meet the conditions above.

1. Complete Form 1040 or 1040-SR through line 15 (taxable income) first. Line 1 of the worksheet is the amount from line 15. 2. On line 2, enter your qualified dividends from Form 1040 or 1040-SR, line 3a. 3. On line 3, enter the smaller of Schedule D, line 15 or line 16, if you file Schedule D (enter 0 if either line is blank or a loss); otherwise enter the capital gain distributions from Form 1040 or 1040-SR, line 7a. 4. Follow lines 4 to 21 as printed. They split your qualified dividends and net capital gain into the part taxed at 0%, the part taxed at 15% and the part taxed at 20%, using the amounts for your filing status printed on lines 6 and 13. 5. Line 22 taxes the remainder. Line 23 adds the components; line 24 calculates the regular-rate comparison on all taxable income. 6. Line 25 is the smaller of lines 23 and 24. Enter it on Form 1040 or 1040-SR, line 16, and keep the worksheet with your records.

The full line 16 instructions, the Tax Table and the other worksheets are in the 2025 Instructions for Form 1040 on IRS.gov (irs.gov/pub/irs-pdf/i1040gi.pdf).