What is the Qualified Dividends and Capital Gains Tax Worksheet?

The Qualified Dividends and Capital Gains Tax Worksheet is a tool provided by the IRS to help taxpayers calculate the tax on their qualified dividends and capital gains. This worksheet is used when you do not need to file Schedule D and meet certain conditions, such as being a full-time student aged 19 to 24, having no earned income exceeding half of your support, or not filing a joint return.

When to Use the Worksheet

When you have qualified dividends or capital gains and do not need to use the Schedule D Tax Worksheet.
If you are a full-time student aged 19 to 24 and your earned income is less than half of your support.
If you are not filing a joint return.
If you are calculating estimated tax for 2025, as referenced in Publication 505.

How to Complete the Worksheet

The worksheet includes specific lines that must be completed based on your tax situation. For example:

Line 6: Enter the amount from line 20 of the worksheet.
Line 8: Enter the amount from line 17 of the worksheet.
Line 10: Enter the amount from line 9 of the worksheet.

After completing the worksheet, you may need to use the results on other forms, such as Form 1116 for foreign tax credits or Form 2210 for estimated tax payments. The tax on the amount calculated should be figured using the 2025 Tax Rate Schedules, and you enter the smaller of the calculated tax or the tax from line 38 on Part I, line 4 of Form 2210.

Important Thresholds

If you are married filing jointly or qualifying surviving spouse, line 5 of the worksheet must not exceed $394,600.
If you are single, head of household, or married filing separately, line 5 must not exceed $197,300.
The foreign source net capital gain plus foreign source qualified dividends must be less than $20,000.

Additionally, if you have a capital gain excess, you may need to complete a second worksheet with modifications for purposes of filling out the Foreign Earned Income Tax Worksheet.

Source:

Form 1040 Instructions

Form 1116 Instructions

Form 2210 Instructions

Publication 505

Disclaimer: Always verify with Federal or State Department of Revenue Forms and Instructions for the most accurate and up-to-date information.