Schedule 3 on your tax return is a one-page attachment to Form 1040 where you report tax credits and certain payments that don’t have their own line on the main form. It has two parts: Part I collects nonrefundable credits, which can reduce your tax to zero but no further, and Part II collects refundable credits and other payments, which can increase your refund even if you owe nothing. If you claimed a foreign tax credit, paid for child or dependent care so you could work, bought Marketplace health insurance, or sent a payment with a filing extension, the amounts land here.1Internal Revenue Service. 2025 Schedule 3 (Form 1040)
Part I: Nonrefundable Credits
Nonrefundable credits cut your tax bill dollar for dollar, but they stop once your tax hits zero. Anything left over generally disappears. The total from Part I flows to Form 1040, line 20, where it joins other credits to reduce what you owe.1Internal Revenue Service. 2025 Schedule 3 (Form 1040)
Foreign Tax Credit
Line 1 is the foreign tax credit, which keeps you from being taxed twice on income a foreign government has already taxed.2Internal Revenue Service. Foreign Tax Credit Most filers calculate it on Form 1116, but if your foreign taxes are small and you meet certain conditions, you can skip Form 1116 and enter the amount directly.3Internal Revenue Service. Publication 514 (2025), Foreign Tax Credit for Individuals
Child and Dependent Care Credit
Line 2 is for the credit for child and dependent care expenses. If you paid someone to care for your child or another qualifying dependent so you could work or look for work, part of that cost comes back as a credit.4Internal Revenue Service. 2025 Instructions for Form 2441 Child and Dependent Care Expenses You calculate it on Form 2441, with qualifying expenses capped at $3,000 for one dependent or $6,000 for two or more.5Internal Revenue Service. Child and Dependent Care Expenses The credit itself is 20% to 35% of those expenses, depending on income.
Education Credits
Line 3 captures education credits from Form 8863. Two credits exist: the American Opportunity Tax Credit and the Lifetime Learning Credit.6Internal Revenue Service. Education Credits: American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) One detail matters here: the AOTC is partially refundable, and up to $1,000 (40% of the credit) can come back to you even if your tax is zero. That refundable portion goes on Form 1040, line 29, not on Schedule 3.7Internal Revenue Service. Refundable Tax Credits Only the nonrefundable piece shows up on Schedule 3, line 3. The Lifetime Learning Credit is entirely nonrefundable.
Saver’s Credit
Line 4 is the Retirement Savings Contributions Credit, known as the Saver’s Credit. It rewards low- and moderate-income earners for contributing to a 401(k), IRA, 403(b), or SIMPLE plan, and equals 10%, 20%, or 50% of the contribution depending on income and filing status. You calculate it on Form 8880.8Internal Revenue Service. Retirement Savings Contributions Credit (Saver’s Credit) For 2026, it phases out completely at $80,500 for married couples filing jointly, $60,375 for heads of household, and $40,250 for single filers.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
Residential Energy Credits
Lines 5a and 5b are the two residential energy credits, both calculated on Form 5695. Line 5a is the residential clean energy credit, which covered 30% of the cost of solar panels, wind turbines, geothermal heat pumps, and similar installations. It applies to property placed in service through December 31, 2025, so it’s still on 2025 returns filed in 2026 but not available for new installations in 2026.10Internal Revenue Service. Residential Clean Energy Credit Line 5b is the energy efficient home improvement credit for upgrades like heat pumps, insulation, and energy-efficient windows.11Internal Revenue Service. Energy Efficient Home Improvement Credit
Other Nonrefundable Credits
Lines 6a through 6z house less common nonrefundable credits: the general business credit (Form 3800), credit for prior year minimum tax (Form 8801), adoption credit (Form 8839), credit for the elderly or disabled (Schedule R), clean vehicle credits (Form 8936), and others.1Internal Revenue Service. 2025 Schedule 3 (Form 1040) The adoption credit covers up to $17,280 in qualified adoption expenses per child for 2025 and phases out for higher earners. Beginning in 2025, up to $5,000 of the adoption credit is refundable if your tax liability is zero.12Internal Revenue Service. Adoption Credit
Part II: Refundable Credits and Other Payments
Part II is where money can come back to you even if you owe no tax. The total flows to Form 1040, line 31.1Internal Revenue Service. 2025 Schedule 3 (Form 1040)
Net Premium Tax Credit
Line 9 is the net premium tax credit for people who bought health insurance through the Marketplace. This refundable credit helps cover monthly premiums based on income and family size. If you took advance payments during the year, you reconcile them on Form 8962 when you file. When the credit you’re entitled to is larger than what was already paid on your behalf, the difference lands here and increases your refund.13Internal Revenue Service. Premium Tax Credit (PTC) Overview
Extension Payments
Line 10 is for any payment you sent with a request for an automatic extension to file. Filing Form 4868 extends your paperwork deadline by six months, not your payment deadline. Any tax you owe is still due by the original April date.14Internal Revenue Service. Get an Extension to File Your Tax Return People commonly send an estimated payment with the extension to avoid the late-payment penalty, which runs 0.5% of unpaid taxes each month the balance stays outstanding.15Internal Revenue Service. Failure to Pay Penalty Line 10 gives you credit for what you already paid.
Excess Social Security Tax Withheld
Line 11 catches people off guard. Social Security tax only applies to earnings up to an annual cap. For 2026, that cap is $184,500.16Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet If you worked for two or more employers and your combined wages exceeded that limit, each employer withheld Social Security tax independently and probably took more than you actually owe. Line 11 is where you claim the overpayment back. The line also covers excess Tier 1 railroad retirement tax for railroad workers.
Other Part II Items
Line 12 is the credit for federal tax on fuels (Form 4136), which mostly applies to farmers, fishers, and certain business operators who use fuel for off-highway purposes. Lines 13a through 13z pick up specialized items like undistributed capital gains from Form 2439, credits for repaying income included in earlier years, and elective payment election amounts from Form 3800.1Internal Revenue Service. 2025 Schedule 3 (Form 1040)
How the Totals Move to Form 1040
Schedule 3 funnels into two specific spots on your main return. The Part I total (line 8) goes to Form 1040, line 20, and joins other credits reducing the tax you owe. The Part II total (line 15) goes to Form 1040, line 31, and joins withholding and estimated payments when deciding whether you overpaid or still owe.1Internal Revenue Service. 2025 Schedule 3 (Form 1040) Tax software handles those transfers automatically. If you file on paper, attach Schedule 3 behind Form 1040 in numerical order along with the supporting forms it references (Form 1116, Form 2441, Form 8962, and so on).
What Does Not Go on Schedule 3
Some credits and payments look like they belong on Schedule 3 but go elsewhere. The Child Tax Credit and Additional Child Tax Credit are calculated on Schedule 8812 and entered directly on Form 1040. The Earned Income Tax Credit also goes straight on Form 1040. Estimated tax payments made quarterly through the year on Form 1040-ES belong on Form 1040, line 26. And if your advance premium tax credit payments turned out larger than what you were entitled to, the repayment goes on Schedule 2, not Schedule 3.13Internal Revenue Service. Premium Tax Credit (PTC) Overview
Records to Keep for What You Claim
Every credit on Schedule 3 needs documentation you can produce if the IRS asks. For the child and dependent care credit, keep receipts and the care provider’s tax identification number. For the foreign tax credit, keep proof of foreign taxes paid. For the premium tax credit, keep Form 1095-A from the Marketplace. The IRS says to keep records supporting credits for at least three years after filing, or two years after paying the tax, whichever is later.17Internal Revenue Service. How Long Should I Keep Records Three full years after the filing deadline is the safest baseline, since that lines up with the statute of limitations for claiming a missed credit or responding to an audit.