 
 
Part III 
 
 
Administrative, Procedural, and Miscellaneous  
 
 
 
26 CFR 601.602:  Tax forms and instructions.  
(Also Part I, §§ 1, 23, 24, 32, 36B, 42, 45R, 55, 59, 62, 63, 125, 132(f), 135, 137, 146, 147, 
148, 152, 179, 179D, 199A, 213, 220, 221, 448, 461, 512, 513, 642, 831, 877, 877A, 911, 
1274A, 2010, 2032A, 2503, 2523, 4161, 4261, 4611, 6033, 6039F, 6323, 6334, 6601, 6651, 
6652, 6695, 6698, 6699, 6721, 6722, 7345, 7430, 7702B, 9831; 1.148-5.)  
 
 
 
 
 
 
 
 
 
Rev. Proc. 2024-40 
 
 
 
Table of Contents 
SECTION 1. PURPOSE 
SECTION 2. 2025 ADJUSTED ITEMS  
Code Section1 
.01 Tax Rate Tables ........................................................................................ 1(j)(2) (A)-(E) 
.02 Unearned Income of Minor Children Subject to the “Kiddie Tax”  ........................... 1(g) 
.03 Maximum Capital Gains Rate .................................................................................. 1(h) 
.04 Adoption Credit ........................................................................................................... 23 
.05 Child Tax Credit ........................................................................................................... 24 
.06 Earned Income Credit ................................................................................................. 32 
.07 Refundable Credit for Coverage Under a Qualified Health Plan .............. 36B(f)(2)(B) 
.08 Rehabilitation Expenditures Treated as Separate New Building  ......................... 42(e) 
 
1 Unless otherwise specified, all references to “section” or “§” are to provisions of the Internal Revenue Code 
(Code). 
2 
.09 Low-Income Housing Credit .................................................................................. 42(h) 
.10 Employee Health Insurance Expense of Small Employers  .................................... 45R 
.11 Exemption Amounts for Alternative Minimum Tax ..................................................... 55 
.12 Alternative Minimum Tax Exemption for a Child Subject to the  
“Kiddie Tax” ............................................................................................................. 59(j) 
.13 Certain Expenses of Elementary and Secondary School Teachers  .......... 62(a)(2)(D) 
.14 Transportation Mainline Pipeline Construction Industry Optional  
Expense Substantiation Rules for Payments to Employees  
Under Accountable Plans ...................................................................................... 62(c) 
.15 Standard Deduction .................................................................................................... 63 
.16 Cafeteria Plans  ........................................................................................................125 
.17 Qualified Transportation Fringe Benefit ............................................................... 132(f) 
.18 Income from United States Savings Bonds for Taxpayers Who  
Pay Qualified Higher Education Expenses  ..............................................................135 
.19 Adoption Assistance Programs ................................................................................137 
.20 Private Activity Bonds Volume Cap ..................................................................... 146(d) 
.21 Loan Limits on Agricultural Bonds ................................................................... 147(c)(2) 
.22 General Arbitrage Rebate Rules .......................................................................... 148(f) 
.23 Safe Harbor Rules for Broker Commissions on Guaranteed  
Investment Contracts or Investments Purchased for  
a Yield Restricted Defeasance Escrow ....................................................................148 
.24 Gross Income Limitation for a Qualifying Relative..................................... 152(d)(1)(B) 
.25 Election to Expense Certain Depreciable Assets  ....................................................179 
.26 Energy Efficient Commercial Buildings Deduction  ............................................... 179D 
.27 Qualified Business Income .................................................................................... 199A 
.28 Eligible Long-Term Care Premiums ............................................................. 213(d)(10) 
.29 Medical Savings Accounts ........................................................................................220 
.30 Interest on Education Loans .....................................................................................221 
.31 Limitation on Use of Cash Method of Accounting  ....................................................448 
.32 Threshold for Excess Business Loss      .............................................................. 461(l) 
.33 Treatment of Dues Paid to Agricultural or Horticultural Organizations  .............. 512(d) 
.34 Insubstantial Benefit Limitations for Contributions Associated With  
Charitable Fund-Raising Campaigns  .................................................................. 513(h) 
.35 Special Rules for Credits and Deductions  ...............................................................642 
.36 Tax on Insurance Companies Other than Life Insurance Companies  ....................831 
3 
.37 Expatriation to Avoid Tax ..........................................................................................877 
.38 Tax Responsibilities of Expatriation....................................................................... 877A  
.39 Foreign Earned Income Exclusion  ........................................................................... 911 
.40 Debt Instruments Arising Out of Sales or Exchanges  ........................................ 1274A 
.41 Unified Credit Against Estate Tax ...........................................................................2010 
.42 Valuation of Qualified Real Property in Decedent’s Gross Estate  ..................... 2032A 
.43 Annual Exclusion for Gifts ........................................................................... 2503; 2523 
.44 Tax on Arrow Shafts ................................................................................................ 4161  
.45 Passenger Air Transportation Excise Tax ..............................................................4261 
.46 Tax on Certain Uses of Crude Oil and Petroleum Products  .................................. 4611 
.47 Reporting Exception for Certain Exempt Organizations with  
Nondeductible Lobbying Expenditures  ........................................................ 6033(e)(3) 
.48 Notice of Large Gifts Received from Foreign Persons  ....................................... 6039F 
.49 Persons Against Whom a Federal Tax Lien Is Not Valid .......................................6323 
.50 Property Exempt from Levy ............................................................................... 6334(a) 
.51 Exempt Amount of Wages, Salary, or Other Income ........................................ 6334(d) 
.52 Interest on a Certain Portion of the Estate Tax Payable in Installments  ........... 6601(j) 
.53 Failure to File Tax Return .......................................................................................6651 
.54 Failure to File Certain Information Returns, Registration Statements, etc.  ..........6652 
.55 Other Assessable Penalties With Respect to the Preparation of  
Tax Returns for Other Persons ...............................................................................6695 
.56 Failure to File Partnership Return  ..........................................................................6698 
.57 Failure to File S Corporation Return  ......................................................................6699 
.58 Failure to File Correct Information Returns  ............................................................6721 
.59 Failure to Furnish Correct Payee Statements ........................................................6722 
.60 Revocation or Denial of Passport in Case of Certain Tax Delinquencies  .............7345 
.61 Attorney Fee Awards ..............................................................................................7430 
.62 Periodic Payments Received Under Qualified Long-Term Care  
Insurance Contracts or Under Certain Life Insurance Contracts  ...................7702B(d) 
.63 Qualified Small Employer Health Reimbursement Arrangement  ..........................9831 
SECTION 3. EFFECTIVE DATE  
SECTION 4. DRAFTING INFORMATION  
 
4 
SECTION 1. PURPOSE 
     This revenue procedure sets forth inflation-adjusted items for 2025 for various Code 
provisions as in effect on October 22, 2024.  The inflation adjusted items for the Code 
sections set forth in section 2 of this revenue procedure are generally determ ined by 
reference to § 1(f).  If amendments to the Code are enacted for 2025 after October 22, 
2024, taxpayers should consult additional guidance to determine whether these adjustments 
remain applicable for 2025. 
 
  
5 
SECTION 2. 2025 ADJUSTED ITEMS  
     .01 Tax Rate Tables.  For taxable years beginning in 2025, the tax rate tables under § 1 
are as follows: 
TABLE 1 -  Section 1(j)(2)(A) –Married Individuals Filing Joint Returns and Surviving 
Spouses 
 
TABLE 2 - Section 1(j)(2)(B) – Heads of Households 
 
 
 If Taxable Income Is:  The Tax Is: 
 Not over $23,850       10% of the taxable income 
 Over $23,850 but  
not over $96,950 
 $2,385 plus 12% of  
the excess over $23,850      
 Over $96,950 but  
not over $206,700  
 $11,157 plus 22% of  
the excess over $96,950   
 Over $206,700 but  
not over $394,600 
 $35,302 plus 24% of  
the excess over $206,700   
 Over $394,600 but  
not over $501,050  
 $80,398 plus 32% of  
the excess over $394,600 
 Over $501,050 but  
not over $751,600      
 $114,462 plus 35% of  
the excess over $501,050 
 Over $751,600     $202,154.50 plus 37% of  
the excess over $751,600 
 If Taxable Income Is:  The Tax Is: 
 Not over $17,000   10% of the taxable income 
 Over $17,000 but  
not over $64,850 
 $1,700 plus 12% of  
the excess over $17,000     
 Over $64,850 but  
not over $103,350 
 $7,442 plus 22% of  
the excess over $64,850     
 Over $103,350 but  
not over $197,300   
 $15,912 plus 24% of  
the excess over $103,350 
 Over $197,300 but  
not over $250,500      
 $38,460 plus 32% of  
the excess over $197,300 
 Over $250,500 but  
not over $626,350 
 $55,484 plus 35% of  
the excess over $250,500 
 Over $626,350       $187,031.50 plus 37% of  
the excess over $626,350 
6 
TABLE 3 - Section 1(j)(2)(C) – Unmarried Individuals (other than Surviving Spouses and 
Heads of Households) 
 
 
TABLE 4 - Section 1(j)(2)(D) – Married Individuals Filing Separate Returns  
 
 
  
 If Taxable Income Is:  The Tax Is: 
 Not over $11,925  10% of the taxable income 
 Over $11,925 but  
not over $48,475 
 $1,192.50 plus 12% of  
the excess over $11,925 
 Over $48,475 but  
not over $103,350 
 $5,578.50 plus 22% of  
the excess over $48,475 
 Over $103,350 but  
not over $197,300  
 $17,651 plus 24% of  
the excess over $103,350 
 Over $197,300 but  
not over $250,525  
 $40,199 plus 32% of  
the excess over $197,300  
 Over $250,525 but  
not over $626,350 
 $57,231 plus 35% of  
the excess over $250,525 
 Over $626,350  $188,769.75 plus 37% of  
the excess over $626,350 
 If Taxable Income Is:  The Tax Is: 
 Not over $11,925  10% of the taxable income 
 Over $11,925 but  
not over $48,475 
 $1,192.50 plus 12% of  
the excess over $11,925 
 Over $48,475 but  
not over $103,350  
 $ 5,578.50 plus 22% of  
the excess over $48,475  
 Over $103,350 but  
not over $197,300      
 $17,651 plus 24% of  
the excess over $103,350 
 Over $197,300 but  
not over $250,525  
 $40,199 plus 32% of  
the excess over $197,300 
 Over $250,525 but  
not over $375,800 
 $57,231 plus 35% of  
the excess over $250,525 
 Over $375,800  $101,077.25 plus 37% of  
the excess over $375,800 
7 
TABLE 5 - Section 1(j)(2)(E) – Estates and Trusts 
 
 
     .02 Unearned Income of Minor Children Subject to the “Kiddie Tax” .  For taxable years 
beginning in 2025, the amount in §  1(g)(4)(A)(ii)(I), which is used to reduce the net 
unearned income reported on the child’s return that is subject to the “kiddie tax,” is $1,350.  
This $1,350 amount is the same as the amount provided in § 63(c)(5)(A), as adjusted for 
inflation.  The same $1,350 amount is used for purposes of § 1(g)(7) to determine whether a 
parent may elect to include a child’s gross income in the parent’s gross income and to 
calculate the “kiddie tax.”  For example, one of the requirements for the parental election is 
that a child’s gross income is more than the amount referenced in § 1(g)(4)(A)(ii)(I) but less 
than 10 times that amount; thus, a child’s gross income for 2025 must be more than $1,350 
but less than $13,500. 
     .03 Maximum Capital Gains Rate (§ 1(h), § 1(j)(5)) .  For taxable years beginning in 2025, 
the maximum zero rate amounts and maximum 15 percent rate amounts under § 1(j)(5)(B), 
as adjusted for inflation, are as follows:  
Filing Status Maximum Zero 
Rate Amount 
Maximum15% 
Rate Amount 
Married Individuals Filing Joint Returns and Surviving Spouse $96,700  $600,050 
Married Individuals Filing Separate Returns $48,350 $300,000 
Heads of Household $64,750 $566,700 
All Other Individuals $48,350 $533,400 
 If Taxable Income Is:  The Tax Is: 
 Not over $3,150  10% of the taxable income 
 Over $3,150 but  
not over $11,450 
 $315 plus 24% of  
the excess over $3,150 
 Over $11,450 but  
not over $15,650 
 $2,307 plus 35% of  
the excess over $11,450 
 Over $15,650  $3,777 plus 37% of  
the excess over $15,650 
8 
Estates and Trusts $3,250 $15,900 
 
     .04 Adoption Credit.  For taxable years beginning in 2025, under §  23(a)(3) the credit 
allowed for an adoption of a child with special needs is $17,280.  For taxable years 
beginning in 2025, under § 23(b)(1) the maximum credit allowed for other adoptions is the 
amount of qualified adoption expenses up to $17,280.  The available adoption credit begins 
to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in 
excess of $259,190 and is completely phased out for taxpayers with modified adjusted 
gross income of $299,190 or more.  See section 2.19 of this revenue procedure for the 
adjusted items relating to adoption assistance programs.  
     .05 Child Tax Credit.  For taxable years beginning in 2025, the amount used in 
§ 24(d)(1)(A) to determine the amount of credit under §  24 that may be refundable is 
$1,700. 
     .06 Earned Income Credit. 
        (1) In general.  For taxable years beginning in 2025, the following amounts are used to 
determine the earned income credit under § 32(b).  The “earned income amount” is the 
amount of earned income at or above which the maximum amount of the earned income 
credit is allowed.  The “threshold phaseout amount” is the amount of adjusted gross income 
(or, if greater, earned income) above which the maximum amount of the credit begins to 
phase out.  The “completed phaseout amount” is the amount of adjusted gross income (or, if 
greater, earned income) at or above which no credit is allowed.  The threshold phaseout 
amounts and the completed phaseout amounts shown in the table below for married 
taxpayers filing a joint return include the increase provided in § 32(b)(2)(B), as adjusted for 
inflation for taxable years beginning in 2025.  The threshold phaseout amounts and the 
9 
completed phaseout amounts shown in the table below for taxpayers with all other filing 
statuses also apply to married taxpayers who are not filing a joint return and satisfy the 
special rules for separated spouses in §  32(d). 
                                                  Number of Qualifying Children  
Item 
 
One Two Three or More None 
Earned Income Amount $12,730   $17,880  $17,880 $8,490  
Maximum Amount of Credit $4,328 $7,152 $8,046 $649 
Threshold Phaseout Amount 
(Married Filing Jointly) 
$30,470 $30,470 $30,470 $17,730 
Completed Phaseout Amount 
(Married Filing Jointly) 
$57,554 $64,430 $68,675 $26,214 
Threshold Phaseout Amount (All 
other filing statuses) 
$23,350  $23,350 $23,350 $10,620  
Completed Phaseout Amount (All 
other filing statuses) 
$50,434 $57,310  $61,555 $19,104 
 
The instructions for the Form 1040 series provide tables showing the amount of the earned 
income credit for each type of taxpayer.  
        (2) Excessive Investment Income.  For taxable years beginning in 2025, the earned 
income tax credit is not allowed under §  32(i) if the aggregate amount of certain investment 
income exceeds $11,950. 
     .07 Refundable Credit for Coverage Under a Qualified Health Plan.  For taxable years 
beginning in 2025, the limitation on tax imposed under §  36B(f)(2)(B) for excess advance 
credit payments is determined using the following table:  
If the household income 
(expressed as a percent of 
poverty line) is: 
The limitation amount for 
unmarried individuals 
(other than surviving 
spouses and heads of 
household) 
The limitation amount for 
all other taxpayers is: 
Less than 200% 
 
$375 $750 
10 
At least 200% but less 
than 300% 
 
$975 $1,950 
At least 300% but less 
than 400% 
$1,625 $3,250 
 
     .08 Rehabilitation Expenditures Treated as Separate New Building.  For calendar year 
2025, the per low-income unit qualified basis amount under §  42(e)(3)(A)(ii)(II) is $8,500.  
     .09 Low-Income Housing Credit.  For calendar year 2025, the amount used under 
§ 42(h)(3)(C)(ii) to calculate the State housing credit ceiling for the low -income housing 
credit is the greater of (1) $3.00 multiplied by the State population, or (2)  $3,455,000. 
     .10 Employee Health Insurance Expense of Small Employers .  For taxable years 
beginning in 2025, the dollar amount in effect under § 45R(d)(3)(B) is $33,300.  This amount 
is used under § 45R(c) for limiting the small employer health insurance credit and under 
§ 45R(d)(1)(B) for determining who is an eligible small employer for purposes of the credit.  
     .11 Exemption Amounts for Alternative Minimum Tax .  For taxable years beginning in 
2025, the exemption amounts under §  55(d)(1) are: 
Joint Returns or Surviving Spouses  $137,000 
Unmarried Individuals (other than Surviving Spouses)  $88,100  
Married Individuals Filing Separate Returns  $68,500 
Estates and Trusts $30,700 
 
For taxable years beginning in 2025, under § 55(b)(1), the excess taxable income above 
which the 28 percent tax rate applies is:  
Married Individuals Filing Separate Returns  $119,550 
All Other Taxpayers $239,100 
  
11 
For taxable years beginning in 2025, the amounts used under § 55(d)(2) to determine the 
phaseout of the exemption amounts are:   
 Threshold Phaseout 
Amount 
Complete Phaseout 
Amount 
Joint Returns or Surviving Spouses  $1,252,700   $1,800,700      
Unmarried Individuals (other than 
Surviving Spouses) 
$626,350      $978,750      
Married Individuals Filing Separate  
Returns 
$626,350 $900,350     
Estates and Trusts $102,500     $225,300      
 
     .12 Alternative Minimum Tax Exemption for a Child Subject to the “Kiddie Tax .”  For 
taxable years beginning in 2025, for a child to whom the §  1(g) “kiddie tax” applies, the 
exemption amount under §§ 55(d) and 59(j) for purposes of the alternative minimum tax 
under § 55 may not exceed the sum of (1) the child’s earned income for t he taxable year, 
plus (2) $9,550. 
     .13 Certain Expenses of Elementary and Secondary School Teachers .  For taxable years 
beginning in 2025, under § 62(a)(2)(D) the amount of the deduction allowed under § 162 
that consists of expenses paid or incurred by an eligible educator in connection with books, 
supplies (other than nonathletic supplies for courses of instruction in health or physical 
education), computer equipment (including related software a nd services) and other 
equipment, and supplementary materials used by the eligible educator in the classroom is 
$300. 
     .14 Transportation Mainline Pipeline Construction Industry Optional Expense 
Substantiation Rules for Payments to Employees Under Accountable Plans .  For calendar 
year 2025, an eligible employer may pay certain welders and heavy equipment mechanics 
an amount up to $22 per hour for rig-related expenses that are deemed substantiated under 
an accountable plan if paid in accordance with Rev. Proc. 2002- 41, 2002-1 C.B. 1098.  If 
12 
the employer provides fuel or otherwise reimburses fuel expenses, an amount up to $14   
per hour is deemed substantiated if paid under Rev. Proc. 2002-41.  
     .15 Standard Deduction. 
        (1) In general.  For taxable years beginning in 2025, the standard deduction amounts 
under § 63(c)(2) are as follows: 
Filing Status Standard 
Deduction 
Married Individuals Filing Joint Returns and Surviving Spouses (§ 1(j)(2)(A)) $30,000 
Heads of Households (§ 1(j)(2)(B)) $22,500 
Unmarried Individuals (other than Surviving Spouses and Heads of 
Households) (§ 1(j)(2)(C)) 
$15,000 
Married Individuals Filing Separate Returns (§ 1(j)(2)(D)) $15,000 
 
        (2) Dependent.  For taxable years beginning in 2025, the standard deduction amount 
under § 63(c)(5) for an individual who may be claimed as a dependent by another taxpayer 
cannot exceed the greater of (1) $1,350, or (2) the sum of $450 and the individual’s earned 
income. 
        (3) Aged or blind.  For taxable years beginning in 2025, the additional standard 
deduction amount under § 63(f) for the aged or the blind is $1,600.  The additional standard 
deduction amount is increased to $2,000 if the individual is also unmarried and not a 
surviving spouse. 
     .16 Cafeteria Plans.  For taxable years beginning in 2025, the dollar limitation under 
§ 125(i) on voluntary employee salary reductions for contributions to health flexible 
spending arrangements is $3,300.  If the cafeteria plan permits the carryover of unused 
amounts, the maximum carryover amount is $660.  
     .17 Qualified Transportation Fringe Benefit .  For taxable years beginning in 2025, the 
monthly limitation under § 132(f)(2)(A) regarding the aggregate fringe benefit exclusion 
13 
amount for transportation in a commuter highway vehicle and any transit pass is $325.  The 
monthly limitation under § 132(f)(2)(B) regarding the fringe benefit exclusion amount for 
qualified parking is $325. 
     .18 Income from United States Savings Bonds for Taxpayers Who Pay Qualified Higher 
Education Expenses.  For taxable years beginning in 2025, the exclusion under §  135, 
regarding income from United States savings bonds for taxpayers who pay qualified higher 
education expenses, begins to phase out for modified adjusted gross income above 
$149,250 for joint returns and $99,500 for all other returns.  The exclusion is completely 
phased out for modified adjusted gross income of $179,250 or more for joint returns and 
$114,500 or more for all other returns.  
     .19 Adoption Assistance Programs .  For taxable years beginning in 2025, under 
§ 137(a)(2), the amount that can be excluded from an employee’s gross income for the 
adoption of a child with special needs is $17,280.  For taxable years beginning in 2025, 
under § 137(b)(1) the maximum amount that can be excluded from an employee’s gross 
income for the amounts paid or expenses incurred by an employer for qualified adoption 
expenses furnished pursuant to an adoption assistance program for adoptions by the 
employee is $17,280.  The amount excludable from an employee’s gross income begins to 
phase out under § 137(b)(2)(A) for taxpayers with modified adjusted gross income in excess 
of $259,190 and is completely phased out for taxpayers with modified adjusted gross 
income of $299,190 or more.  (See section 2.04 of this revenue procedure for the adjusted 
items relating to the adoption credit.)  
     .20 Private Activity Bonds Volume Cap .  For calendar year 2025, the amounts used 
under § 146(d) to calculate the State ceiling for the volume cap for private activity bonds is 
14 
the greater of (1) $130 multiplied by the State population, or (2) $388,780,000.  
     .21 Loan Limits on Agricultural Bonds .  For calendar year 2025, the loan limit amount on 
agricultural bonds under § 147(c)(2)(A) for first-time farmers is $667,500.  
     .22 General Arbitrage Rebate Rules.  For bond years ending in 2025, the amount of the 
computation credit determined under §  1.148-3(d)(4) of the Income Tax Regulations is 
$2,120. 
     .23 Safe Harbor Rules for Broker Commissions on Guaranteed Investment Contracts or 
Investments Purchased for a Yield Restricted Defeasance Escrow .  For calendar year 2025, 
under § 1.148-5(e)(2)(iii)(B)(1) of the Income Tax Regulations, a broker’s commission or 
similar fee for the acquisition of a guaranteed investment contract or investments purchased 
for a yield restricted defeasance escrow is reasonable if (1)  the amount of the fee that the 
issuer treats as a qualified administrative cost does not ex ceed the lesser of (A) $50,000, 
and (B) 0.2 percent of the computational base (as defined in §  1.148-5(e)(2)(iii)(B)(2)) or, if 
more, $5,000; and (2) for any issue, the issuer does not treat more than $141,000 in 
brokers’ commissions or similar fees as qualified administrative costs for all guaranteed 
investment contracts and investments for yield restricted defeasance es crows purchased 
with gross proceeds of the issue. 
     .24 Gross Income Limitation for a Qualifying Relative.  For taxable years beginning in 
2025, the exemption amount referenced in § 152(d)(1)(B) is $5,200.  
     .25 Election to Expense Certain Depreciable Assets .  For taxable years beginning in 
2025, under § 179(b)(1), the aggregate cost of any §  179 property that a taxpayer elects to 
treat as an expense cannot exceed $1,250,000 and under § 179(b)(5)(A), the cost of any 
sport utility vehicle that may be taken int o account under § 179 cannot exceed $31,300.  
15 
Under § 179(b)(2), the $1,250,000 limitation under § 179(b)(1) is reduced (but not below 
zero) by the amount by which the cost of § 179 property placed in service during the 2025 
taxable year exceeds $3,130,000.  
     .26 Energy Efficient Commercial Buildings Deduction.  For taxable years beginning in 
2025, the applicable dollar value used to determine the maximum allowance of the 
deduction under § 179D(b)(2) is $0.58 increased (but not above $1.16) by $0.02 for each 
percentage point by which the total annual energy and  power costs for the buildings are 
certified to be reduced by a percentage greater than 25 percent.  For taxable years 
beginning in 2025, the applicable dollar value used to determine the increased de duction 
amount for certain property under §  179D(b)(3) is $2.90 increased (but not above $5.81) by 
$0.12 for each percentage point by which the total annual energy and power costs for the 
building are certified to be reduced by a percentage greater than 25 percent. 
     .27 Qualified Business Income.  For taxable years beginning in 2025, the threshold 
amounts under § 199A(e)(2) and phase-in range amounts under § 199A(b)(3)(B) and 
§ 199A(d)(3)(A) are: 
Filing Status Threshold amount Phase-in range amount 
Married Individuals Filing Joint Returns  $394,600   $494,600      
Married Individuals Filing Separate Returns  $197,300      $247,300      
All Other Returns $197,300      $247,300      
 
     .28 Eligible Long-Term Care Premiums.  For taxable years beginning in 2025, the 
limitations under § 213(d)(10), regarding eligible long-term care premiums includible in the 
term “medical care”, as adjusted for inflation, are as follows: 
Attained Age Before the Close of the Taxable Year  Limitation on Premiums 
40 or less $480      
More than 40 but not more than 50  $900      
More than 50 but not more than 60  $1,800      
16 
More than 60 but not more than 70  $4,810      
More than 70 $6,020      
 
     .29 Medical Savings Accounts. 
        (1) Self-only coverage.  For taxable years beginning in 2025, the term “high deductible 
health plan” as defined in § 220(c)(2)(A) means, for self-only coverage, a health plan that 
has an annual deductible that is not less than $2,850 and not more than $4,300, and under 
which the annual out-of-pocket expenses required to be paid (other than for premiums) for 
covered benefits do not exceed $5,700.  
        (2) Family coverage.  For taxable years beginning in 2025, the term “high deductible 
health plan” means, for family coverage, a health plan that has an annual deductible that is 
not less than $5,700 and not more than $8,550, and under which the annual out -of-pocket 
expenses required to be paid (other than for premiums) for covered benefits do not exceed 
$10,500. 
     .30 Interest on Education Loans.  For taxable years beginning in 2025, the $2,500 
maximum deduction for interest paid on qualified education loans under § 221 begins to 
phase out under § 221(b)(2)(B), as adjusted for inflation, for taxpayers with modified 
adjusted gross income in excess of $85,000 ($170,000 for joint returns), and is completely 
phased out for taxpayers with modified adjusted gross income of $100,000 or more 
($200,000 or more for joint returns).  
     .31 Limitation on Use of Cash Method of Accounting.  For taxable years beginning in 
2025, a corporation or partnership meets the gross receipts test of § 448(c) for any taxable 
year if the average annual gross receipts of such entity for the 3- taxable-year period ending 
with the taxable year which precedes such taxable year does not exceed $31,000,000.  
  
17 
     .32 Threshold for Excess Business Loss .  For taxable years beginning in 2025, in 
determining a taxpayer’s excess business loss, the amount under § 461(l)(3)(A)(ii)(II) is 
$313,000 ($626,000 for joint returns).  
     .33 Treatment of Dues Paid to Agricultural or Horticultural Organizations .  For taxable 
years beginning in 2025, the limitation under §  512(d)(1), regarding the exemption of annual 
dues required to be paid by a member to an agricultural or horticultural organization, is 
$207. 
     .34 Insubstantial Benefit Limitations for Contributions Associated with Charitable Fund-
Raising Campaigns. 
        (1) Low cost article.  For taxable years beginning in 2025, for purposes of defining the 
term “unrelated trade or business” for certain exempt organizations under § 513(h)(2), “low 
cost articles” are articles costing $13.60 or less.  
        (2) Other insubstantial benefits.  For taxable years beginning in 2025, under § 170, the 
$5, $25, and $50 guidelines in section 3 of Rev. Proc. 90-12, 1990 -1 C.B. 471 (as amplified 
by Rev. Proc. 92-49, 1992-1 C.B. 987, and modified by Rev. Proc. 92 -102, 1992-2 C.B. 
579), for the value of insubstantial benefits that may be received by a donor in return for a 
contribution, without causing the contribution to fail to be fully deductible, are $13.60, $68.00 
and $136.00, respectively. 
     .35 Special Rules for Credits and Deductions .  For taxable years beginning in 2025, the 
amount of the deduction under § 642(b)(2)(C)(i) is $5,100.  
     .36 Tax on Insurance Companies Other than Life Insurance Companies.   For taxable 
years beginning in 2025, under § 831(b)(2)(A)(i) the amount of the limit on net written 
premiums or direct written premiums (whichever is greater) is $2,850,000 to elect the 
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alternative tax for certain small companies under § 831(b)(1) to be taxed only on taxable 
investment income. 
     .37 Expatriation to Avoid Tax.  For calendar year 2025, under §  877A(g)(1)(A), unless an 
exception under § 877A(g)(1)(B) applies, an individual is a covered expatriate if the 
individual’s “average annual net income tax” under § 877(a)(2)(A) for the five taxable years 
ending before the expatriation date is more than $206,000.  
     .38 Tax Responsibilities of Expatriation.  For taxable years beginning in 2025, the 
amount that would be includible in the gross income of a covered expatriate by reason of 
§ 877A(a)(1) is reduced (but not below zero) by $890,000 pursuant to § 877A(a)(3) . 
     .39 Foreign Earned Income Exclusion.  For taxable years beginning in 2025, the foreign 
earned income exclusion amount under §  911(b)(2)(D)(i) is $130,000. 
     .40 Debt Instruments Arising Out of Sales or Exchanges .  For calendar year 2025, a 
qualified debt instrument under § 1274A(b) has stated principal that does not exceed 
$7,296,700, and a cash method debt instrument under § 1274A(c)(2) has stated principal 
that does not exceed $5,211,900.  
     .41 Unified Credit Against Estate Tax .  For an estate of any decedent dying in calendar 
year 2025, the basic exclusion amount is $13,990,000 for determining the amount of the 
unified credit against estate tax under § 2010. 
     .42 Valuation of Qualified Real Property in Decedent’s Gross Estate.  For an estate of a 
decedent dying in calendar year 2025, if the executor elects to use the special use valuation 
method under § 2032A for qualified real property, the aggregate decrease in the value of 
qualified real property resulting from electing to use § 2032A for purposes of the estate tax 
cannot exceed $1,420,000. 
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     .43 Annual Exclusion for Gifts. 
        (1) For calendar year 2025, the first $19,000 of gifts to any person (other than gifts of 
future interests in property) are not included in the total amount of taxable gifts under § 2503 
made during that year. 
        (2) For calendar year 2025, the first $190,000 of gifts to a spouse who is not a citizen 
of the United States (other than gifts of future interests in property) are not included in the 
total amount of taxable gifts under §§  2503 and 2523(i)(2) made during that year. 
     .44 Tax on Arrow Shafts.  For calendar year 2025, the tax imposed under 
§ 4161(b)(2)(A) on the first sale by the manufacturer, producer, or importer of any shaft of a 
type used in the manufacture of certain arrows is $0.63 per shaft.  
     .45 Passenger Air Transportation Excise Tax .  For calendar year 2025, the tax under 
§ 4261(b)(1) on the amount paid for each domestic segment of taxable air transportation is 
$5.20.  For calendar year 2025, the tax under § 4261(c)(1) on any amount paid (whether 
within or without the United States) for any international air transportation, if the 
transportation begins or ends in the United States, generally is $22.90.  Under § 4261(c)(3), 
however, a lower rate of tax applies under § 4261(c)(1) to a domestic segment beginning or 
ending in Alaska or Hawaii, and the tax applies only to departures.  For calendar year 2025, 
the rate of tax is $11.40. 
     .46 Tax on Certain Uses of Crude Oil and Petroleum Products.   For calendar year 2025, 
the tax imposed under § 4611(a) on crude oil received at a United States refinery and 
petroleum products entered into the United States for consumption, use, or warehousing is 
$0.26 cents per barrel. 
  
20 
     .47 Reporting Exception for Certain Exempt Organizations with Nondeductible Lobbying 
Expenditures.  For taxable years beginning in 2025, the annual per person, family, or entity 
dues limitation to qualify for the reporting exception under §  6033(e)(3) (and section 5.05 of 
Rev. Proc. 98-19, 1998-1 C.B. 547), regarding certain exempt organizations with 
nondeductible lobbying expenditures, is $143.00 or less.  
     .48 Notice of Large Gifts Received from Foreign Persons .  For taxable years beginning in 
2025, § 6039F authorizes the Secretary of the Treasury or her delegate to require recipients 
of gifts from certain foreign persons to report these gifts if the aggregate value of gifts 
received in the taxable year exceeds $20,116. 
     .49 Persons Against Whom a Federal Tax Lien Is Not Valid.  For calendar year 2025, a 
federal tax lien is not valid against (1) certain purchasers under § 6323(b)(4) who purchased 
personal property in a casual sale for less than $1,960, or (2) a mechanic’s lienor under 
§ 6323(b)(7) who repaired or improved certain residential property if the contract price with 
the owner is not more than $9,790.  
     .50 Property Exempt from Levy.  For calendar year 2025, the value of property exempt 
from levy under § 6334(a)(2) (fuel, provisions, furniture, and other household personal 
effects, as well as arms for personal use, livestock, and poultry) cannot exceed $11,710.  
The value of property exempt from levy under § 6334(a)(3) (books and tools necessary for 
the trade, business, or profession of the taxpayer) cannot exceed $5,860.  
     .51 Exempt Amount of Wages, Salary, or Other Income .  For taxable years beginning in 
2025, the dollar amount used to calculate the amount determined under § 6334(d)(4)(B) is 
$5,100.  
  
21 
     .52 Interest on a Certain Portion of the Estate Tax Payable in Installments .  For an estate 
of a decedent dying in calendar year 2025, the dollar amount used to determine the “2-
percent portion” (for purposes of calculating interest under § 6601(j)) of the estate tax 
extended as provided in § 6166 is $1,900,000. 
     .53 Failure to File Tax Return.  In the case of any return required to be filed in 2026, the 
amount of the addition to tax under § 6651(a) for failure to file an income tax return within 60 
days of the due date of such return (determined with regard to any extensions of time for 
filing) will not be less than the lesser of $525 or 100 percent of the amount required to be 
shown as tax on such return. 
     .54 Failure to File Certain Information Returns, Registration Statements, etc .   For returns 
required to be filed in 2026, the penalty amounts under §  6652(c) are: 
        (1) for failure to file a return required under § 6033(a)(1) (relating to returns by exempt 
organization) or § 6012(a)(6) (relating to returns by political organizations):  
Scenario Daily 
Penalty  
 Maximum Penalty 
Organization (§ 6652(c)(1)(A)) $25      Lesser of $13,000 or 5% 
of gross receipts of the 
organization for the year. 
Organization with gross receipts exceeding 
$1,309,500 (§ 6652(c)(1)(A)) 
$130      $65,000      
Managers (§ 6652(c)(1)(B)) $10      $6,500      
Public inspection of annual returns and reports 
(§ 6652(c)(1)(C)) 
$25      $13,000      
Public inspection of applications for exemption 
and notice of status (§ 6652(c)(1)(D)) 
$25      No Limit 
 
 
  
22 
       (2) for failure to file a return required under § 6034 (relating to returns by certain trust) 
or § 6043(b) (relating to terminations, etc., of exempt organizations):  
Scenario Daily Penalty  Maximum 
Penalty 
Organization or trust (§ 6652(c)(2)(A)) $10      $6,500      
Managers (§ 6652(c)(2)(B)) $10      $6,500      
Split-Interest Trust (§ 6652(c)(2)(C)(ii)) $25    $13,000      
Any trust with gross income exceeding $327,000 
(§ 6652(c)(2)(C)(ii)) 
$130      $65,000      
 
        (3) for failure to file a disclosure required under § 6033(a)(2): 
Scenario Daily Penalty  Maximum 
Penalty 
Tax–exempt entity (§ 6652(c)(3)(A)) $130      $65,000    
Failure to comply with written demand 
(§ 6652(c)(3)(B)(ii)) 
$130      $13,000      
 
     .55 Other Assessable Penalties With Respect to the Preparation of Tax Returns for 
Other Persons.  In the case of any failure relating to a return or claim for refund filed in 
2026, the penalty amounts under § 6695 are: 
Scenario Per Return or 
Claim for Refund 
Maximum 
Penalty 
Failure to furnish copy to taxpayer (§ 6695(a)) $65  $32,500      
Failure to sign return (§ 6695(b)) $65      $32,500      
Failure to furnish identifying number (§  6695(c)) $65      $32,500      
Failure to retain copy or list (§ 6695(d)) $65      $32,500      
Failure to file correct information returns (§  6695(e)) $65 per return and 
item in return 
$32,500      
Negotiation of check (§ 6695(f)) $650 per check No limit 
Failure to be diligent in determining eligibility for 
head of household filing status, child tax credit, 
American Opportunity tax credit, and earned income 
credit (§ 6695(g)) 
$650 per failure No limit 
 
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     .56 Failure to File Partnership Return.  In the case of any return required to be filed in 
2026, the dollar amount used to determine the amount of the penalty under § 6698(b)(1) is 
$255. 
     .57 Failure to File S Corporation Return.  In the case of any return required to be filed in 
2026, the dollar amount used to determine the amount of the penalty under § 6699(b)(1) is 
$255. 
     .58 Failure to File Correct Information Returns .  In the case of any failure relating to a 
return required to be filed in 2026, the penalty amounts under § 6721 are: 
        (1) for persons with average annual gross receipts for the most recent three taxable 
years of more than $5,000,000, for failure to file correct information returns:  
Scenario Penalty Per Return  Calendar Year 
Maximum 
General Rule (§ 6721(a)(1)) $340 $4,098,500 
Corrected on or before 30 days after 
required filing date (§ 6721(b)(1)) 
$60 $683,000 
Corrected after 30th day but on or before 
August 1, 2026 (§ 6721(b)(2)) 
$130 $2,049,000 
 
        (2) for persons with average annual gross receipts for the most recent three taxable 
years of $5,000,000 or less, for failure to file correct information returns:  
Scenario Penalty Per Return  Calendar Year 
Maximum 
General Rule (§ 6721(d)(1)(A)) $340 $1,366,000 
Corrected on or before 30 days after required 
filing date (§ 6721(d)(1)(B)) 
$60 $239,000 
Corrected after 30th day but on or before 
August 1, 2026 (§ 6721(d)(1)(C)) 
$130 $683,000 
 
  
  
24 
       (3) for failure to file correct information returns due to intentional disregard of the filing 
requirement (or the correct information reporting requirement):  
Scenario Penalty Per Return  Calendar Year 
Maximum 
Return other than a return required to be 
filed under § 6045(a), 6041A(b), 6050H, 
6050I, 6050J, 6050K, or 6050L 
(§ 6721(e)(2)(A)) 
Greater of (i) $680, or (ii) 
10% of aggregate 
amount of items required 
to be reported correctly 
No limit 
Return required to be filed under 
§ 6045(a), 6050K, or 6050L 
(§ 6721(e)(2)(B)) 
Greater of (i) $680, or (ii) 
5% of aggregate amount 
of items required to be 
reported correctly 
No limit 
 
Return required to be filed under 
§ 6050I(a) (§ 6721(e)(2)(C)) 
Greater of (i) $34,150, or 
(ii) amount of cash 
received up to $136,500 
No limit 
 
Return required to be filed under § 6050V 
(§ 6721(e)(2)(D)) 
Greater of (i) $680, or (ii) 
10% of the value of the 
benefit of any contract 
with respect to which 
information is required to 
be included on the return 
 
No limit 
 
     .59 Failure to Furnish Correct Payee Statements .  In the case of any failure relating to a 
statement required to be furnished in 2026, the penalty amounts under §  6722 are: 
        (1) for persons with average annual gross receipts for the most recent three taxable 
years of more than $5,000,000, for failure to furnish correct payee statements:  
Scenario Penalty Per 
Statement 
Calendar Year 
Maximum 
General Rule (§ 6722(a)(1)) $340 $4,098,500 
Corrected on or before 30 days after 
required furnishing date (§ 6722(b)(1)) 
$60 $683,000 
Corrected after 30th day but on or before 
August 1, 2026 (§ 6722(b)(2)) 
$130 $2,049,000 
 
  
25 
 
        (2) for persons with average annual gross receipts for the most recent 3 taxable years 
of $5,000,000 or less, for failure to furnish correct payee statements:  
Scenario Penalty Per 
Statement 
Calendar Year 
Maximum 
General Rule (§ 6722(d)(1)(A)) $340      $1,366,000      
Corrected on or before 30 days after required 
furnishing date (§ 6722(d)(1)(B)) 
$60      $239,000      
Corrected after 30th day but on or before 
August 1, 2026 (§ 6722(d)(1)(C)) 
$130     $683,000      
 
        (3) for failure to furnish correct payee statements due to intentional disregard of the 
requirement to furnish a payee statement (or the correct information reporting requirement):  
Scenario Penalty Per 
Statement 
Calendar Year 
Maximum 
Payee statement other than a statement 
required under § 6045(b), 6041A(e) (in 
respect of a return required under 
§ 6041A(b)), 6050H(d), 6050J(e), 6050K(b), 
or 6050L(c) (§ 6722(e)(2)(A)) 
Greater of (i) $680, 
or (ii) 10% of 
aggregate amount of 
items required to be 
reported correctly 
No limit 
Payee statement required under § 6045(b), 
6050K(b), or 6050L(c) (§ 6722(e)(2)(B)) 
Greater of (i) $680, 
or (ii) 5% of 
aggregate amount of 
items required to be 
reported correctly 
 
No limit 
 
 
     .60 Revocation or Denial of Passport in Case of Certain Tax Delinquencies .  For 
calendar year 2025, the amount of a serious delinquent tax debt under §  7345 is $64,000. 
     .61 Attorney Fee Awards.  For fees incurred in calendar year 2025, the attorney fee 
award limitation under § 7430(c)(1)(B)(iii) is $250 per hour.  
     .62 Periodic Payments Received Under Qualified Long- Term Care Insurance Contracts 
or Under Certain Life Insurance Contracts .  For calendar year 2025, the stated dollar 
amount of the per diem limitation under § 7702B(d)(4), regarding periodic payments 
26 
received under a qualified long-term care insurance contract or periodic payments received 
under a life insurance contract that are treated as paid by reason of the death of a 
chronically ill individual, is $420. 
     .63 Qualified Small Employer Health Reimbursement Arrangement .  For taxable years 
beginning in 2025, to qualify as a qualified small employer health reimbursement 
arrangement under § 9831(d), the arrangement must provide that the total amount of 
payments and reimbursements for any year cannot exceed $6,350 ($12,800 for family 
coverage). 
SECTION 3. EFFECTIVE DATE  
     .01 General Rule.  Except as provided in section 3.02 of this revenue procedure, this 
revenue procedure applies to taxable years beginning in 2025.  
     .02 Calendar Year Rule.  This revenue procedure applies to transactions or events 
occurring in calendar year 2025 for purposes of sections 2.08 (rehabilitation expenditures 
treated as separate new building), 2.09 (low -income housing credit), 2.14 (transportation 
mainline pipeline construction industry optional expense substantiation rules for payments 
to employees under accountable plans), 2.20 (private activity bonds volume cap), 2.21 (loan 
limits on agricultural bonds), 2.22 (general arbitrage rebate  rules), 2.23 (safe harbor rules for 
broker commissions on guaranteed investment contracts or investments purchased for a 
yield restricted defeasance escrow), 2.37 (expatriation to avoid taxes), 2.40 (debt 
instruments arising out of sales or exchanges), 2. 41 (unified credit against estate tax), 2.42 
(valuation of qualified real property in decedent’s gross estate), 2.43 (annual exclusion for 
gifts), 2.44 (tax on arrow shafts), 2.45 (passenger air transportation excise tax), 2.46 (tax on 
certain uses of crude oil and petroleum products), 2.49 (persons against whom a federal tax 
27 
lien is not valid), 2.50 (property exempt from levy), 2.52 (interest on a certain portion of the 
estate tax payable in installments), 2.60 (revocation or denial of passport in case of certain 
tax delinquencies), 2.61 (attorney fee awards), and 2.62 (period ic payments received under 
qualified long-term care insurance contracts or under certain life insurance contracts) of this 
revenue procedure. 
SECTION 4. DRAFTING INFORMATION  
     The principal author of this revenue procedure is Kyle Walker of the Office of Associate 
Chief Counsel (Income Tax & Accounting).  For further information regarding this revenue 
procedure, contact Mr. Walker at (202)  317-4718 (not a toll-free call).  