What Was Form 1040-EZ? A Definition of the Simple Tax Form
Explore the history of the simple 1040-EZ tax form, its past filing rules, and how its function was absorbed into the current, streamlined Form 1040.
Form 1040-EZ was a simplified version of the standard Form 1040 for filing federal income taxes. It was designed for individuals with uncomplicated financial lives who did not have dependents. The form offered a straightforward method for eligible taxpayers to meet their filing obligations by focusing only on basic income and tax questions.
Historical Eligibility for Form 1040-EZ
To use Form 1040-EZ, a taxpayer had to meet a strict set of criteria. The filing status was limited to Single or Married Filing Jointly, and both the taxpayer and their spouse had to be under age 65 and not considered blind. A taxpayer’s taxable income had to be less than $100,000, with sources limited to wages, salaries, tips, unemployment compensation, and taxable scholarship or fellowship grants. Taxable interest income was permissible, but it could not exceed $1,500 for the year.
Those using Form 1040-EZ could not claim any dependents and were required to take the standard deduction. The form did not allow for claiming adjustments to income, such as for student loan interest or contributions to an individual retirement account (IRA). While most tax credits were disallowed, an exception was made for the Earned Income Tax Credit (EITC), which could be claimed under specific circumstances.
The Discontinuation of Form 1040-EZ
The use of Form 1040-EZ was discontinued following the 2017 tax year as a result of the Tax Cuts and Jobs Act of 2017 (TCJA). A goal of the TCJA was to simplify tax filing, which led the Internal Revenue Service (IRS) to consolidate Form 1040, Form 1040A, and Form 1040-EZ into a single, redesigned Form 1040.
The elimination of the 1040-EZ and 1040A was part of an effort to streamline the system. Instead of choosing between three forms, the new approach required everyone to use the same base form starting with the 2018 tax year. This redesign aimed to create a more uniform filing experience through a modular, “building-block” design.
Filing a Simple Return Today
Taxpayers who would have previously qualified for Form 1040-EZ now use the redesigned Form 1040. The process remains straightforward for those with simple tax situations because the modern Form 1040 is modular. This “building-block” approach means taxpayers only complete the sections and schedules relevant to them.
For an individual with a simple financial picture, this involves filling out the main two-page Form 1040 and bypassing additional schedules. These schedules are for reporting items not allowed on the old 1040-EZ, like certain adjustments to income.