Most forms of income have specific lines dedicated to them on the Form 1040 tax return. "Other income" refers to sources of income that aren't assigned a specific line on the return or its accompanying Schedule 1 form.
Other income is added together and entered on line 9 (or line 10 for 2021) of the IRS form Schedule 1 (Additional Income and Adjustments to Income) instead. Then the total additional incomes from Schedule 1 are transferred to line 8 on Form 1040.
What Is Other Income on Form 1040?
Other income includes earnings other than wages or income from self-employment, retirement income, or investments, foreign income, and canceled debts. Other income must be reported on Schedule 1 and Form 1040, and it's taxable. Here is a Form 1040 example below.
Who Uses Other Income on Form 1040?
You typically have to report other income if you receive money or goods that aren't included on a W-2 or on most 1099s. Think prizes, awards, jury duty pay, and lottery winnings.
Additional sources of income that you might report as other income include:
- Gambling winnings
- Dividends on insurance policies if they exceed the premiums you paid
- Cash for keys
- Recaptures of deductions you erroneously claimed on past tax returns
- Reimbursements for previously deducted expenses
- The taxable portions of disaster relief payments
- Inmate income accounts for worked performed while incarcerated, such as work-release programs
You might receive a 1099 for some of these sources of income, but they're still reported as other income regardless.
Cancellation of Debts
A debt is cancelled when you owe a lender money, and you default on repayment, so the lender eventually writes off the balance as uncollectible. You no longer owe it, but the IRS says it's income to you, since you don't have to repay it.
The lender typically reports canceled debt on Form 1099-C, then submits the form to the IRS and sends a copy to you. It's reportable as other income if you were solvent at the time the debt was forgiven—that is, if the value of your assets was more than the total of your liabilities.
The IRS provides an insolvency determination worksheet to help you determine whether you were solvent.
The IRS says you must include foreign income as other income even if you paid taxes on it to another country. Convert the total to U.S. dollars, then enter the U.S. figure on your tax return as other income.
You might be eligible to exclude some or all of this income from your taxable income, however. Complete Form 2555 or Form 2555-EZ with your tax return to exclude your foreign income. The IRS provides instructions along with the qualifying criteria for claiming an exclusion.
What Isn't Other Income on Form 1040?
Child support, Roth IRA distributions, gifts, and inheritances are exceptions to the other income rule.
- Child support is tax-neutral. It’s neither deductible to the parent paying it nor reportable by the parent receiving it.
- Thanks to the Tax Cuts and Jobs Act (TCJA), alimony received no longer has to be claimed as income, It has its own line on Schedule 1 (line 2a) when it's payable from a qualifying divorce that occurred prior to 2019.
- Roth retirement plan distributions aren't taxed, because contributions are made with after-tax dollars.
- Gifts might be taxable, but the donor is responsible for paying this tax, not the recipient.
You wouldn't report self-employment income as other income, either, even if you don’t receive a 1099-MISC for payments and compensation you received. This income is reported on Schedule C, Profit or Loss From Business, if you're an independent contractor or sole proprietor. Businesses are required to issue 1099-NEC forms to non-employees who earned $600 or more during the tax year.
Self-employment income was previously reported on Form 1099-MISC, but is now reported on Form 1099-NEC, which stands for "non-employee compensation."
Earnings for which you don't receive a Form 1099-NEC are considered income for tax purposes and must be reported on Schedule C, although not as other income. Not receiving a 1099-MISC is either an oversight on the part of the payer, or it could simply mean that a 1099-MISC wasn't required, because you earned less than the $600 threshold. The income is still taxable.
How To Report Other Income on Form 1040
Other income is reported on line 8 of Schedule 1 of Form 1040, then the total from line 10 of Schedule 1 is transferred to line 8 of the 1040 itself. These lines pertain to forms for the 2021 tax year, the return you'd file in 2022.
The IRS requires that you detail the “type and amount” of your other income on line 8 of Schedule 1 and enter the total. For example, you'd enter $40 and “jury duty" if you were paid $40 for performing that service.
Enter the total, and attach a statement to your tax return that itemizes where the income came from if you had many sources of other income during the course of the year, too many to detail in the allotted space.
- Other income on Form 1040 refers to income that isn't assigned a specific line on a 1040 tax return or Schedule 1 form.
- You typically have to report other income if you receive money or goods that aren't included on a W-2 or most 1099s.
- Canceled debts and foreign income are typically reported as other income.
- Child support, alimony, Roth IRA distributions, gifts, and self-employment income aren't reported as other income.
- You report other income by filling in line 9 on Schedule 1 and transferring the total to line 8 on Form 1040.