Important Announcements -->
Policy and Procedures - Changes
Para 4.6.3: Taxpayer should initial bank account information found on Form 1040 (refund only) or Client Form Listing Summary page in Taxpayer Copy print set
For all Direct Deposit and/or Direct Debit Information.
Para 6.25 Preparing Friends and Family Returns - If the Counselor chooses to use the IRS provided tax preparation software to prepare an out-of-scope return and/or is preparing the return outside of AARP Foundation Tax-Aide Policies and Procedures, they are no longer protected by the Volunteer Protection Act of 1997 for that return.
Tax-Aide Publications
NTTC 4491 TY25 - Includes OBBB Act updates. Incorporates tax law papers covering Schedule C guidelines; election workers; and gambling income, losses, and expenses. [Papers still available for prior years.] Expanded tax law discussion in various sections.
NTTC 4012 TY25 - Built off of TY24 (not IRS TY25 version). NTTC 4012 pages no longer map to IRS 4012 pages. Includes OBBB Act updates and amended returns update. Will include updated screen shots once TaxSlayer Online (TSO) is updated. Online version is most up-to-date.
NTTC 4012 TY24 - Updated to reflect TSO updates made in May 2025 including updated screen shots. Re-writes include Medicaid waiver payment, sale of main home, and SSA-1099 lump sum payments. Release notes.
IRS 4012 TY25 - Created before OBBB Act; contains old, incorrect information such as standard deduction amounts and who should file thresholds. Written to VITA scope. Delivery expected late December if ordering system opens soon.
Refunds - Paper Checks
The Treasury Department announced an intent to not issue paper checks after September 30, 2025. Taxpayers who file returns with valid bank account information will continue to receive direct deposits as the fastest and most secure refund method. Electronic refunds give taxpayers faster access to refunds, with payments issued in less than 21 days in most cases. Payments may take 6 weeks or longer for refunds sent by mail.
Ref: Executive Order 14247 - Mar 25, 2025 and Modernizing payments to and from America’s bank account
Taxpayers who do not provide bank account details or request an exception for 2025 returns will face refund delays
The IRS will send a letter
Requesting direct deposit information
Providing information on how to request an exception
If the taxpayer does not provide direct deposit information or obtain an approved exception, the IRS will hold off on issuing a paper check refund for up to six weeks after a 2025 return is filed
References
Tax Brackets
10%, 12%, 22%, 24%, 32%, 35%, and 37% now permanent (no expiration date)
Federal Standard Deduction
S or MFS: $15,750
MFJ or QSS: $31,500
HoH: $23,625
Additional for Age (65+) or Blindness
Married or QSS: $1,600
S or HOH: $2,000
Gross income limit for qualifying relative: $5,200
Additional Tax Deductions Below the AGI line
No Tax on Tips (as shown on Form W-2, Form 1099, or other specified statement furnished to the taxpayer or reported directly by the taxpayer on Form 4137) deduction up to $25,000 per return for listed qualifying occupations for itemizers and non-itemizers subject to $100 per $1,000 phaseout starting at AGI $150,000 ($300,000) with valid SSN; must file MFJ if married; MFS not eligible
No Tax on Overtime (Premium Portion, or the "half" portion of "time and a half") as reported on Form W-2, Form 1099, or other statement furnished to the taxpayer); max deduction up to $12,500 ($25,000 for joint filers); subject to $100 per $1,000 phaseout starting at MAGI of $150,000 ($300,000 MFJ) with valid SSN; must file MFJ if married; MFS not eligible
No Tax on Vehicle Loan interest deduction for itemizers and non-itemizers up to $10,000 for a qualified vehicle (new car, minivan, van, SUV, pick-up truck, or motorcycle with gross vehicle weight less than 14,000 pounds) purchased for personal use with final assembly in the U.S. with phaseout of $200 per $1000 over range of AGI $100,000-$150,000 ($200,000-$250,000); VIN required (can be used to determine plant of manufacturer)
Deduction for Seniors (65+) additional deduction of $6,000 per individual subject to $60 per $1,000 phaseout range of AGI $75,000 ($150,000 for joint filers) with valid SSN; must file MFJ if married; MFS not eligible
Forms
Form 1040SR - draft 9/5/2025
Form 1040 Schedule A, Itemized Deductions - 11/20/25
Form 1040 Schedule 1-A, Additional Deductions - draft 11/4/25
Form 1099-K reporting requirements reinstated to previous threshold of $20,000 and 200 transactions.
Form 1099-R, box 7, Distribution Code Y for qualified charitable distribution - box 2a will not show a reduction for the QCD
Form 1099-DA, Digital Asset Proceeds from Broker Transactions (OOS)
Expenses
Standard mileage rates: $0.70 business; $0.21 medical; $0.14 charitable
HSA contribution: $4,300 (self) and $8,550 (family) plus $1,000 for 55+
State and local taxes (SALT) deduction maximum $40,000 (MFS $20,000) with AGI up to $500,000 ($250,000 MFS)
Charitable contributions to Veterans Services Organizations now deductible
Tax Credits
Home energy tax credit requires Qualified Manufacturer Identification Number on Form 5695 - credit repealed after December 31, 2025
Earned Income Tax Credit: Maximum investment income $11,950
Child tax credit: $2,200 per child under 17; $1,700 refundable per child; a parent and the child must have valid SSN; no credit for MFS; phaseout AGI $200,000 ($400,000) at $50 per $1,000 AGI above the limits
Adoption credit up to $5,000 now refundable (OOS)
Other Items
IRA deduction amount $7,000 ($8,000 for 50+)
Kidde Tax - unearned income $2,700
NATP reports (as of 9/5/25) IRS will apply real time validation of SSN for e-filing. Will reject e-filed return with restricted SSN "valid for work only with DHS authorization" if work authorization is expired and claiming certain credits
Social Security Fairness Act: Effective January 1, 2024 - will result in lump sum payments for 2024 on 2025 SSA-1099s.
As of January 24, 2025 per a recent change in policy, approved security plans will no longer be forwarded to site locations. The IRS SPEC territory manager will maintain an electronic copy of the SPEC-approved security plan for each site. The NLDC will be updating the LC Guide to reflect this change soon.
