Form 1040-SS 2024 - 2025

This article will cover the IRS Form 1040-SS, exploring its purpose as a U.S. Self-Employment Tax Return for residents of certain U.S. territories, and explaining the step-by-step process for completing the form.

IRS Form 1040-SS, officially titled “U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico),” is a crucial document used by self-employed individuals residing in U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), or Puerto Rico to report their self-employment income and pay self-employment tax. This form serves as an alternative to the standard Form 1040 for eligible residents of these territories, allowing them to fulfill their U.S. tax obligations related to self-employment income. Form 1040-SS is particularly important as it not only facilitates the reporting and payment of self-employment tax but also provides an opportunity for bona fide residents of Puerto Rico to claim the Additional Child Tax Credit, a benefit that can significantly impact their overall tax situation. By providing a structured means of reporting self-employment income and calculating the associated tax liability, Form 1040-SS plays a vital role in ensuring compliance with U.S. tax laws for individuals in these specific territories while accommodating their unique tax circumstances.

What is IRS Form 1040-SS?

IRS Form 1040-SS is a specialized tax return used by self-employed individuals who are residents of U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), or Puerto Rico. It serves several key purposes:

  1. Reporting self-employment income
  2. Calculating and paying self-employment tax
  3. Claiming the Additional Child Tax Credit (for bona fide residents of Puerto Rico)

Key features of Form 1040-SS:

  • Designed specifically for residents of certain U.S. territories
  • Focuses on self-employment tax and related credits
  • Includes provisions for the Additional Child Tax Credit for Puerto Rico residents

Who Must File Form 1040-SS?

Form 1040-SS must be filed by self-employed individuals who meet the following criteria:

  1. Are residents of U.S. Virgin Islands, Guam, American Samoa, CNMI, or Puerto Rico
  2. Have net earnings from self-employment of $400 or more
  3. Do not have to file Form 1040 or Form 1040-SR with the United States

Additionally, even if net earnings are less than $400, individuals may need to file Form 1040-SS if:

  • They are eligible for the Additional Child Tax Credit (Puerto Rico residents only)
  • They owe Household Employment Taxes
How to Complete Form 1040-SS

1040-SS Instructions

Step 1: Gather Necessary Information

Before filling out the form, collect all relevant information, including:

  • Social Security number(s)
  • Self-employment income records
  • Estimated tax payment records
  • Information about qualifying children (for Puerto Rico residents claiming Additional Child Tax Credit)

Step 2: Complete the Header

Fill in personal information at the top of the form, including:

Step 3: Answer the Digital Asset Question

Indicate whether you received, sold, exchanged, or disposed of any digital assets during the tax year

Step 4: Complete Part I – Total Tax and Credits

  1. Check the appropriate filing status box
  2. List qualifying children (if claiming Additional Child Tax Credit)
  3. Calculate and enter self-employment tax from Schedule SE
  4. Enter any household employment taxes (if applicable)
  5. Add Additional Medicare Tax (if applicable)
  6. Calculate total tax
  7. Enter any tax payments or credits
  8. Calculate the amount owed or refund due

Step 5: Complete Part II (if applicable)

If you’re a bona fide resident of Puerto Rico claiming the Additional Child Tax Credit:

  1. Determine eligibility based on qualifying children
  2. Calculate the credit amount based on income and number of children
  3. Enter the final credit amount on Part I, line 91

Step 6: Sign and Date the Form

Sign and date the form. If filing jointly, both spouses must sign

Step 7: Attach Required Schedules and Forms

Include any necessary schedules, such as Schedule SE for self-employment tax calculations.

Step 8: Submit the Form

File Form 1040-SS according to the instructions:

  • Electronically (if eligible)
  • By mail to the appropriate IRS address based on your location