26 CFR 601.602: Tax forms and instructions.
(Also Part I, §§ 1, 23, 24, 25A, 32, 36B, 42, 45R, 55, 59, 62, 63, 125, 132(f),135, 137,
146, 147, 148, 152, 179, 199A, 213, 220, 221, 448, 461, 512, 513, 642, 831, 877, 877A,
911, 1274A, 2010, 2032A, 2503, 2523, 4161, 4261, 6033, 6039F, 6323, 6334, 6601,
6651, 6652, 6695, 6698, 6699, 6721, 6722, 7345, 7430, 7702B, 9831; 1.148-5.)

Rev. Proc. 2018-57

Table of Contents
SECTION 1. PURPOSE
SECTION 2. CHANGES
SECTION 3. 2019 ADJUSTED ITEMS
Code Section
.01 Tax Rate Tables
.02 Unearned Income of Minor Children Taxed as if Parent’s
Income ("Kiddie Tax")

1(j)(2) (A)-(D)
1(g)

.03 Maximum Capital Gains Rate

1(h)

.04 Adoption Credit

23

.05 Child Tax Credit

24

.06 Lifetime Learning Credit

25A

.07 Earned Income Credit

32

.08 Refundable Credit for Coverage Under a Qualified Health Plan

36B(f)(2)(B)

.09 Rehabilitation Expenditures Treated as Separate New Building

42(e)

 -2.10 Low-Income Housing Credit

42(h)

.11 Employee Health Insurance Expense of Small Employers

45R

.12 Exemption Amounts for Alternative Minimum Tax

55

.13 Alternative Minimum Tax Exemption for a Child Subject to the
“Kiddie Tax”

59(j)

.14 Certain Expenses of Elementary and Secondary
School Teachers

62(a)(2)(D)

.15 Transportation Mainline Pipeline Construction Industry Optional
Expense Substantiation Rules for Payments to Employees Under
Accountable Plans

62(c)

.16 Standard Deduction

63

.17 Cafeteria Plans

125

.18 Qualified Transportation Fringe Benefit

132(f)

.19 Income from United States Savings Bonds for Taxpayers Who
Pay Qualified Higher Education Expenses

135

.20 Adoption Assistance Programs

137

.21 Private Activity Bonds Volume Cap

146(d)

.22 Loan Limits on Agricultural Bonds

147(c)(2)

.23 General Arbitrage Rebate Rules

148(f)

.24 Safe Harbor Rules for Broker Commissions on Guaranteed
Investment Contracts or Investments Purchased for a Yield
Restricted Defeasance Escrow

148

.25 Gross Income Limitation for a Qualifying Relative

152(d)(1)(B)

.26 Election to Expense Certain Depreciable Assets

179

.27 Qualified Business Income

199A

.28 Eligible Long-Term Care Premiums

213(d)(10)

.29 Medical Savings Accounts

220

 -3.30 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
.36 Tax on Insurance Companies Other than Life
Insurance Companies

642
831

.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 Reporting Exception for Certain Exempt Organizations with
Nondeductible Lobbying Expenditures

6033(e)(3)

.47 Notice of Large Gifts Received from Foreign Persons

6039F

.48 Persons Against Whom a Federal Tax Lien Is Not Valid

6323

.49 Property Exempt from Levy

6334(a)

.50 Exempt Amount of Wages, Salary, or Other Income

6334(d)

 -4.51 Interest on a Certain Portion of the Estate Tax Payable in
Installments
.52 Failure to File Tax Return

6601(j)

6651

.53 Failure to File Certain Information Returns, Registration
Statements, etc.

6652

.54 Other Assessable Penalties With Respect to the
Preparation of Tax Returns for Other Persons

6695

.55 Failure to File Partnership Return

6698

.56 Failure to File S Corporation Return

6699

.57 Failure to File Correct Information Returns

6721

.58 Failure to Furnish Correct Payee Statements

6722

.59 Revocation or Denial of Passport in Case of Certain
Tax Delinquencies
.60 Attorney Fee Awards

7345

7430

.61 Periodic Payments Received Under Qualified Long-Term Care
Insurance Contracts or Under Certain Life Insurance Contracts

7702B(d)

.62 Qualified Small Employer Health Reimbursement
Arrangement

9831

SECTION 4. EFFECTIVE DATE
SECTION 5. DRAFTING INFORMATION
SECTION 1. PURPOSE
This revenue procedure sets forth inflation-adjusted items for 2019 for various
provisions of the Internal Revenue Code of 1986 (Code) as amended as of November
15, 2018. To the extent amendments to the Code are enacted for 2019 after November
15, 2018, taxpayers should consult additional guidance to determine whether these
adjustments remain applicable for 2019.

 -5SECTION 2. CHANGES
.01 Section 11001(a)(5) of An Act to Provide for Reconciliation Pursuant to Titles II
and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, Pub. L. 115-97,
131 Stat. 2504 (the Act), adds § 1(j)(5), which provides a temporary modification to the
dollar amounts in § 1(h)(1)(B) and (C) for taxable years beginning after December 31,
2017, and before January 1, 2026. Section 1(j)(5)(B)(i) provides that under
§ 1(h)(1)(B)(i) the maximum zero rate amount is $77,200 for a joint return or surviving
spouse, $51,700 for a head of household, half of the amount for a joint return for an
individual, and $2,600 for an estate or trust. Section 1(j)(5)(B)(ii) provides that under
§ 1(h)(1)(C)(ii)(I) the maximum 15% rate amount is $479,000 for a joint return or
surviving spouse (half of this amount for a married individual filing a separate return),
$452,400 for a head of household, $425,800 in the case of any other individual (other
than an estate or trust), and $12,700 for an estate or trust. These amounts are adjusted
for inflation for taxable years beginning after December 31, 2018.
.02 Section 11022(a) of the Act adds § 24(h), which provides special rules for taxable
years beginning after December 31, 2017, and before January 1, 2026. Section 24(h)
provides that the value used in § 24(d)(1)(A) to determine the amount of child tax credit
under § 24 that may be refundable is $1,400. The $1,400 amount is adjusted for
inflation for taxable years beginning after December 31, 2018.
.03 Section 11041 of the Act amends § 151(d)(5) to provide a temporary set dollar
amount of zero for the personal exemption deduction for taxable years beginning after
December 31, 2017, and before January 1, 2026. However, Notice 2018-70, 2018-38
I.R.B. 441, notifies taxpayers that the Department of the Treasury and the Internal

 -6Revenue Service intend to issue proposed regulations to clarify that the reduction of the
exemption amount to zero in § 151(d)(5)(A) for taxable years 2018 through 2025 does
not apply to the gross income limitation in the definition of a qualifying relative in
§ 152(d)(1)(B). Thus, the § 151(d) exemption amount referenced in § 152(d)(1)(B) will
be treated as $4,150, as adjusted for inflation, for taxable years in which the
§ 151(d)(5)(A) exemption amount is zero.
.04 Section 13101 of the Act amends § 179(b)(6) to provide that the $25,000 limitation
of the cost of any sport utility vehicle under § 179(b)(5)(A) is adjusted for inflation for
taxable years beginning after December 31, 2018.
.05 Section 11011 of the Act adds § 199A, which provides in part that if for a taxable
year a taxpayer has income less than the sum of the threshold amount plus $50,000
($100,000 for joint returns), then any specified service trade or business of the taxpayer
shall not fail to be treated as a qualified trade or business due to § 199A(d)(1)(A).
Section 199A(e)(2)(A) defines the threshold amount as $157,500. This $157,500
amount is adjusted for inflation for taxable years beginning after December 31, 2018.
.06 Section 13102 of the Act amends § 448(c) to provide that a corporation or
partnership meets the gross receipts tests 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 $25,000,000. The $25,000,000
amount is adjusted for inflation for taxable years beginning after December 31, 2018.
.07 Section 11012 of the Act adds § 461(l) to provide that a taxpayer’s excess
business loss for the taxable year is the excess, if any, of the taxpayer’s aggregate
deductions attributable to trades or businesses of the taxpayer (determined without

 -7regard to the limitation of the provision) over the sum of the taxpayer’s aggregate gross
income or gain attributable to such trades or businesses, plus $250,000 (twice this
amount for joint returns). The $250,000 amount under § 461(l)(3)(A)(ii)(II) is adjusted
for inflation for taxable years beginning after December 31, 2018.
.08 Section 11041(b) of the Act adds § 642(b)(2)(C)(iii), which provides that in years
when the personal exemption amount under § 151(d) is zero, § 642(b)(2)(C)(i) shall be
applied by substituting $4,150 for the exemption amount under § 151(d). The $4,150
amount is adjusted for inflation for taxable years beginning after December 31, 2018.
.09 Section 11002(d)(10) of the Act amended § 1274A(d)(2) to change the calculation
of the inflation-adjusted amounts for qualified debt instruments and cash method debt
instruments for taxable years beginning after December 31, 2017. In prior years, the
inflation-adjusted amounts under § 1274A have been published in a separate revenue
ruling. Because of the change to the calculation of the inflation-adjusted amounts under
§ 1274A, these amounts will be included in this revenue procedure and will no longer be
published in a separate revenue ruling. For inflation-adjusted amounts prior to January
1, 2019, see Rev. Rul. 2018-11, 2018-18 I.R.B. 518.
.10 Section 11081 of the Act amends § 5000A to provide that the applicable dollar
amount used to determine the penalty under § 5000A(c) for failure to maintain minimum
essential coverage is $0 for taxable years beginning after December 31, 2018.
Accordingly, this amount is not included in this revenue procedure.
.11 Section 11041(d) of the Act adds § 6334(d)(4), which provides that in taxable
years in which the personal exemption amount under § 151(d) is zero, the term “exempt
amount” means an amount equal to (i) the sum of the amount determined under

 -8§ 6334(d)(4)(B) and the standard deduction, divided by (ii) 52. The amount determined
under § 6334(d)(4)(B) is $4,150 multiplied by the number of the taxpayer’s dependents
for the taxable year in which the levy occurs. The $4,150 amount is adjusted for
inflation for taxable years beginning after December 31, 2018.
SECTION 3. 2019 ADJUSTED ITEMS
.01 Tax Rate Tables. For taxable years beginning in 2019, the tax rate tables under
§ 1 are as follows:
TABLE 1 - Section 1(j)(2)(A) - Married Individuals Filing Joint Returns and Surviving
Spouses
If Taxable Income Is:

The Tax Is:

Not over $19,400

10% of the taxable income

Over $19,400 but
not over $78,950

$1,940 plus 12% of
the excess over $19,400

Over $78,950 but
not over $168,400

$9,086 plus 22% of
the excess over $78,950

Over $168,400 but
not over $321,450

$28,765 plus 24% of
the excess over $168,400

Over $321,450 but
not over $408,200

$65,497 plus 32% of
the excess over $321,450

Over $408,200 but
not over $612,350

$93,257 plus 35% of
the excess over $408,200

Over $612,350

$164,709.50 plus 37% of
the excess over $612,350

TABLE 2 - Section 1(j)(2)(B) – Heads of Households
If Taxable Income Is:

The Tax Is:

Not over $13,850

10% of the taxable income

Over $13,850 but

$1,385 plus 12% of

 -9not over $52,850

the excess over $13,850

Over $52,850 but
not over $84,200

$6,065 plus 22% of
the excess over $52,850

Over $84,200 but
not over $160,700

$12,962 plus 24% of
the excess over $84,200

Over $160,700 but
not over $204,100

$31,322 plus 32% of
the excess over $160,700

Over $204,100 but
not over $510,300

$45,210 plus 35% of
the excess over $204,100

Over $510,300

$152,380 plus 37% of
the excess over $510,300

TABLE 3 - Section 1(j)(2)(C) – Unmarried Individuals (other than Surviving Spouses and
Heads of Households)
If Taxable Income Is:

The Tax Is:

Not over $9,700

10% of the taxable income

Over $9,700 but
not over $39,475

$970 plus 12% of
the excess over $9,700

Over $39,475 but
not over $84,200

$4,543 plus 22% of
the excess over $39,475

Over $84,200 but
not over $160,725

$14,382.50 plus 24% of
the excess over $84,200

Over $160,725 but
not over $204,100

$32,748.50 plus 32% of
the excess over $160,725

Over $204,100 but
not over $510,300

$46,628.50 plus 35% of
the excess over $204,100

Over $510,300

$153,798.50 plus 37% of
the excess over $510,300

TABLE 4 - Section 1(j)(2)(D) – Married Individuals Filing Separate Returns
If Taxable Income Is:

The Tax Is:

 - 10 Not over $9,700

10% of the taxable income

Over $9,700 but
not over $39,475

$970 plus 12% of
the excess over $9,700

Over $39,475 but
not over $84,200

$4,543 plus 22% of
the excess over $39,475

Over $84,200 but
not over $160,725

$14,382.50 plus 24% of
the excess over $84,200

Over $160,725 but
not over $204,100

$32,748.50 plus 32% of
the excess over $160,725

Over $204,100 but
not over $306,175

$46,628.50 plus 35% of
the excess over $204,100

Over $306,175

$82,354.75 plus 37% of
the excess over $306,175

TABLE 5 - Section 1(j)(2)(E) – Estates and Trusts
If Taxable Income Is:

The Tax Is:

Not over $2,600

10% of the taxable income

Over $2,600 but
not over $9,300

$260 plus 24% of
the excess over $2,600

Over $9,300 but
not over $12,750

$1,868 plus 35% of
the excess over $9,300

Over $12,750

$3,075.50 plus 37% of
the excess over $12,750

.02 Unearned Income of Minor Children Taxed as if Parent's Income (the "Kiddie
Tax"). For taxable years beginning in 2019, 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 $1,100. This $1,100 amount is the same as the amount provided in
§ 63(c)(5)(A), as adjusted for inflation. The same $1,100 amount is used for purposes
of § 1(g)(7) (that is, to determine whether a parent may elect to include a child's gross

 - 11 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 2019 must be more than $1,100 but less than $11,000.
.03 Maximum Capital Gains Rate. For taxable years beginning in 2019, the Maximum
Zero Rate Amount under § 1(h)(1)(B)(i) is $78,750 in the case of a joint return or
surviving spouse, $52,750 in the case of an individual who is a head of household
(§ 2(b)), $39,375 in the case of any other individual (other than an estate or trust), and
$2,650 in the case of an estate or trust. The Maximum 15-percent Rate Amount under
§ 1(h)(C)(ii)(l) is $488,850 in the case of a joint return or surviving spouse (1⁄2 such
amount in the case of a married individual filing a separate return), $461,700 in the case
of an individual who is the head of a household (§ 2(b)), $434,550 in the case of any
other individual (other than an estate or trust), and $12,950 in the case of an estate or
trust.
.04 Adoption Credit. For taxable years beginning in 2019, under § 23(a)(3) the credit
allowed for an adoption of a child with special needs is $14,080. For taxable years
beginning in 2019, under § 23(b)(1) the maximum credit allowed for other adoptions is
the amount of qualified adoption expenses up to $14,080. The available adoption credit
begins to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross
income in excess of $211,160 and is completely phased out for taxpayers with modified
adjusted gross income of $251,160 or more. (See section 3.20 for the adjusted items
relating to adoption assistance programs.)

 - 12 .05 Child Tax Credit. For taxable years beginning in 2019, the value used in
§ 24(d)(1)(A) to determine the amount of credit under § 24 that may be refundable is
$1,400.
.06 Lifetime Learning Credit. For taxable years beginning in 2019, a taxpayer's
modified adjusted gross income in excess of $58,000 ($116,000 for a joint return) is
used to determine the reduction under § 25A(d)(2) in the amount of the Lifetime
Learning Credit otherwise allowable under § 25A(a)(2).
.07 Earned Income Credit.
(1) In general. For taxable years beginning in 2019, 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)(3)(B)(i), as adjusted for inflation for taxable years beginning in 2019.
Number of Qualifying Children
Item

One

Two

Three or More

None

Earned Income
Amount

$10,370

$14,570

$14,570

$6,920

Maximum Amount
of Credit

$3,526

$5,828

$6,557

$529

 - 13 Threshold Phaseout
Amount (Single,
Surviving Spouse, or
Head of Household)

$19,030

$19,030

$19,030

$8,650

Completed Phaseout
Amount (Single,
Surviving Spouse, or
Head of Household)

$41,094

$46,703

$50,162

$15,570

Threshold Phaseout
Amount (Married Filing
Jointly)

$24,820

$24,820

$24,820

$14,450

Completed Phaseout
Amount (Married Filing
Jointly)

$46,884

$52,493

$55,952

$21,370

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 2019, the earned
income tax credit is not allowed under § 32(i)(1) if the aggregate amount of certain
investment income exceeds $3,600.
.08 Refundable Credit for Coverage Under a Qualified Health Plan. For taxable years
beginning in 2019, 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:

Less than 200%
At least 200% but less
than 300%
At least 300% but less
than 400%

The limitation amount for
unmarried individuals
(other than surviving
spouses and heads of
household) is:
$300

The limitation amount for
all other taxpayers is:

$600

$800

$1,600

$1,325

$2,650

 - 14 -

.09 Rehabilitation Expenditures Treated as Separate New Building. For calendar year
2019, the per low-income unit qualified basis amount under § 42(e)(3)(A)(ii)(II) is
$7,000.
.10 Low-Income Housing Credit. For calendar year 2019, 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) $2.75625 multiplied by the State population, or (2)
$3,166,875.
.11 Employee Health Insurance Expense of Small Employers. For taxable years
beginning in 2019, the dollar amount in effect under § 45R(d)(3)(B) is $27,100. 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.
.12 Exemption Amounts for Alternative Minimum Tax. For taxable years beginning in
2019, the exemption amounts under § 55(d)(1) are:
Joint Returns or
Surviving Spouses

$111,700

Unmarried Individuals (other than
Surviving Spouses)

$71,700

Married Individuals Filing Separate
Returns

$55,850

Estates and Trusts

$25,000

For taxable years beginning in 2019, under § 55(b)(1), the excess taxable income
above which the 28 percent tax rate applies is:
Married Individuals Filing Separate Returns

$97,400

 - 15 -

Joint Returns, Unmarried Individuals (other
than surviving spouses), and Estates and Trusts

$194,800

For taxable years beginning in 2019, the amounts used under § 55(d)(3) to determine
the phaseout of the exemption amounts are:
Joint Returns or
Surviving Spouses

$1,020,600

Unmarried Individuals (other than
Surviving Spouses)

$510,300

Married Individuals Filing Separate
Returns

$510,300

Estates and Trusts

$83,500

.13 Alternative Minimum Tax Exemption for a Child Subject to the "Kiddie Tax." For
taxable years beginning in 2019, for a child to whom the § 1(g) "kiddie tax" applies, the
exemption amount under §§ 55 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 the taxable
year, plus (2) $7,750.
.14 Certain Expenses of Elementary and Secondary School Teachers. For taxable
years beginning in 2019, 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 and services)
and other equipment, and supplementary materials used by the eligible educator in the
classroom is $250.

 - 16 .15 Transportation Mainline Pipeline Construction Industry Optional Expense
Substantiation Rules for Payments to Employees Under Accountable Plans. For
calendar year 2019, an eligible employer may pay certain welders and heavy equipment
mechanics an amount of up to $18 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 the employer provides fuel or otherwise reimburses fuel expenses,
up to $11 per hour is deemed substantiated if paid under Rev. Proc. 2002-41.
.16 Standard Deduction.
(1) In general. For taxable years beginning in 2019, 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))

$24,400

Heads of Households (§ 1(j)(2)(B))

$18,350

Unmarried Individuals (other than Surviving Spouses
and Heads of Households) (§ 1(j)(2)(C))

$12,200

Married Individuals Filing Separate
Returns (§ 1(j)(2)(D))

$12,200

(2) Dependent. For taxable years beginning in 2019, 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) $1,100, or (2) the sum of $350 and
the individual's earned income.
(3) Aged or blind. For taxable years beginning in 2019, the additional standard
deduction amount under § 63(f) for the aged or the blind is $1,300. The additional

 - 17 standard deduction amount is increased to $1,650 if the individual is also unmarried and
not a surviving spouse.
.17 Cafeteria Plans. For taxable years beginning in 2019, the dollar limitation under
§ 125(i) on voluntary employee salary reductions for contributions to health flexible
spending arrangements is $2,700.
.18 Qualified Transportation Fringe Benefit. For taxable years beginning in 2019, the
monthly limitation under § 132(f)(2)(A) regarding the aggregate fringe benefit exclusion
amount for transportation in a commuter highway vehicle and any transit pass is $265.
The monthly limitation under § 132(f)(2)(B) regarding the fringe benefit exclusion
amount for qualified parking is $265.
.19 Income from United States Savings Bonds for Taxpayers Who Pay Qualified
Higher Education Expenses. For taxable years beginning in 2019, 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 $121,600 for joint returns and $81,100 for all other returns. The
exclusion is completely phased out for modified adjusted gross income of $151,600 or
more for joint returns and $96,100 or more for all other returns.
.20 Adoption Assistance Programs. For taxable years beginning in 2019, 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 $14,080. For taxable years beginning in 2019,
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 other adoptions by

 - 18 the employee is $14,080. 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 $211,160 and is completely phased out for taxpayers with modified
adjusted gross income of $251,160 or more. (See section 3.04 of this revenue
procedure for the adjusted items relating to the adoption credit.)
.21 Private Activity Bonds Volume Cap. For calendar year 2019, the amounts used
under § 146(d) to calculate the State ceiling for the volume cap for private activity bonds
is the greater of (1) $105 multiplied by the State population, or (2) $316,745,000.
.22 Loan Limits on Agricultural Bonds. For calendar year 2019, the loan limit amount
on agricultural bonds under § 147(c)(2)(A) for first-time farmers is $543,800.
.23 General Arbitrage Rebate Rules. For bond years ending in 2019, the amount of
the computation credit determined under the permission to rely on § 1.148-3(d)(4) of the
proposed Income Tax Regulations is $1,730.
.24 Safe Harbor Rules for Broker Commissions on Guaranteed Investment Contracts
or Investments Purchased for a Yield Restricted Defeasance Escrow. For calendar
year 2019, under § 1.148-5(e)(2)(iii)(B)(1), 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 exceed the lesser of (A) $41,000, and
(B) 0.2 percent of the computational base (as defined in § 1.148-5(e)(2)(iii)(B)(2)) or, if
more, $4,000; and (2) for any issue, the issuer does not treat more than $115,000 in
brokers’ commissions or similar fees as qualified administrative costs for all guaranteed

 - 19 investment contracts and investments for yield restricted defeasance escrows
purchased with gross proceeds of the issue.
.25 Gross Income Limitation for a Qualifying Relative. For taxable years beginning in
2019, the exemption amount referenced in § 152(d)(1)(B) is $4,200.
.26 Election to Expense Certain Depreciable Assets. For taxable years beginning in
2019, under § 179(b)(1), the aggregate cost of any § 179 property that a taxpayer elects
to treat as an expense cannot exceed $1,020,000 and under § 179(b)(5)(A), the cost of
any sport utility vehicle that may be taken into account under § 179 cannot exceed
$25,500. Under § 179(b)(2), the $2,550,000 limitation is reduced (but not below zero)
by the amount the cost of § 179 property placed in service during the 2019 taxable year
exceeds $2,550,000.
.27 Qualified Business Income. For taxable years beginning in 2019, the threshold
amount under § 199A(e)(2) is $321,400 for married filing joint returns, $160,725 for
married filing separate returns, and $160,700 for single and head of household returns.
.28 Eligible Long-Term Care Premiums. For taxable years beginning in 2019, the
limitations under § 213(d)(10), regarding eligible long-term care premiums includible in
the term "medical care," are as follows:
Attained Age Before the Close of the Taxable Year

Limitation on Premiums

40 or less

$420

More than 40 but not more than 50

$790

More than 50 but not more than 60

$1,580

More than 60 but not more than 70

$4,220

More than 70

$5,270

 - 20 .29 Medical Savings Accounts.
(1) Self-only coverage. For taxable years beginning in 2019, 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 $2,350 and not more than
$3,500, and under which the annual out-of-pocket expenses required to be paid (other
than for premiums) for covered benefits do not exceed $4,650.
(2) Family coverage. For taxable years beginning in 2019, the term "high deductible
health plan" means, for family coverage, a health plan that has an annual deductible
that is not less than $4,650 and not more than $7,000, and under which the annual outof-pocket expenses required to be paid (other than for premiums) for covered benefits
do not exceed $8,550.
.30 Interest on Education Loans. For taxable years beginning in 2019, the $2,500
maximum deduction for interest paid on qualified education loans under § 221 begins to
phase out under § 221(b)(2)(B) for taxpayers with modified adjusted gross income in
excess of $70,000 ($140,000 for joint returns), and is completely phased out for
taxpayers with modified adjusted gross income of $85,000 or more ($170,000 or more
for joint returns).
.31 Limitation on Use of Cash Method of Accounting. For taxable years beginning in
2019, 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
$26,000,000.

 - 21 .32 Threshold for Excess Business Loss. For taxable years beginning in 2019, in
determining a taxpayer’s excess business loss, the amount under § 461(l)(3)(A)(ii)(II) is
$255,000 ($510,000 for joint returns).
.33 Treatment of Dues Paid to Agricultural or Horticultural Organizations. For taxable
years beginning in 2019, 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 $169.
.34 Insubstantial Benefit Limitations for Contributions Associated with Charitable
Fund-Raising Campaigns.
(1) Low cost article. For taxable years beginning in 2019, for purposes of defining
the term “unrelated trade or business” for certain exempt organizations under
§ 513(h)(2), “low cost articles” are articles costing $11.10 or less.
(2) Other insubstantial benefits. For taxable years beginning in 2019, 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 $11.10, $55.50, and $111, respectively.
.35 Special Rules for Credits and Deductions. For taxable years beginning in 2019,
the amount of the deduction under § 642(b)(2)(C)(i) is $4,200.
.36 Tax on Insurance Companies Other than Life Insurance Companies. For taxable
years beginning in 2019, under § 831(b)(2)(A)(i) the amount of the limit on net written
premiums or direct written premiums (whichever is greater) is $2,300,000 to elect the

 - 22 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 2019, 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 $168,000.
.38 Tax Responsibilities of Expatriation. For taxable years beginning in 2019, 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 $725,000.
.39 Foreign Earned Income Exclusion. For taxable years beginning in 2019, the
foreign earned income exclusion amount under § 911(b)(2)(D)(i) is $105,900.
.40 Debt Instruments Arising Out of Sales or Exchanges. For calendar year 2019, a
qualified debt instrument under § 1274A(b) has stated principal that does not exceed
$5,944,600, and a cash method debt instrument under § 1274A(c)(2) has stated
principal that does not exceed $4,246,200.
.41 Unified Credit Against Estate Tax. For an estate of any decedent dying in
calendar year 2019, the basic exclusion amount is $11,400,000 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 2019, 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 $1,160,000.

 - 23 .43 Annual Exclusion for Gifts.
(1) For calendar year 2019, the first $15,000 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 2019, the first $155,000 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 2019, 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 $0.52 per shaft.
.45 Passenger Air Transportation Excise Tax. For calendar year 2019, the tax under
§ 4261(b)(1) on the amount paid for each domestic segment of taxable air
transportation is $4.20. For calendar year 2019, 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
$18.60. Under § 4261(c)(3), however, a lower amount 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 2019, the rate is $9.30.
.46 Reporting Exception for Certain Exempt Organizations with Nondeductible
Lobbying Expenditures. For taxable years beginning in 2019, the annual per person,
family, or entity dues limitation to qualify for the reporting exception under § 6033(e)(3)

 - 24 (and section 5.05 of Rev. Proc. 98-19, 1998-1 C.B. 547), regarding certain exempt
organizations with nondeductible lobbying expenditures, is $117 or less.
.47 Notice of Large Gifts Received from Foreign Persons. For taxable years
beginning in 2019, § 6039F authorizes the Treasury Department and the Internal
Revenue Service 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 $16,388.
.48 Persons Against Whom a Federal Tax Lien Is Not Valid. For calendar year 2019,
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 $1,590, 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 $7,970.
.49 Property Exempt from Levy. For calendar year 2019, 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
$9,540. 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 $4,770.
.50 Exempt Amount of Wages, Salary, or Other Income. For taxable years beginning
in 2019, the dollar amount used to calculate the amount determined under
§ 6334(d)(4)(B) is $4,200.
.51 Interest on a Certain Portion of the Estate Tax Payable in Installments. For an
estate of a decedent dying in calendar year 2019, 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 $1,550,000.

 - 25 .52 Failure to File Tax Return. In the case of any return required to be filed in 2020,
the amount of the addition to tax under § 6651(a) for failure to file a tax return within 60
days of the due date of such return (determined with regard to any extensions of time
for filing) shall not be less than the lesser of $215 or 100 percent of the amount required
to be shown as tax on such returns.
.53 Failure to File Certain Information Returns, Registration Statements, etc. For
returns required to be filed in 2020, 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
Organization (§ 6652(c)(1)(A))

Organization with gross receipts exceeding
$1,067,000 (§ 6652(c)(1)(A))
Managers (§ 6652(c)(1)(B))
Public inspection of annual returns and reports
(§ 6652(c)(1)(C))
Public inspection of applications for exemption and
notice of status (§ 6652(c)(1)(D))

Daily
Penalty
$20

Maximum Penalty
Lessor of $10,500 or
5% of gross receipts
of the organization for
the year.

$105
$10
$20

$53,000
$5,000
$10,500

$20

No Limits

(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
Organization or trust (§ 6652(c)(2)(A))
Managers (§ 6652(c)(2)(B))
Split-Interest Trust (§ 6652(c)(2)(C)(ii))
Any trust with gross income exceeding $266,500
(§ 6652(c)(2)(C)(ii))

Daily Penalty Maximum
Penalty
$10
$5,000
$10
$5,000
$20
$10,500
$105

$53,000

 - 26 (3) for failure to file a disclosure required under § 6033(a)(2):
Scenario
Tax–exempt entity (§ 6652(c)(3)(A))
Failure to comply with written demand
(§ 6652(c)(3)(B)(ii))

Daily Penalty Maximum
Penalty
$105
$53,000
$105
$10,500

.54 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
2020, the penalty amounts under § 6695 are:
Scenario
Failure to furnish copy to taxpayer (§ 6695(a))
Failure to sign return (§ 6695(b))
Failure to furnish identifying number (§ 6695(c))
Failure to retain copy or list (§ 6695(d))
Failure to file correct information returns (§ 6695(e))
Negotiation of check (§ 6695(f))
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))

Per Return or
Claim for Refund
$50
$50
$50
$50
$50 per return and
item in return
$530 per check
$530 per failure

Maximum
Penalty
$26,500
$26,500
$26,500
$26,500
$26,500
No limit
No limit

.55 Failure to File Partnership Return. In the case of any return required to be filed in
2020, the dollar amount used to determine the amount of the penalty under § 6698(b)(1)
is $205.
.56 Failure to File S Corporation Return. In the case of any return required to be filed
in 2020, the dollar amount used to determine the amount of the penalty under
§ 6699(b)(1) is $205.
.57 Failure to File Correct Information Returns. In the case of any failure relating to a
return required to be filed in 2020, the penalty amounts under § 6721 are:

 - 27 (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

General Rule (§ 6721(a)(1))
Corrected on or before 30 days after required
filing date (§ 6721(b)(1))
Corrected after 30th day but on or before
August 1 (§ 6721(b)(2))

$270

Calendar Year
Maximum
$3,339,000

$50

$556,500

$110

$1,669,500

(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

General Rule (§ 6721(d)(1)(A))
Corrected on or before 30 days after required
filing date (§ 6721(d)(1)(B))
Corrected after 30th day but on or before
August 1 (§ 6721(d)(1)(C))

$270

Calendar Year
Maximum
$1,113,000

$50

$194,500

$110

$556,500

(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

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) $550,
or (ii) 10% of
aggregate amount of
items required to be
reported correctly
Greater of (i) $550,
or (ii) 5% of
aggregate amount of
items required to be
reported correctly

Return required to be filed under §§ 6045(a),
6050K, or 6050L (§ 6721(e)(2)(B))

Return required to be filed under § 6050I(a)
(§ 6721(e)(2)(C))

Greater of (i)
$27,820, or (ii)
amount of cash

Calendar Year
Maximum
No limit

No limit

No limit

 - 28 -

Return required to be filed under § 6050V
(§ 6721(e)(2)(D))

received up to
$111,000
Greater of (i) $550,
No limit
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

.58 Failure to Furnish Correct Payee Statements. In the case of any failure relating to
a statement required to be furnished in 2020, 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 file correct information returns:
Scenario

Penalty Per Return

General Rule (§ 6722(a)(1))
Corrected on or before 30 days after required
filing date (§ 6722(b)(1))
Corrected after 30th day but on or before
August 1 (§ 6722(b)(2))

$270

Calendar Year
Maximum
$3,339,000

$50

$556,500

$110

$1,669,500

(2) for persons with average annual gross receipts for the most recent 3 taxable
years of $5,000,000 or less, for failure to file correct information returns:
Scenario

Penalty Per Return

General Rule (§ 6722(d)(1)(A))
Corrected on or before 30 days after required
filing date (§ 6722(d)(1)(B))
Corrected after 30th day but on or before
August 1 (§ 6722(d)(1)(C))

$270

Calendar Year
Maximum
$1,113,000

$50

$194,500

$110

$556,500

 - 29 (3) for failure to file correct payee statements due to intentional disregard of the
requirement to furnish a payee statement (or the correct information reporting
requirement):
Scenario

Penalty Per Return

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))
Payee statement required under §§ 6045(b),
6050K(b), or 6050L(c) (§ 6722(e)(2)(B))

Greater of (i) $550,
or (ii) 10% of
aggregate amount of
items required to be
reported correctly
Greater of (i) $550,
or (ii) 5% of
aggregate amount of
items required to be
reported correctly

Calendar Year
Maximum
No limit

No limit

.59 Revocation or Denial of Passport in Case of Certain Tax Delinquencies. For
calendar year 2019, the amount of a serious delinquent tax debt under § 7345 is
$52,000.
.60 Attorney Fee Awards. For fees incurred in calendar year 2019, the attorney fee
award limitation under § 7430(c)(1)(B)(iii) is $200 per hour.
.61 Periodic Payments Received Under Qualified Long-Term Care Insurance
Contracts or Under Certain Life Insurance Contracts. For calendar year 2019, the
stated dollar amount of the per diem limitation under § 7702B(d)(4), regarding periodic
payments 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 $370.
.62 Qualified Small Employer Health Reimbursement Arrangement. For taxable years
beginning in 2019, to qualify as a qualified small employer health reimbursement

 - 30 arrangement under § 9831(d), the arrangement must provide that the total amount of
payments and reimbursements for any year cannot exceed $5,150 ($10,450 for family
coverage).
SECTION 4. EFFECTIVE DATE
.01 General Rule. Except as provided in section 4.02, this revenue procedure applies
to taxable years beginning in 2019.
.02 Calendar Year Rule. This revenue procedure applies to transactions or events
occurring in calendar year 2019 for purposes of sections 3.09 (rehabilitation
expenditures treated as separate new building), 3.10 (low-income housing credit), 3.15
(transportation mainline pipeline construction industry optional expense substantiation
rules for payments to employees under accountable plans), 3.21 (private activity bonds
volume cap), 3.22 (loan limits on agricultural bonds), 3.23 (general arbitrage rebate
rules), 3.24 (safe harbor rules for broker commissions on guaranteed investment
contracts or investments purchased for a yield restricted defeasance escrow), 3.37
(expatriation to avoid taxes), 3.40 (debt instruments arising out of sales or exchanges),
3.41 (unified credit against estate tax), 3.42 (valuation of qualified real property in
decedent's gross estate), 3.43 (annual exclusion for gifts), 3.44 (tax on arrow shafts),
3.45 (passenger air transportation excise tax), 3.48 (persons against whom a federal tax
lien is not valid), 3.49 (property exempt from levy), 3.51 (interest on a certain portion of
the estate tax payable in installments), 3.59 (revocation or denial of passport in case of
certain tax delinquencies), 3.60 (attorney fee awards), and 3.61 (periodic payments
received under qualified long-term care insurance contracts or under certain life
insurance contracts).

 - 31 SECTION 5. DRAFTING INFORMATION
The principal author of this revenue procedure is William Ruane of the Office of
Associate Chief Counsel (Income Tax & Accounting). For further information regarding
this revenue procedure, contact Mr. Ruane at (202) 317-4718 (not a toll-free call).