What is Schedule 3?
Schedule 3 collects all tax credits and additional payments. Part I has non-refundable credits (limited to tax liability). Part II has refundable credits and other payments (can generate a refund).
SupportedKey Lines
| Part | Line | Description | Source |
|---|---|---|---|
| Part I — Non-Refundable | Line 1 | Foreign tax credit | Form 1116 |
| Line 2 | Child/dependent care credit | Form 2441 | |
| Line 3 | Education credits (AOTC 60% + LLC) | Form 8863 | |
| Line 4 | Saver's credit | Form 8880 | |
| Line 5 | Residential clean energy credit | Form 5695 Part I | |
| Line 5b | Energy efficient home improvement | Form 5695 Part II | |
| Line 6a | Child Tax Credit / ODC | Form 8812 | |
| Line 6d | General business credit | Form 3800 | |
| Line 6e | Clean vehicle credit | Form 8936 | |
| Line 6j | Alternative fuel vehicle credit | Form 8911 | |
| Line 8 | Total non-refundable credits | → Form 1040 Line 20 | |
| Part II — Refundable | Line 9 | Net premium tax credit | Form 8962 |
| Line 13a | Additional Child Tax Credit | Form 8812 | |
| Line 13b | AOTC refundable (40%) | Form 8863 | |
| Line 15 | Total refundable credits | → Form 1040 Line 31 |
How PaisaTax Handles It
- Fully computed — all credit forms feed into Schedule 3 automatically
- Non-refundable credits reduce tax but cannot go below zero
- Refundable credits can generate a refund even with zero tax liability