Updated October 17, 2026. Quick answer: Lines 8q to 8s of Schedule 1 cover taxable distributions from an ABLE account, scholarship and fellowship grants not reported on Form W-2, and the nontaxable amount of Medicaid waiver payments. Line 8s is entered as a negative number in the preprinted parentheses.
IRS worksheets read line by line: Pub 970 Worksheet 1-1.
Read box by box from the IRS form text: Form 1099-QA boxes 1 to 3 and Form 1099-QA boxes 4 to 6.
Line-by-line IRS form guides for 2025: Form 8863 line 31.
What lines 8q to 8s ask for
On Schedule 1 (Form 1040) the captions read “Taxable distributions from an ABLE account”, “Scholarship and fellowship grants not reported on Form W-2” and “Nontaxable amount of Medicaid waiver payments included on Form 1040, line 1a or 1d”. Line 8s has parentheses printed beside it on the form.
Line 8q: taxable ABLE account distributions
The instructions explain when a distribution is taxable: “Distributions from this type of account may be taxable if (a) they are more than the designated beneficiary’s qualified disability expenses, and (b) they were not included in a qualified rollover.” They add a pointer, “See Pub. 907 for more information.” A caution follows: “You may have to pay an additional tax if you received a taxable distribution from an ABLE account. See the Instructions for Form 5329.”
For the accounts themselves, see the pages on ABLE accounts and age 46 and the ABLE contribution limit, and the Form 5329 page for the additional tax form.
Line 8r: scholarship and fellowship grants
The instruction for line 8r reads “Enter the amount of scholarship and fellowship grants not reported on Form W-2.” It then limits the entry for degree candidates: “However, if you were a degree candidate, include on line 8r only the amounts you used for expenses other than tuition and” course-related expenses. An example is given: “For example, amounts used for room, board, and travel must be reported on line 8r.” The statement that reports scholarships and grants is discussed on the page for 1098-T box 5.
Line 8s: Medicaid waiver payments
The instructions begin: “Certain Medicaid waiver payments you received for caring for someone living in your home with you may be nontaxable.” They say where they are reported: “Your nontaxable Medicaid waiver payments should be reported to you on Form(s) W-2 in box 12, Code II.” For payments in box 1 of the W-2: “If nontaxable payments were reported to you in box 1 of Form(s) W-2, report the amount on Form 1040 or 1040-SR, line 1a.”
The entry on line 8s itself is the total of those amounts: “enter the total amount of the nontaxable payments reported on Form 1040 or 1040-SR, line 1a or 1d” and the instruction adds that the entry goes in “the preprinted parentheses (as a negative number)”. For someone with no separate business: “If you do not have a separate trade or business of providing these services, enter any nontaxable Medicaid waiver payments on Schedule 1, line 8s.” See the page on W-2 box 12 and box 1 for the W-2 boxes.
Where the number comes from
Line 8q comes from the statement of distributions for the ABLE account and your records of the beneficiary’s qualified disability expenses. Line 8r comes from your scholarship and fellowship records. Line 8s comes from the Medicaid waiver payments already entered on Form 1040, line 1a or 1d.
Where it goes next
Lines 8q and 8r add to the other income entries, and line 8s, being entered as a negative number, reduces them. The schedule then totals the other income lines. The caption for line 9 reads “Total other income. Add lines 8a through 8z.”. Line 10 then combines the pieces: “Combine lines 1 through 7 and 9. This is your additional income.” The same caption tells you where the result goes: “Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8”. The two totals are explained on the page for lines 9 and 10.
Edition and line numbers
This page reads the 2025 Schedule 1 and the 2025 Form 1040 instructions, the current files irs.gov served on 2026-10-17. They are the forms for the tax year 2025 return, filed in 2026. The schedule’s heading reads “Attach to Form 1040, 1040-SR, or 1040-NR.” Check the tax year printed on the schedule in front of you and use the line numbers on that year’s schedule, because a different year’s schedule can number or word its lines differently.
Common mistakes
- Treating every ABLE distribution as taxable. The instructions say the distributions “may be taxable if (a) they are more than the designated beneficiary’s qualified disability expenses” and also not rolled over.
- Entering a degree candidate’s whole grant on line 8r. The instruction says “include on line 8r only the amounts you used for expenses other than tuition and” course-related expenses.
- Entering Medicaid waiver payments on line 8s as a positive number. The instruction says to enter the total “the preprinted parentheses (as a negative number)”.
Related: ABLE accounts and age 46, Form 5329, 1098-T box 5, W-2 box 12 and box 1, and Schedule 1 (Form 1040).
Sources
- Instructions for Form 1040 and Form 1040-SR (2025): https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
- Schedule 1 (Form 1040), Additional Income and Adjustments to Income (2025): https://www.irs.gov/pub/irs-pdf/f1040s1.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.