The Form 1040 EZ is a simplified version of the standard Internal Revenue Service (IRS) Form 1040, which reports individual income for United States citizens and residents. The Form 1040 EZ was developed as an easy alternative to the "long form" 1040 for people with fairly simple tax situations and there are strict requirements on who is allowed to use this form as opposed to the standard 1040 or the 1040A forms.

First there are a series of income limits that determine whether or not you are allowed to use Form 1040 EZ. People that made $100,000 or more during the tax year are not allowed to use the form and neither are people who earned more than $1,500 in taxable interest from any investment or holding.

Generally speaking these restrictions are not too much of a problem since most people earning more than this or making more from interest have more complex tax structures and prefer the greater options allowed on the other 1040 forms.

Another restriction relates to the sources of your income. For the most part, you can only have earned basic income from wages and salaries, and any tips you may have made have to be reported on your W-2 from your employer. There are a couple of less common sources of income that are also permitted such as unemployment payments, taxable scholarship or fellowship grants, and dividends from the Alaska Permanent Fund. Otherwise though, income from other sources means you are disqualified from using Form 1040 EZ.

There are also personal status restrictions. You can use the Form 1040 EZ either as a single filer or as a married joint filer, but not with any other status. Similarly, whether single or married and filing jointly, you can not use the Form 1040 EZ if you are claiming any dependents.

Likewise, you (and your spouse if filing jointly) must both be below the age of sixty-five. Finally, you cannot use Form 1040 EZ if you are blind.

You can claim the earned income credit (the tax credit given to low income workers with at least one child to offset the expense of payroll taxes) and still use the Form 1040 EZ. However, if you received any advanced earned income credit payments before your annual filing – a common option used today – you are not allowed to use Form 1040 EZ.

This is common mistake made by low earning people that qualify for the earned income credit. You can also claim the making work pay credit and still use the 1040 EZ, though if you want to claim any other credits beyond these two, you cannot use the Form 1040 EZ.