8995

Qualified Business Income Deduction Simplified Computation

Agency
IRS
Revision
2025
Fillable fields
33
Pages
1
Official source
IRS form page
Checked
October 21, 2026
Fill 8995 online
Page 1 of form 8995

Form 8995 (2025): Qualified Business Income Deduction Simplified Computation

Form 8995, Qualified Business Income Deduction Simplified Computation, is used to figure the qualified business income (QBI) deduction. This is the 2025 form, and it is attached to the tax return.

The instructions say individuals and some trusts and estates may be entitled to a deduction of up to 20% of their net QBI from a trade or business, including income from a pass-through entity but not from a C corporation, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. The total deduction is limited to 20% of taxable income figured before the QBI deduction, minus net capital gain (increased by any qualified dividends).

The form says to use it if taxable income before the QBI deduction is at or below $197,300 ($394,600 if married filing jointly) and the filer isn't a patron of an agricultural or horticultural cooperative. Otherwise the instructions point to Form 8995-A. You can fill out Form 8995 free in your browser on this page and download the result without an account.

What's on Form 8995

Header and note

The name or names shown on the return, the taxpayer identification number, and a note on what income qualifies and who uses this form.

Line 1: businesses

Five rows, i through v, each with (a) trade, business or aggregation name, (b) taxpayer identification number and (c) qualified business income or (loss).

Lines 2 to 5: QBI component

Total QBI, the qualified business net (loss) carryforward from the prior year, the combined total, and 20% (0.20) of that total.

Lines 6 to 9: REIT and PTP component

Qualified REIT dividends and PTP income or (loss), the prior-year (loss) carryforward, the combined total, and 20% (0.20) of it.

Lines 10 to 15: the deduction

The deduction before the income limitation, taxable income before the QBI deduction, net capital gain plus qualified dividends, the 20% income limitation, and the deduction itself.

Lines 16 and 17: carryforwards

The total qualified business (loss) carryforward and the total qualified REIT dividends and PTP (loss) carryforward to the next year.

How to fill out Form 8995

  1. 1

    Line 1

    Enter each trade or business, its EIN (or SSN or ITIN if there is no EIN) and its net QBI or loss. The instructions say an aggregation is entered by group name, such as Aggregation 1, with 1(b) left blank and Schedule B (Form 8995-A) attached.

  2. 2

    Lines 2 to 5

    Combine line 1 column (c). The instructions say to attach a statement for more than five businesses. Line 3 holds the qualified portion of a prior loss carryforward. Line 4 is zero if zero or less, and line 5 is 20% of line 4.

  3. 3

    Lines 6 to 9

    Enter qualified REIT dividends and PTP income as a positive number and losses as a negative number. The instructions say qualified REIT dividends are reported on Form 1099-DIV, line 5. Line 9 is 20% of line 8.

  4. 4

    Lines 10 to 14

    Add lines 5 and 9. Enter taxable income figured before any QBI deduction on line 11, as the instructions describe, and net capital gain increased by qualified dividends on line 12. Line 14 is 20% of line 13.

  5. 5

    Line 15

    Enter the smaller of line 10 or line 14. The instructions say this goes on Form 1040, 1040-SR or 1040-NR, line 13a, or Form 1041, line 20, among other returns.

  6. 6

    Lines 16 and 17

    Combine lines 2 and 3, and lines 6 and 7, entering zero if the result is greater than zero. The instructions say these losses carry forward to offset QBI or REIT and PTP income in later years.

Why fill Form 8995 on indox

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Where it goes and what to watch

Attach to the return

The form says to attach it to your tax return. Line 15 carries the deduction to the return.

Form 8995-A instead

The instructions point to Form 8995-A when taxable income before the QBI deduction is above $197,300 ($394,600 if married filing jointly) or the filer is a patron in a specified agricultural or horticultural cooperative.

Line 11 correction

The IRS About page lists "Corrections to the instructions on how to calculate the taxable income before QBI deduction for Form 8995" dated 13-FEB-2026. That is the figure entered on line 11.

What isn't QBI

The instructions list items not included, such as wage income (except statutory employees), reasonable compensation from an S corporation, guaranteed payments, capital gains or losses, dividends, qualified REIT dividends and qualified PTP income.

ESBT filers

The instructions say the Form 8995 for an ESBT's S portion is attached as a PDF to the ESBT tax worksheet filed with Form 1041, with "ESBT" written in the top margin.

Related forms

Who uses Form 8995?

  • Individuals with business income

    Filers with QBI, qualified REIT dividends, or qualified PTP income or loss whose 2025 taxable income before the QBI deduction is $197,300 or less, or $394,600 or less if married filing jointly.

  • Eligible estates and trusts

    The instructions say a non-grantor trust or estate may generally either claim the QBI deduction or provide information to its beneficiaries. An ESBT figures the deduction separately for its S portion.

  • Not S corporations or partnerships

    The instructions say S corporations and partnerships aren't eligible for the deduction, but pass the needed information to shareholders or partners on an attachment to Schedule K-1.

  • Not cooperatives

    Cooperatives aren't eligible either. The instructions say they give patrons the information on Form 1099-PATR or an attachment.

  • Above the threshold: Form 8995-A

    Filers over the taxable income threshold, or who are patrons in a specified agricultural or horticultural cooperative, use Form 8995-A instead, the instructions say.

The instructions say individuals and eligible estates and trusts that have QBI use Form 8995 when the conditions below are met.

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Questions about Form 8995

Who can use Form 8995?

The instructions say individuals and eligible estates and trusts with QBI, qualified REIT dividends or qualified PTP income, whose 2025 taxable income before the QBI deduction is $197,300 or less ($394,600 if married filing jointly), and who aren't patrons in a specified agricultural or horticultural cooperative.

What if taxable income is above the limit?

The instructions say to use Form 8995-A, Qualified Business Income Deduction, instead.

How large can the deduction be?

The instructions describe up to 20% of net QBI plus 20% of qualified REIT dividends and qualified PTP income, limited to 20% of taxable income before the QBI deduction minus net capital gain (increased by qualified dividends).

Can an S corporation or partnership claim the deduction?

No. The instructions say they aren't eligible, but pass the needed information to shareholders or partners on an attachment to Schedule K-1.

Is wage income qualified business income?

The instructions say amounts in Form W-2, box 1, aren't QBI, except when the Statutory Employee box in box 13 is checked.

Where does the deduction on line 15 go?

The instructions name Form 1040, 1040-SR or 1040-NR, line 13a, and Form 1041, line 20, along with lines on Forms 1041-N and 990-T and the ESBT worksheet.

What happens to a business loss?

The instructions say a qualified business net loss for the year is carried forward to the next year on line 16, and it will offset QBI in later years even if the business that generated it no longer exists.