Which Form is the QBI Deduction Claimed On?
The Qualified Business Income (QBI) deduction is claimed on either Form 8995 or Form 8995-A, depending on your taxable income and eligibility criteria for the 2025 tax year.
When to Use Form 8995
Use Form 8995, Qualified Business Income Deduction Simplified Computation, if all of the following conditions are met:
- You have QBI, qualified REIT dividends, or qualified PTP income (as defined in IRS guidelines).
- Your 2025 taxable income before the QBI deduction is $197,300 or less (if filing as single, married filing separately, head of household, qualifying surviving spouse, or as a trust/estate), or $394,600 or less if married filing jointly.
- You are not a patron in a specified agricultural or horticultural cooperative.
When to Use Form 8995-A
Use Form 8995-A, Qualified Business Income Deduction, if you do not meet all the requirements for Form 8995. This includes situations where:
- Your taxable income before the QBI deduction exceeds $394,600 (married filing jointly) or $197,300 (all other filing statuses).
- You are a patron in a specified agricultural or horticultural cooperative.
Key Details About QBI Deduction
- The QBI deduction allows eligible taxpayers to deduct up to 20% of their net qualified business income from pass-through entities (such as partnerships, S corporations, sole proprietorships), plus 20% of qualified REIT dividends and qualified PTP income.
- The deduction is limited to 20% of taxable income (calculated before the QBI deduction), minus net capital gain and qualified dividends.
- Information for calculating the deduction is typically provided on Schedule K-1 from partnerships (Form 1065), S corporations (Form 1120-S), or trusts/estates (Form 1041).
Source:
Form 8995
Form 8995-A
Schedule K-1 (1041)
Schedule K-1 (1120-S)
Schedule K-1 (1065)
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions.