The Qualified Business Income (QBI) deduction, claimed using Form 8995 or Form 8995-A, is available to eligible individuals, estates, and trusts. However, if you wish to remove this deduction from your return, you must ensure you do not meet the eligibility criteria or choose not to claim it. Here’s how:
When You Are Not Required to File Form 8995 or 8995-A
- Below the Income Threshold: If your taxable income before the QBI deduction is $197,300 or less (for single, head of household, married filing separately, or qualifying widow(er)) or $394,600 or less (married filing jointly), you may use Form 8995 for a simplified computation. If you do not wish to claim the deduction, you can simply not complete the form.
- Not an Eligible Taxpayer: S corporations and partnerships are not eligible to claim the QBI deduction themselves. Instead, they pass through information to shareholders or partners via Schedule K-1. If you are a shareholder or partner, you may choose not to claim the deduction on your own return.
- Patron of a Cooperative: If you are a patron in a specified agricultural or horticultural cooperative and receive qualified payments reported on Form 1099-PATR, you must reduce your QBI by the patron reduction and use Form 8995-A. If you do not wish to claim the deduction, you may still file Form 8995-A but enter zero for the deduction amount.
How to Exclude the QBI Deduction in Tax Software
If you are using tax preparation software provided by Online Taxes (OLT), you can choose not to claim the QBI deduction by following these steps:
- From within your tax return, navigate to the Federal section.
- Under the Deduction section, click on "Show more" near "Qualified Business Income Deduction - Form 8995 / 8995-A".
- Select "Add or Edit" next to the QBI deduction option.
- Follow the on-screen instructions and choose not to claim the deduction (enter zero or skip relevant fields).
Important Notes
- You cannot remove Form 8995 or 8995-A from your return if you are required to file it based on your income and business structure.
- If you have QBI, qualified REIT dividends, or qualified PTP income, and your taxable income exceeds the threshold, you must use Form 8995-A to compute your deduction. However, you may choose to claim zero deduction if desired.
- Do not include amounts deducted under IRC 224 for qualified tips in QBI calculations.
Source:
Form 8995-A
Form 8995
Disclaimer: Always verify details with the current year’s IRS Form and Instructions or consult a tax professional. The information provided is based on IRS guidance for 2025 and may not apply to all situations.