The Qualified Business Income (QBI) deduction is claimed on either Form 8995 or Form 8995-A, depending on the taxpayer’s circumstances.
Form 8995 – Simplified Computation
- Used by individuals and eligible estates and trusts if their taxable income before the QBI deduction is $394,600 or less (married filing jointly) or $197,300 or less (all other filing statuses).
- Also used if the taxpayer is not a patron in a specified agricultural or horticultural cooperative.
- Form 8995 is designed for simpler calculations and is appropriate for taxpayers below the income threshold.
Form 8995-A – Detailed Computation
- Used by individuals and eligible estates and trusts if their taxable income before the QBI deduction exceeds $394,600 (married filing jointly) or $197,300 (all other filing statuses).
- Also required for taxpayers who are patrons in a specified agricultural or horticultural cooperative.
- Form 8995-A allows for more detailed calculations, including aggregation of business operations, loss netting, and special rules for patrons.
Where to Report the Deduction
- The QBI deduction amount (from line 39 of Form 8995 or Form 8995-A) is entered on the appropriate tax return form:
- Form 1040 or 1040-SR: Line 13a
- Form 1040-NR: Line 13a
Source:
Form 8995 Instructions (2025)
Form 8995-A Instructions (2025)
Disclaimer: Always verify with the current year’s Federal or State Department of Revenue Forms and Instructions. Tax laws and forms may change annually. For complex situations, consult a CPA or tax attorney.