U.S. · Form 8995 line 11
Form 8995 line 11 taxable income.
How line 11 is figured, and how it caps the QBI deduction on lines 13 to 15.
Line 11 is your taxable income figured before any QBI deduction. For Form 1040 or 1040-SR filers the 2025 instructions say to take line 11a minus lines 12e and 13b. Lines 13 to 15 then limit the deduction: line 13 is line 11 minus line 12 (net capital gain plus qualified dividends), line 14 is 20% of line 13, and line 15 is the smaller of line 10 or line 14.
Apply the income limitation
Result
Reference table
| Filer | How the 2025 instructions say to figure line 11 |
|---|---|
| Form 1040 or 1040-SR | Form 1040 or 1040-SR, line 11a, minus lines 12e and 13b. |
| Form 1040-NR | Form 1040-NR, line 11a, minus lines 12, 13b and 13c. |
| Form 1041 | Form 1041, line 17, minus lines 18, 19 and 21. |
| Form 1041-N | Form 1041-N, line 5, minus lines 12 (except for any QBI that would be reported on line 9). |
| Form 990-T | Form 990-T, Part I, line 7, minus line 8. |
| S-corporation portion of an ESBT | ESBT Tax Worksheet, line 5, minus lines 6 through 10. |
Why line 11 matters
Form 8995 gives you up to 20% of qualified business income plus 20% of qualified REIT dividends and PTP income, but the instructions cap the total at 20% of taxable income calculated before the QBI deduction, minus net capital gain (increased by any qualified dividends). Line 11 is the starting point for that cap. It also decides which form you use: Form 8995 is for taxable income before the QBI deduction of $394,600 or less if married filing jointly and $197,300 or less for all other returns.
Line 12 for Form 1040 filers
For Form 1040, 1040-SR or 1040-NR, line 12 is line 3a (qualified dividends) plus your net capital gain. If you are not required to file Schedule D, net capital gain is the amount on line 7a. If you file Schedule D, it is the smaller of Schedule D line 15 or 16, unless line 15 or 16 is zero or less, in which case nothing is added to the qualified dividends.
Worked example
With line 10 at $20,000, line 11 at $150,000 and line 12 at $20,000: line 13 is $130,000, line 14 is 20% of that, or $26,000, and line 15 is the smaller of $20,000 and $26,000, so the deduction is $20,000. If line 12 were $140,000, line 13 would be $10,000, line 14 would be $2,000, and the deduction would be capped at $2,000. All amounts are illustrative.
What happens to line 15
The instructions send line 15 to Form 1040 or 1040-SR, line 13a (Form 1041 line 20, Form 1041-N line 9, Form 990-T line 9). Negative QBI carries forward on lines 16 and 17 and offsets QBI or REIT and PTP income in later years. Use the QBI deduction calculator for the earlier lines, and the Form 8995 vs 8995-A chooser if your income is near the threshold.
Sources
- Instructions for Form 8995 (2025): Line 11, 12 and 15 instructions and the purpose of the form. Read November 2, 2026.
- Form 8995 (2025): The form itself, for exact line wording. Read November 2, 2026.
These are the tax year 2025 edition instructions and forms (published for returns filed in 2026). The IRS revises them each year, so thresholds, line numbers and limits can change; check the current edition before relying on a figure.
Frequently asked questions
What is line 11 on Form 8995?
Line 11 is your taxable income figured before any QBI deduction. For Form 1040 or 1040-SR it is line 11a minus lines 12e and 13b.
What goes on line 12 of Form 8995?
For Form 1040, 1040-SR or 1040-NR it is line 3a plus your net capital gain. Without Schedule D, net capital gain is line 7a; with Schedule D it is the smaller of Schedule D line 15 or 16, unless either is zero or less.
How is the Form 8995 income limitation figured?
Line 13 is line 11 minus line 12 (not below zero), line 14 is 20% of line 13, and line 15, the deduction, is the smaller of line 10 or line 14.
Where does Form 8995 line 15 go?
On Form 1040 or 1040-SR, line 13a, per the instructions. Other returns use Form 1041 line 20, Form 1041-N line 9, Form 990-T line 9 or the ESBT worksheet line 11.
Can I use Form 8995 if line 11 is above the threshold?
Not under the instructions. Form 8995 is for 2025 taxable income before the QBI deduction of $394,600 or less if married filing jointly and $197,300 or less for all other returns; otherwise use Form 8995-A.
Not tax or legal advice
This page summarizes IRS instructions and is not tax, legal or financial advice. A CPA, enrolled agent or the IRS can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.