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Per IRS Instructions for Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. (For Partner's Use Only), on page 17:

Codes Z. Section 199A information. Generally, you may be allowed a deduction of up to 20% of your net qualified business income (QBI) plus 20% of your qualified REIT dividends, also known as section 199A dividends, and qualified PTP income from your partnership. The partnership will provide the information you need to figure your deduction. Use one of these forms to figure your QBI deduction.

  1. Use Form 8995, Qualified Business Income Deduction Simplified Computation, if all of the following apply.
    a. You have QBI, section 199A dividends, or PTP income (defined below), and
    b. Your 2020 taxable income before the QBI deduction is equal to or less than $163,300 ($326,600 if married filing jointly), and
    c. You aren’t a patron in a specified agricultural or horticultural cooperative.
  2. Use Form 8995-A, Qualified Business Income Deduction, if you don't meet all three of the above requirements.

Use the information provided by your partnership to complete the appropriate form listed above. For definitions and more information, see the Instructions for Form 8995 or the Instructions for Form 8995-A, as appropriate.

See the instructions for additional information.

To enter the Qualified business income (QBI) information from Schedule K-1 in TaxAct:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Business Income in the Federal Quick Q&A Topics menu to expand, then click Partnership income (Form 1065 Schedule K-1).
  3. Click + Add Partnership Schedule K-1 to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.
  5. On the screen titled Partnership - Schedule K-1 Information, check Box 20 - Other information, click Continue.
  6. On the screen titled Partnership - Other Information, click Yes.
  7. On the screen titled Partnership - Other Information - Box 20AA - AF, enter or review the appropriate information, then click Continue.

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Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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