K-1 (1120-S) box 17 code V: section 199A information for the QBI deduction

“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 publicly traded partnership (PTP) income from your S corporation.” IRS, Shareholder's Instructions for Schedule K-1 (Form 1120-S) (2025), box 17, code V

What does box 17 code V report on a K-1 (1120-S)?

Box 17 code V on Schedule K-1 (Form 1120-S) reports the section 199A information a shareholder needs to figure the qualified business income (QBI) deduction. The deduction is figured by the shareholder, so the S corporation reports the inputs, not the deduction. According to the 2025 Instructions for Form 1120-S, the corporation enters "V*" with "STMT" and attaches a statement that separately identifies, for each trade or business, the shareholder's share of qualified items of income, gain, deduction and loss, W-2 wages, unadjusted basis immediately after acquisition (UBIA) of qualified property, qualified publicly traded partnership (PTP) items and section 199A dividends.

The corporation uses Statement A for these amounts, Statement B for any aggregation of businesses, and Statement C if it's a patron of a specified agricultural or horticultural cooperative. Statement A flags each business as an SSTB, aggregated or PTP. The instructions tell the corporation not to add the items into a single number in box 17.

Where does each code V item go on Form 8995 or 8995-A?

Each item on the box 17 code V statement maps to a line on Form 8995 or Form 8995-A, and taxable income decides which form applies. For 2025 the Shareholder's Instructions direct shareholders to Form 8995 when taxable income before the QBI deduction is $197,300 or less ($394,600 if married filing jointly) and they aren't a patron of a specified cooperative. Everyone else uses Form 8995-A.

Form 8995 ignores W-2 wages and UBIA because the wage and property limits apply only above the threshold. On Form 8995-A, Part III phases those limits in over the next $50,000 of taxable income ($100,000 if married filing jointly), so for 2025 the phase-in range runs to $247,300 ($494,600 joint). W-2 wages and UBIA from a PTP are never reported, according to the Instructions for Form 1120-S, because they can't be used in the limits.

How does a shareholder turn code V amounts into QBI?

The box 17 code V amounts are labeled "subject to shareholder-specific determinations" because they aren't automatically QBI. The 2025 Instructions for Form 8995 say an item counts only if it was used in computing taxable income for the year, so the shareholder applies the K-1 loss limits first.

• Losses suspended under section 1366(d) (basis), 465 (at-risk), 469 (passive) or 461(l) stay out of QBI until they are allowed, then come in as a qualified loss carryforward on Form 8995, line 3
• Reasonable compensation the shareholder receives from the S corporation is not QBI
• Section 1231 gain counts only if it isn't treated as capital gain
• Items attributable to the business reduce QBI; the Form 8995 instructions list business interest expense, the deductible part of self-employment tax, the self-employment health insurance deduction and qualified retirement plan contributions

The instructions require suspended losses to be tracked by category, qualified or not, until they are used, and they include a QBI loss tracking worksheet for it. Losses from before 2018 are never QBI. This is where Form 7203 and code V meet: a box 1 loss that Form 7203 limits to basis reduces QBI only by the allowed part. The rest waits for the year basis frees it up. Where the K-1 box itself goes is on the Schedule K-1 (Form 1120-S) page.

What does a Form 8995 calculation from code V look like?

For example, Priya and her spouse file jointly with 2025 taxable income of $310,000 before the QBI deduction, including $10,000 of net capital gain and qualified dividends. Priya owns 50% of one S corporation that isn't an SSTB, and no limit restricts her K-1 amounts. Her code V statement shows $120,000 of QBI from ordinary business income, $90,000 of W-2 wages, $50,000 of UBIA and $2,000 of section 199A dividends. Because $310,000 is below the $394,600 joint threshold, she uses Form 8995.

The $90,000 of W-2 wages and the $50,000 of UBIA don't enter the calculation on Form 8995. If the couple's taxable income had been above $394,600, Priya would use Form 8995-A, and those two numbers would set the wage and property limit on lines 4 to 11. The full method is on the QBI deduction page.

What do reviewers check on box 17 code V?

A reviewer checking box 17 code V of Schedule K-1 (Form 1120-S) confirms six items against the Instructions for Form 1120-S and the Instructions for Forms 8995 and 8995-A. Start with taxable income before the QBI deduction, because it decides the form, whether an SSTB counts and whether W-2 wages and UBIA matter. Then put the code V statement next to Form 7203, Form 6198 and Form 8582, since the loss allowed on those forms, not the K-1 figure, is what enters QBI. Last, check the prior-year return for a qualified business loss carryforward on Form 8995, line 16, which comes into this year on line 3, and for aggregations reported in earlier years, which must be reported consistently unless the facts change.