What this line means
The domestic production activities deduction (DPAD) under Section 199A(g) allocated to you from an agricultural or horticultural cooperative. If you are a patron of a qualifying cooperative and received a notice showing a DPAD allocation, enter that amount here. Most filers enter zero on this line. 1
Does this apply to you?
- You are a patron (member or customer) of an agricultural or horticultural cooperative
- You received a written notice from a cooperative showing a DPAD allocation under Section 199A(g)
- You sold agricultural or horticultural products through a cooperative during the tax year
- You are not a cooperative patron and have no DPAD allocation (enter zero)
Easy to overlook
The cooperative sends you the DPAD amount — you do not calculate it yourself The cooperative determines the DPAD and allocates a portion to each patron. Your job is to enter the amount from the notice you received. If you did not receive a notice, you have no DPAD. Do not try to calculate this amount based on your sales to the cooperative. 2 IRS Form 8995 Instructions — Line 15
The cooperative DPAD is added after the income limitation Unlike the QBI component, the DPAD from a cooperative is not subject to the income limitation on line 13. It is added to line 14 (the limited deduction) to produce the final deduction on line 16. This means the cooperative DPAD can push your total deduction above what the income limitation would otherwise allow. 3 IRS Publication 535 — Qualified Business Income Deduction
Watch out for this
Claiming a DPAD when you did not receive a written allocation from a cooperative. The cooperative must provide you with the specific DPAD amount — it is not a deduction you can claim simply because you sold products through a cooperative. Without a written notice, this line is zero. Filing a nonzero amount without documentation will not survive IRS scrutiny.
Footnotes
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IRS Form 8995 Instructions, Line 15. https://www.irs.gov/instructions/i8995 ↩
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IRS Form 8995 Instructions, Line 15 — Patron Allocation. https://www.irs.gov/instructions/i8995 ↩
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IRS Publication 535, Business Expenses, Chapter 12 — Cooperative DPAD. https://www.irs.gov/pub/irs-pdf/p535.pdf ↩