What this line means
The net QBI loss carried forward from last year’s tax return. If your total QBI was negative in a prior year, that loss did not just disappear — it carries forward and reduces your QBI in this year. Enter the amount from last year’s Form 8995 line 17 as a negative number. 1
Does this apply to you?
- You filed Form 8995 last year and line 17 showed a negative QBI carryforward amount
- Your total QBI was negative in a prior year because business losses exceeded business income
- You had a loss from a sole proprietorship or pass-through entity in a prior year that created negative QBI
- You are filing Form 8995 for the first time this year and had no prior-year QBI loss (enter zero)
Easy to overlook
The carryforward comes from line 17 of the prior year’s Form 8995 This is not the same as a net operating loss (NOL) carryforward. QBI loss carryforward is tracked separately on Form 8995 and does not appear on any other form. If you did not file Form 8995 last year, you have no QBI carryforward — even if you had business losses. 2 IRS Form 8995 Instructions — Line 2
Carryforwards do not expire under current law Unlike some tax provisions with time limits, the QBI loss carryforward has no expiration date under Section 199A. A large business loss in 2023 still reduces QBI in 2025, 2026, or any future year until fully absorbed. Filers sometimes assume old losses are gone. 3 IRS Publication 535 — Qualified Business Income Deduction
Watch out for this
Entering this amount as a positive number instead of negative. The loss carryforward must be entered as a negative number because it reduces your current-year QBI. If you enter it as positive, you double your QBI instead of reducing it, which inflates your deduction and triggers an IRS notice.
Footnotes
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IRS Form 8995 Instructions, Line 2. https://www.irs.gov/instructions/i8995 ↩
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IRS Form 8995 Instructions, Line 2 — Carryforward Instructions. https://www.irs.gov/instructions/i8995 ↩
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IRS Publication 535, Business Expenses, Chapter 12 (Qualified Business Income Deduction). https://www.irs.gov/pub/irs-pdf/p535.pdf ↩