How do I get TurboTax to give me the 199-A deduction from income for my LLC on form 1065? According to the regulation, I qualify, but it does not seem to be automatic.

[doakroberta]

I qualify according to the regulations with regard to all the limitations listed. 

[JulieCo · Accepted solution]

The Section 199A deduction is an individual income tax deduction, therefore it will NOT be reflected on your Form 1065.  When the K-1(s) are generated for your 1065 form, there should be amounts reported in Box 20 with codes in the range of Z to AD.  See the screenshot of the Box 20 code values.  These are the 199A codes that will be used in your personal income tax return to calculate the 199A deduction (also known as the qualified business income deduction or QBI.)   The 199A deduction is reported on line 9 of your 1040 form.

Please note that the 199A deduction has several parts and more than one personal taxable income level threshold. Therefore, it will not be common for the 199A deduction to be 20% of your qualified business income.  For example, for taxable income under the first threshold of $157,000 single or $315,000 joint, the QBI deduction is calculated at EITHER 20% of your qualified business income (less self employment taxes, health insurance or retirement - see definition below) OR 20% of your taxable income less capital gains/dividends, whichever is LESS. 

Here is more information on the Qualified Business Income Deduction (or 199A deduction):

https://ttlc.intuit.com/replies/7019998

[CDC7]

Is there any place that shows the line by line input instructions for the 199A deduction in turbotax? the 2019 K-1 looks a little different from last year.  Are there screen shots or an example that I can view someplace?  Thanks!

[ThomasM125]

You just need to click box 20 for your form 1065 K-1 entries and you will see this screen, choose code "Z" and enter your QBI amount.

[TerryA]

For the record, the "Amount" field for Code Z doesn't do anything and there isn't any $$ to enter there anyway.

You will be prompted to enter the Schedule A information that came with your K-1 after you make that Code Z entry.

[CDC7]

Thank you, this is very helpful!!!

The K-1, did not provide codes, but rather "199A Income", "199A W-2 Wages", "199A Unadjusted Basis".... I assume those are Codes Z, AA, AB (in order).  It also shows "Gross 199A Income" and "Allocable Charitable Contributions".  Are all of these numbers required? and can you show where they are to be input?

[TerryA]

The only "Section 199A" Code is Z in Box 20. Don't enter any $$ (well, you can but that's a waste of time since it doesn't do anything).

That "Z" triggers the 199A entry screens later on (several screens after the Box 20 screen) for Statement A data entry. When you get there check the boxes for the type(s) of 199A information on your Statement A and you will get entry fields for that "type".

[Triman]

Box 20-Z does NOT work in Home and Business version, CD version, 2019 yr.   I had 2 TT reps on the phone today for 1.5 hours and still did not get a solution.  Entering data into that box generates an error code that shows during Review.

LS