topic Why Calculate Qualified Business Income for SSTB? in Deductions & credits

Why Calculate Qualified Business Income for SSTB?

BillyDB — Tue, 24 Feb 2026 07:21:21 GMT

I'm working on 1120S for a SubS corp for 2021. Granted, I'm behind. Trying to understand the handling of Qualified Business Income. The return is for a health care service corp, i.e. an SSTB and recorded as such in TTax. It's my understanding that SSTBs are specifically excluded from eligibility for the deduction. Why is TTax even calculating 199A Act Wks and Statement A?

I also complete the owner's (my wife's and my) 1040. My wife is 100% shareholder in the SCorp and we have no other business income or, in our case, loss.

TTax has various calculations related to QBI in QBID in both the 1120S and the 1040. I believe this to be due at least in part to my responses to the "Step-by-Step" but possibly also one or more inappropriate form entries. Ought I not just ignore everything about the QBI and QBID?

Re: Why Calculate Qualified Business Income for SSTB?

Mike9241 — Wed, 20 Sep 2023 00:26:04 GMT

"It's my understanding that SSTBs are specifically excluded from eligibility for the deduction."

You misunderstand SSTBs can get the199A deduction but the computation is more complicated than for non SSTBs if taxable income exceeds the threshold of taxable income of $340,100. the QBI computation is done on form 8995 if your taxable income is below $340,100 otherwise form 8995-A is used. By taxable income I mean the amount before the QBI deduction

example taxable income before QBI $300K

SSTB S-Corp QBI income $250K

taxpayer gets a QBI deduction of $50K

same as above except taxable income before QBI $350K

taxpayer gets a QBI deduction of $40.59K

Re: Why Calculate Qualified Business Income for SSTB?

BillyDB — Wed, 20 Sep 2023 22:14:25 GMT

Mike, Thanks for your reply! I guess I do misunderstand and will need to look into it further. Also, need to know how to handle in case of incurred loss.

Re: Why Calculate Qualified Business Income for SSTB?

Mike9241 — Wed, 20 Sep 2023 23:25:50 GMT

you report your QBI loss. it is carried forward to offset future QBI income