Form 8995 shows but I have no business income (W2 + 1099-MISC settlement only). What triggers it, and is it safe to file with it included?

[LindaS5247]

Form 8995 was probably triggered because depending on your entries, TurboTax has interpreted your Form 1099 Misc for your settlement as self-employment income.

You can go back to your screens for your 1099-MISC and review your entries using the steps listed below.  You may have answered something to lead the program to believe this was self-employment income. If it is just a one time settlement, it should not be classified that way. 

1. Click on Search at the top right of your TurboTax screen
2. Type "Other Income" in the search window, and hit "Enter"
3. Click on "Jump to Other Income"
4. Your screen will say Did you get a Form 1099-MISC? Answer Yes and Continue
5. Your screen will say Let's enter the income from your 1099-MISC 
6. Enter the information from your Form 1099-MISC and Continue
7. Your screen will say Describe the reason for this 1099-MISC. You can enter something like Settlement and Continue
8. On the screen with "Do one of these uncommon situations apply?", Select" None of these apply" and Continue
9. Answer "No" to "Did the XXX involve work that's like your main job?"
10. Answer "I got it in 2025 when asked "How often did you get income for XXXXX?"
11. On the screen that says Did the XXX involve an intent to earn money? Answer No and Continue.
12. Answer any follow-up screens.

 This should enter your other income on your Form 1040 line 8, through Schedule 1 line 8. It will not be reported as self-employment income.

 You should check your return to see if Form 8995 was generated. If it was, you should delete it using the steps listed below.

If you are using TurboTax Online you can delete a Form 1099-DIV as follows:

1. In your left panel of your TurboTax screen click on "Tax Tools"
2. And then Click on "Tools"
3. Click on "Delete a Form"
4. Scroll through your list of Forms
5. Click the garbage can next to "Form 8995

If you are using TurboTax Desktop, you can delete a Form 1099-DIV as follows:

1. Click on "Forms" in the upper right of your TurboTax screen to switch to "Forms Mode"
2. In your left panel scroll down and look for "Form 8995"
3. In your right panel at the bottom of Form 1099-8995, click on "Delete Form"
4. Click on "Yes" to confirm the deletion

Click here for information on Form 1099-MISC. 

Click here for "Where Do I Enter Form 1099-MISC?" 

Please return to Community if you have any additional information or questions and we would be happy to help.

[Mike9241]

did you get a 1099-Div with an amount on line 5? that qualifies for the QBI.