This Form 8990 guide explains the IRS Limitation on Business Interest Expense Under Section 163(j). Form 8990 calculates and reports the limitation on business interest expense under the applicable rules. Interest expense, business interest income, adjusted taxable income and pass-through items can have different roles. Eligibility for an exception or election must be established rather than assumed from business size alone.
Reviewed October 31, 2026. This is an independent guide. The version and availability information below identifies the IRS documents used for this page.
What Form 8990 does and who prepares it
A taxpayer uses the form when the business interest expense limitation reporting rules require it.
For the connected reporting route, see Form 1065. Keep the role of that document separate from the task explained on this page.
| Official form | Form 8990 |
|---|---|
| IRS title | Limitation on Business Interest Expense Under Section 163(j) |
| Guide period | the applicable reporting period |
| Target version | Dec 2025 |
| Availability | Current IRS catalog PDF |
| Last checked | October 31, 2026 |
Get the Form 8990 PDF and check its status
Use the IRS source to confirm the document before completing a real filing. The download link is a reference to the official file; it is not a statement that every copy inside the PDF may be printed and submitted. Follow any instructions about electronic filing, scannable copies, recipient copies or attachments.
Which version of Form 8990 should you use?
This form follows a revision or continuing-use format rather than a new title for every calendar year. Check the revision printed on the document and the period requested inside it. A revision date, transaction date and tax year are different pieces of information. The current document should be read with the instructions that apply to the actual transaction or return.
Records to gather for Form 8990
- Business interest records.
- Adjusted taxable income workpapers.
- Gross receipts and aggregation information.
- Pass-through statements.
- Prior disallowed interest carryforwards.
Keep a working reconciliation with these records. It should show the source of each reported item, any correction made before filing and the reason a different amount appears on a connected form. This is especially useful when a statement is corrected or a prior-year balance continues into the current calculation.
How to work through Form 8990
- Confirm applicability. Start with the purpose, filer category and version of the form. Complete any eligibility or applicability question before spending time on the numerical calculation.
- Prepare the source workpapers. Gather the records listed below and reconcile their totals. Keep prior-year balances, current-year transactions and estimated payments separate where they serve different purposes.
- Complete dependent calculations first. When a line refers to another form, schedule or worksheet, finish that supporting calculation first. Preserve any classification, limitation and carryforward information.
- Follow the line sequence. Use the actual line labels and arithmetic in the applicable form. A line number from an older version may refer to something different after a revision.
- Reconcile the filing package. Check names, identifying numbers, tax periods, totals and required attachments. Then use the filing method, signature process and deadline that apply to this filer and form.
Form-specific IRS instructions and reporting details
The following points retain the operative wording of the IRS documents linked above. Read each point with its stated conditions and the applicable form version. References to another form or section describe a connected requirement; they do not mean that every reader must file every referenced document.
What’s New Changes to adjusted taxable income (ATI) and business interest limitations. P.L. 119-21, commonly known as the One Big Beautiful Bill Act, amended section 163(j) to allow an add-back to taxable income for any deduction allowable for depreciation, amortization, or depletion to determine ATI for tax years beginning after 2024. Form 8990, line 11 has been revised to reinstate the deduction allowable for depreciation, amortization, or depletion attributable to a trade or business as an adjustment to tentative taxable income for purposes of computing ATI. See the instructions for Line 11, later.
For tax years beginning after 2025, limitations on business interest will generally include capitalized interest except for interest capitalized under sections 263(g) and 263A(f). Also, ATI will exclude U.S. shareholder inclusions from controlled foreign corporations (CFCs). Floor plan financing interest expense. For tax years beginning after 2024, P.L. 119-21 also expanded the definition of floor plan financing interest expense to include any trailer or camper, which is designed to provide temporary living quarters for recreational, camping, or seasonal use, and is designed to be towed by or affixed to a motor vehicle.
Additional reporting conditions
A taxpayer (including, for example, an individual, corporation, partnership, S corporation) with business interest expense; a disallowed business interest expense carryforward; or current year or prior year excess business interest expense must generally file Form 8990, unless an exclusion from filing applies. A pass-through entity allocating excess taxable income or excess business interest income to its owners must file Form 8990, regardless of whether it has any interest expense. A regulated investment company that pays section 163(j) interest dividends (see Regulations sections 1.163(j)-1(b)(22)(iii)(F) and 1.163(j)-1(b)(35)) must file Form 8990.
A taxpayer that is a U.S. shareholder of an applicable controlled foreign corporation (CFC) that has business interest expense, disallowed business interest expense carryforward, or is part of a CFC group, must generally apply section 163(j) to the applicable CFC and attach a Form 8990 with each Form 5471. See Regulations section 1.163(j)-7(b). For a CFC group, an additional Form 8990 must be filed for the CFC group to report the combined limitations attributable to a trade or business of all CFC group members. See Specified Group Parent, later.
If a safe-harbor election is made for a CFC group, Form 8990 does not need to be filed for each CFC group member, but Form 8990 must be filed for the CFC group.
Calculations and supporting information
Exclusions from filing. A taxpayer is not required to file Form 8990 if the taxpayer is a small business taxpayer and does not have excess business interest expense from a partnership. A taxpayer is also not required to file Form 8990 if it only has interest expense from one or more of these excepted trades or businesses: • The trade or business of providing services as an employee, • An electing real property trade or business, • An electing farming business, or • Certain regulated utility businesses.
If a pass-through entity is not required to file Form 8990 because it is a small business taxpayer, but a partner or shareholder is required to file Form 8990, the pass-through entity is required, upon request by the partner or shareholder, to provide certain information so that the partner or shareholder can complete their return. See Ownership of pass-through entities not subject to the section 163(j) limitation, later.
Complete Part I to determine your allowable business interest expense deduction. If you are a taxpayer that owns an interest in a partnership subject to the section 163(j) limitation, see the If you are a taxpayer that is a shareholder in an S corporation subject to the section 163(j) limitation, see the If you are a regulated investment company that paid section 163(j) interest dividends and that has no business interest expense for the tax year, complete only Sections I and III. Prepare the form in U.S. dollars.
Exceptions and related reporting
A U.S. shareholder of an applicable CFC should include an amount equal to the sum of any specified deemed inclusions that were included in the computation of the taxpayer’s tentative taxable income, reduced by the portion of the deduction allowed under section 250(a) by reason of the specified deemed inclusions. See Regulations section 1.163(j)-1(b)(1)(ii)(G). Separately list each reduction by stand-alone applicable CFC or CFC group member. Also include any other reductions described in published guidance. If none, leave blank.
A C corporation should include investment expenses from a pass-through entity and other tax items of a partnership that are neither properly allocable to a trade or business of the partnership nor described in section 163(d) and that are allocated to a C corporation partner as separately stated items as other reductions. See C corporation business interest expense and income, earlier. Line 22. Adjusted taxable income (ATI). If line 22 is zero or less, enter zero. However, CFC group members should follow instructions below. CFC group members.
If a CFC group member has a negative amount of ATI, the CFC group member should report the negative amount on line 22. See Regulations section 1.163(j)-7(c)(2)(i).
Further form details
Part II is completed by a partnership that is subject to section 163(j) and is required to file Form 8990. The partnership items are allocated to the partners and are not carried forward by the partnership. See the Instructions for Form 1065 for how the partnership reports the excess business interest expense, excess taxable income, and excess business interest income to the partners. See Ownership of pass-through entities not subject to the section 163(j) limitation, earlier.
The Regulations provide guidance regarding how a partnership subject to the section 163(j) limitation must allocate its deductible business interest expense and section 163(j) excess items, if any, among its partners. The Regulations provide that deductible business interest expense and section 163(j) excess items must be allocated in accordance with the 11-step computation shown in Worksheets A and B. See Regulations section 1.163(j)-6(f). The partnership should use Worksheets A and B in these instructions and is responsible for keeping records that compute the allocation.
Partnerships that allocate all section 163(j) items in step 2 proportionately do not need to use Worksheets A and B.
Reading the lines and boxes
These selected labels come from the linked target PDF. They are a reading aid, not a replacement for the full line instructions or a completed calculation. Match the label and document version before transferring any amount.
| Line or box | Label in the source form | What to check |
|---|---|---|
| A | If Form 8990 relates to an information return for a foreign entity (for example, Form 5471), enter: | Check the applicable line instructions and keep the source workpaper with the return records. Transfer only the information that matches the field and reporting period. |
| B | Is the foreign entity a CFC group member? See instructions | Check the applicable line instructions and keep the source workpaper with the return records. Transfer only the information that matches the field and reporting period. |
| C | Is this Form 8990 filed by the specified group parent for an entire CFC group? See instructions | Check the applicable line instructions and keep the source workpaper with the return records. Transfer only the information that matches the field and reporting period. |
| D | Has a CFC or a CFC group made a safe harbor election? If yes, see instructions for which lines of Form 8990 | Check the applicable line instructions and keep the source workpaper with the return records. Transfer only the information that matches the field and reporting period. |
| 1 | Current year business interest expense (not including floor plan financing interest | Use the date or tax period requested by this particular field. A payment date, acquisition date and return year can describe different facts. |
Further selected fields
| Line or box | Label in the source form | What to check |
|---|---|---|
| 2 | Disallowed business interest expense carryforwards from prior years. (Does not | Use the date or tax period requested by this particular field. A payment date, acquisition date and return year can describe different facts. |
| 3 | Partner’s excess business interest expense treated as paid or accrued in current | Reconcile the relevant payment or withholding record with the tax period and category requested here. A reported payment is not necessarily the final tax liability. |
| 4 | Floor plan financing interest expense. See instructions | Check the applicable line instructions and keep the source workpaper with the return records. Transfer only the information that matches the field and reporting period. |
| 5 | Total business interest expense. Add lines 1 through 4 | Follow the stated arithmetic and line references in sequence. Complete the referenced inputs first and retain the worksheet supporting the result. |
| 6 | Tentative taxable income. See instructions | Identify the income or transaction category before entering a total. Preserve the distinction between gross amounts, adjustments and the resulting taxable or reportable figure. |
A practical example
A business has interest expense and a prior disallowed amount. The preparer reviews applicability and exceptions, calculates the current limitation and records the supported deduction and carryforward under the relevant entity rules.
This example illustrates the order of the review. It does not assume an unverified deduction, exemption, treaty rate or final tax amount. The applicable form instructions and the actual records determine the result.
Common mistakes to avoid with Form 8990
- Check the applicable exception and aggregation rules.
- Do not lose previously disallowed business interest.
- Distinguish entity-level limitations from partner or shareholder treatment where relevant.
Questions about Form 8990
Does receiving or downloading this form mean I must file it?
A taxpayer uses the form when the business interest expense limitation reporting rules require it. The form purpose and the applicable filing or furnishing conditions determine the action. Downloading a blank PDF does not itself create a filing obligation or establish eligibility for a tax benefit.
Is the revision date always the same as the tax year?
No. Some forms show a tax year, while continuing-use forms show a revision date and ask separately for the reporting period. Check the actual document and instructions. Do not relabel a payment or transaction solely because it was reported in a later calendar year.
What should I do if the underlying information is wrong?
Check the applicable exception and aggregation rules. Keep the original record and the correction trail. The issuer correction process, an amended return and an updated certificate can be different procedures. Choose the process that matches the document and the actual error.
Which records should I keep with the completed form?
Retain the source documents, applicable worksheets, submitted version and filing or furnishing confirmations. For this form, the working file should include business interest records, adjusted taxable income workpapers, gross receipts and aggregation information. Keep continuing balances and prior-year support for as long as they remain relevant under the applicable recordkeeping rules.
Related forms and next steps
Use these guides when the connected issue applies to your records. Each page has its own purpose, reporting year and availability status.