Who Must File

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.

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,

Computation of section 163(j) limitation. If section 163(j) applies to you, the business interest expense deduction allowed for the tax year is limited to the sum of:

• 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.

1. Business interest income,
2. Applicable percentage of the adjusted taxable

income (ATI), and

3. Floor plan financing interest expense.

Carryforward of disallowed business interest. The amount of any business interest expense that is not allowed as a deduction under section 163(j) for the tax

Instructions for Form 8990 (Rev. 12-2025) Catalog Number 71420E Jan 21, 2026 Department of the Treasury Internal Revenue Service www.irs.gov