If you own a controlled foreign corporation, Form 8992 is the worksheet that turns the rules into a dollar amount on your return. It is where your GILTI, now Net CFC Tested Income (NCTI), inclusion is actually computed, and the 2026 changes from the One Big Beautiful Bill Act change the math in a way that matters for every CFC owner. This guide walks through who files it, the step-by-step calculation, what OBBBA changed, and how the form connects to the rest of your international filings.
What Is Form 8992?
Form 8992 is the form a U.S. shareholder uses to calculate their GILTI/NCTI inclusion for the year. It does not introduce a new tax; it aggregates the pieces. Each of your controlled foreign corporations produces a tested-income or tested-loss figure (computed on Form 5471, Schedule I-1), and Form 8992 combines them across all of your CFCs to arrive at the single amount that flows to your return.
Who Has to File Form 8992?
Any U.S. shareholder of one or more CFCs with net tested income generally must file Form 8992 with their annual return. That includes individuals, domestic corporations, and trusts or estates that are 10%-or-more owners. A shareholder with only tested losses may have no inclusion for the year but still accounts for the figures.
Partnerships and S Corporations: The Aggregate Approach
ImportantUnder the final GILTI regulations, a domestic partnership or S corporation is treated as an aggregate (not as an entity) for NCTI purposes. That means the inclusion is computed at the partner or shareholder level, not at the partnership level. If you receive a Schedule K-1 reflecting an interest in a CFC held through a partnership, you may be the one who actually files Form 8992 and reports the inclusion. This is a frequent point of confusion and a common source of missed filings.
How Is the GILTI / NCTI Inclusion Calculated?
The calculation aggregates your CFCs and then, historically, subtracted a return on tangible assets. For 2026 and later, that subtraction is gone, which is the single most important mechanical change.
The Form 8992 Calculation, Step by Step
- List each CFC and your pro rata share of its tested income or tested loss (from each Form 5471, Schedule I-1).
- Net them into net CFC tested income (positive tested income reduced by tested losses).
- Subtract the net deemed tangible income return (DTIR). Through 2025 this equaled 10% of your QBAI (qualified business asset investment) reduced by certain tested interest expense. For tax years beginning after December 31, 2025, OBBBA eliminated this step, so it is zero.
- The result is your GILTI/NCTI inclusion, which flows to your return.
- Separately, compute the Section 250 deduction (40% for 2026) on Form 8993, and claim the foreign tax credit on Form 1118 or 1116.
What the QBAI Repeal Does to Your Form 8992
2026 UpdateUnder the old GILTI rules, a capital-intensive CFC with significant tangible assets generated a large QBAI, and 10% of that amount was excluded from the inclusion on Form 8992. Beginning with the 2026 tax year, that exclusion is repealed: the QBAI line no longer reduces your base, so your inclusion equals your full net CFC tested income.
- Capital-heavy CFCs (manufacturing, equipment, real estate operating companies) see a larger inclusion because the shelter is gone.
- Asset-light CFCs (services, software, consulting) are barely affected because they had little QBAI to begin with.
This is why modeling the 2026 inclusion before year-end, and confirming the Section 962 election and high-tax exclusion choices, matters more than ever.
How Does Form 8992 Connect to the Other International Forms?
Form 8992 sits in the middle of a chain of forms. Getting the sequence right is what makes the numbers tie out across your return.
The full chain works like this:
- Form 5471 (Schedule I-1) reports each CFC's tested income and the foreign taxes attributable to it.
- Form 8992 aggregates those into your net inclusion.
- Form 8993 applies the 40% Section 250 deduction.
- Form 1118 (corporations) or Form 1116 (individuals electing under Section 962) claims the deemed-paid foreign tax credit, now 90% of foreign taxes.
Because Subpart F income is excluded from tested income, your Subpart F and NCTI calculations must be coordinated so the same dollar is never counted twice.
How Do Individuals Reduce the Form 8992 Result?
For an individual, the inclusion on Form 8992 is taxed at ordinary rates with no Section 250 deduction and no foreign tax credit unless a Section 962 election is made. That election is usually the difference between a punitive bill and a manageable one.
With a Section 962 election, the individual is taxed on the Form 8992 inclusion as if a domestic C corporation: the 21% corporate rate applies, the 40% Section 250 deduction is available, and the 90% deemed-paid foreign tax credit offsets the CFC's foreign taxes, often driving the residual U.S. tax to zero for CFCs in normal-tax countries. The trade-off is that previously taxed income is taxed again as a dividend when later distributed, above the U.S. tax already paid. The election should be re-run every year because foreign tax rates and earnings change.
Bottom Line
Form 8992 is the engine that converts the GILTI/NCTI rules into a number on your return, and the 2026 elimination of the QBAI tangible-asset return means that number is now larger for capital-intensive CFCs. Filing it correctly requires clean Form 5471 tested-income figures, careful coordination with Form 8993 and the foreign tax credit, and, for individuals, a Section 962 election in most cases. Done right, the combination of the 40% deduction and the 90% credit keeps the current U.S. cost low; done wrong, individuals overpay at ordinary rates.
If you own one or more controlled foreign corporations and need your NCTI inclusion computed and optimized under the new rules, our international tax and cross-border tax teams prepare Forms 8992, 8993, and 5471 together so everything reconciles. Have questions about Form 8992 or your GILTI calculation? Contact TS CPA for a free consultation. We respond within the same day.