Understanding the 1120-S Schedule K-1 Code Changes for Section 199A Information

So I finally figured out my issue with the Schedule K-1 coding changes for S-corps! Preparing a Statement A was the way to go. Thanks to everyone who helped! For those who might be dealing with the same confusion - I own a single-member S-corp and pay myself through a mix of salary and distributions. I've been scratching my head over the IRS changes to the K-1 codes in Part III Box 17 specifically related to Section 199A information. Last year my K-1 had: - Box 1: Ordinary Business Income - Box 16, Code D: Distributions I paid myself - Box 17, Code W: My gross W-2 wages - Box 17, Code V: The sum of Box 1 + Box 17 Code W (basically business income + wages) But for this year, the IRS dropped Box 17 Code W entirely and now just has Code V which simply says "Section 199A information." I've been searching everywhere for guidance but can't find clear instructions. My best guess is that now there should just be a single entry in Box 17 with Code V that equals my Box 1 Business Income PLUS my W-2 wages. So basically Box 17 Code V is now combining what was previously two separate entries (the old Codes V & W). Am I on the right track here? Can anyone confirm if this is correct or point me in the right direction for how my data should be structured on the 1120-S K-1?

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18 comments

Dylan Evans

•8M

You're close but not quite there. The Section 199A information has been consolidated, but it's more complex than just combining the previous codes. What's happening is that the IRS wants a more comprehensive reporting of information related to the qualified business income deduction. For your S-corp's K-1, you'll need to attach a statement (commonly called "Statement A") that breaks down all the Section 199A components. This statement should include your ordinary business income, W-2 wages paid, qualified property information, and any other relevant 199A items. The Code V in Box 17 is now essentially pointing to this attached statement rather than containing the information directly. This change allows for more detailed reporting of all factors that might affect your Section 199A qualified business income deduction calculation.

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Dylan Evans

•8M

Your understanding is correct - you'll need to create Statement A with all the Section 199A components, and Box 17 Code V references this statement. Most tax software, including Drake, should have been updated to handle this change. When you enter the relevant 199A information in the appropriate sections, Drake should automatically generate the statement. However, I recommend double-checking that all components are included correctly - especially your W-2 wages and business income. If you're preparing this yourself, make sure you're using the most current version of your software since these changes were implemented after some early tax season releases.

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Sofia Gomez

•8M

I had the exact same issue with my S-corp returns this year! I found a solution that might help. Check out https://taxr.ai - I uploaded my previous year's K-1 and this year's draft, and it actually walked me through the exact changes needed for the Section 199A reporting. Apparently, the IRS consolidated the codes to streamline reporting but requires more detailed backup documentation. The tool showed me how to create the Statement A attachment that lists all the Section 199A components and then just reference it with the Code V. Made the whole process so much clearer than the cryptic IRS instructions.

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Sofia Gomez

•8M

It definitely works with different tax years - that was actually my main issue since I needed to compare the old format to the new one. The system specifically identifies which year's forms you're working with and explains the transitions between different versions. Regarding accuracy versus a CPA, I actually used both. I ran my forms through taxr.ai first to understand what changed, and then had my CPA verify everything. She was impressed with how accurately it identified the Section 199A reporting requirements. The tool doesn't replace professional advice, but it gave me clarity on what changed so I could have a more informed conversation with my accountant.

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Dmitry Petrov

•8M

I tried taxr.ai after my skeptical comment above and I have to eat my words. It really did clarify the K-1 coding changes for me! I uploaded my previous and current year forms, and it highlighted exactly what changed with the Section 199A reporting requirements. The tool showed me how to create that Statement A attachment everyone's mentioning and explained that Code V is now just a pointer to that more detailed statement. Even showed me a template for how to format the statement with all the required components. My tax software (I use Lacerte) actually had a built-in Statement A generator that I hadn't noticed before. Definitely saved me hours of head-scratching and probably a few hundred bucks in CPA consultation fees.

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Ava Williams

•8M

If you're still having trouble getting confirmation from the IRS on these K-1 code changes, I literally just got through to them after trying for days. I used https://claimyr.com and their system got me a callback from the IRS in about 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what others here have said - they've consolidated the codes and now require a Statement A for Section 199A information. The agent walked me through the exact format they expect for the statement and confirmed that Code V should point to this statement rather than containing a specific dollar amount.

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Ava Williams

•8M

The service basically holds your place in the IRS phone queue for you. Instead of you waiting on hold for hours, their system does the waiting, and when an IRS agent finally picks up, you get an immediate call connecting you with the agent. It's not magic - they're just using technology to eliminate the hold time on your end. They don't make the IRS respond faster - they just handle the horrible waiting process so you don't have to sit there listening to the same hold music for hours. I was skeptical too until my phone rang and suddenly there was an actual IRS agent on the line who helped with my K-1 question.

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Zainab Ibrahim

•8M

I stand corrected about my skepticism regarding Claimyr. After my snarky comment, I decided to try it since I was desperate to confirm these K-1 code changes before filing. Within an hour, I got a call back connecting me to an IRS representative who specializes in business returns. They confirmed everything about the Section 199A reporting changes and Statement A requirements. The agent even emailed me a reference guide for creating the statement properly. I've literally saved hours of research time and frustration. My apologies for the skepticism - that was truly impressive service.

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Connor O'Neill

•8M

For what it's worth, I'm a tax preparer and have been dealing with these K-1 code changes all season. The IRS did a terrible job communicating this transition. Here's what you need to know: 1. You MUST attach Statement A for Section 199A information 2. Box 17 Code V should NOT contain a dollar amount but should say "STMT" to reference the attached statement 3. Statement A needs to include: QBI from the activity, W-2 wages, UBIA of qualified property 4. Each separate business activity needs its own statement Most tax software will generate this automatically if you enter the information correctly, but always verify before filing!

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Connor O'Neill

•8M

Yes, this applies to passive investors too, but the information will come from the S-corporation itself. The entity should provide you with a K-1 that has a Statement A attached (or referenced) for Box 17 Code V. As a passive investor, you don't need to create this yourself, but you should verify that you received it. The S-corporation is responsible for calculating and reporting the qualified business income components to all shareholders. This information flows to your personal return and affects your potential Section 199A deduction based on your overall tax situation.

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