IRS Instruction 8992 – U.S. shareholders of controlled foreign corporations (CFCs) must calculate and report Global Intangible Low-Taxed Income (GILTI) under IRC Section 951A. The IRS provides clear guidance in Instructions for Form 8992 (Rev. December 2024), the official resource for computing your GILTI inclusion amount.
This comprehensive guide summarizes the latest IRS instructions, walks you through every part of the form and schedules, highlights filing requirements, and notes major legislative changes effective for tax years beginning after December 31, 2025.
Download the official instructions here: IRS Instructions for Form 8992 (PDF).
What Is GILTI and Why Does Form 8992 Matter?
GILTI (Global Intangible Low-Taxed Income) taxes U.S. shareholders on certain foreign earnings that exceed a routine return on tangible assets. Enacted by the 2017 Tax Cuts and Jobs Act, it prevents profit shifting to low-tax jurisdictions.
Form 8992 calculates your GILTI inclusion amount and allocates it among your CFCs. You attach it (and Schedule A) to your income tax return. Consolidated groups also use Schedule B.
The form pulls data primarily from Schedule I-1 (Form 5471) filed for each CFC.
Who Must File Form 8992?
You must file if you are a U.S. shareholder (a U.S. person owning ≥10% of the voting power or value of a foreign corporation) of at least one CFC during any day of the CFC’s tax year that ends with or within your tax year.
Required filers include:
- Individuals, corporations, trusts, and estates
- Members of U.S. consolidated groups (each member completes a separate Form 8992; the group files one consolidated Form 8992 + Schedule B)
- S corporations that elected entity treatment under proposed regulations
Exceptions:
- Domestic partnerships no longer file Form 8992 or Schedule A. They report on Schedule K-2 and K-3 (Form 1065), Part VI.
- If your aggregate pro rata share of tested income does not exceed tested losses, you may not need to complete Part II.
When to file: Attach to your timely filed (including extensions) income tax return or Form 1120-S.
Key Updates in the December 2024 Instructions
The IRS revised the instructions in December 2024 (posted January 2025) with clarifying language for consolidated groups on Schedule B, Part I and Part II. The form and Schedule A/B remain dated December 2022. No major computational changes appear in the 2024 instructions, but significant legislative updates take effect for tax years beginning after December 31, 2025 (see section below).
Step-by-Step: How to Complete Form 8992
Part I – Net CFC Tested Income
- Line 1 → Aggregate pro rata share of tested income (from Schedule A, column (e) or Schedule B).
- Line 2 → Aggregate pro rata share of tested loss (from Schedule A, column (f) or Schedule B).
- Line 3 → Subtract line 2 from line 1.
→ If zero or negative → Stop. No GILTI inclusion.
Key definitions (from each CFC’s Schedule I-1, Form 5471):
- Tested income → Line 6 of Schedule I-1 (positive).
- Tested loss → Line 6 of Schedule I-1 (negative).
Part II – GILTI Inclusion Amount
- Line 1 → Deemed tangible income return = 10% of aggregate pro rata share of QBAI.
- Line 2 → Net tested interest expense = tested interest expense minus tested interest income.
- Line 4 → Net tested income after adjustments (for consolidated groups, additional specified interest expense lines apply).
- Line 5 → GILTI inclusion amount = Line 4 minus Line 1 (before section 250 deduction).
Report the final inclusion on:
- Form 1120, Schedule C, line 17 (corporations)
- Schedule 1 (Form 1040), line 8o (individuals)
- Form 1120-S, Schedule K, line 10 (code E) for S corporations
Section 250 deduction → Claim on Form 8993. Corporate shareholders generally get a 50% deduction (37.5% for individuals); this changes in 2026.
Schedule A – CFC Information (Non-Consolidated Filers)
Complete one line per CFC (use continuation sheets if needed). Columns include:
- (a) CFC name
- (b) EIN or reference ID (must match Form 5471)
- (c)–(d) Tested income/loss
- (e)–(f) Your pro rata share of tested income/loss
- (g) Pro rata share of QBAI (tested-income CFCs only)
- (h) Tested-loss QBAI (10% of hypothetical QBAI)
- (i)–(j) Pro rata share of tested interest income/expense
- (k) GILTI allocation ratio (your pro rata tested income ÷ total pro rata tested income, to 4 decimal places)
- (l) GILTI allocated to this CFC (ratio × Form 8992 Part II, line 5)
Totals on line 1 feed directly into Form 8992 Part I.
Schedule B – Consolidated Groups Only
Part I lists every CFC owned by any group member (repeat CFCs if owned by multiple members; avoid double-counting in totals).
Part II allocates consolidated amounts to each U.S. shareholder member.
The group files one consolidated Form 8992 + Schedule B with the consolidated return. Each member keeps its own Form 8992 for records.
Reporting GILTI on Your Tax Return & Foreign Tax Credits
Include the GILTI amount in gross income. Corporate shareholders (and individuals making a section 962 election) may claim foreign tax credits on Form 1118 (with a 20% haircut on deemed-paid taxes—reduced to 10% starting 2026).
Individuals generally claim credits on Form 1116.
Penalties for Non-Compliance
Failure to file Form 8992 (or provide required information) can trigger:
- Section 6038(b) penalties ($10,000+ per form, with continuation penalties)
- Section 6038(c) reduction in foreign tax credits
Always file accurately and on time.
Common Pitfalls & Pro Tips
- Missing Schedule I-1 data → You must still report the required amounts even if another filer submitted Form 5471.
- Incorrect reference IDs → Must exactly match Form 5471; do not use “APPLIED FOR” or “FOREIGNUS”.
- Tested-loss CFCs → QBAI column stays blank; use the 10% hypothetical amount for loss QBAI.
- Consolidated groups → Complete individual worksheets first, then aggregate.
- Domestic partnerships → Use K-2/K-3 instead of Form 8992.
Tip: Use tax software or a cross-border CPA. GILTI calculations are complex and interact with Subpart F, foreign tax credits, and section 250.
Major 2026 Changes: GILTI Becomes Net CFC Tested Income (NCTI)
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, makes permanent changes effective for tax years beginning after December 31, 2025:
- Renames GILTI → Net CFC Tested Income (NCTI)
- Eliminates the QBAI exclusion (no more 10% routine return on tangible assets)
- Reduces the section 250 deduction to 40% → effective corporate rate rises to ~12.6%
- Increases foreign tax credit availability to 90% (haircut reduced from 20% to 10%)
- Limits allocation of certain interest and R&D expenses to the NCTI basket
Form 8992 will likely receive updates in future revisions to reflect NCTI terminology and the new calculation (no QBAI step). High-tax exceptions and other planning tools remain available.
Resources & Next Steps
- Official IRS page: About Form 8992
- Form 8992 (Dec 2022) and Schedules A & B
- Form 5471 & Schedule I-1 instructions
- Form 8993 for section 250 deduction
- IRS Notice 2025-75 and related OBBBA guidance (for 2026 planning)
Important: Tax laws are complex and change frequently. This article is for informational purposes only and is not tax advice. Consult a qualified tax professional familiar with international reporting for your specific situation.
Stay compliant and minimize your GILTI (or future NCTI) exposure with proper planning. Bookmark the official IRS PDF and review it every year—your foreign business structure may require adjustments in 2026 and beyond.
Last updated: February 2026, based on IRS Instructions for Form 8992 (Rev. December 2024) and OBBBA provisions.