Form 8992 is the return a U.S. shareholder of a controlled foreign corporation files each year to calculate the Global Intangible Low-Taxed Income (GILTI) inclusion under Section 951A and report it on their federal tax return. You attach it to your Form 1040, 1120, or 1065, pull the underlying numbers from Schedule I-1 of Form 5471 for each CFC you own, and complete Schedule A (or Schedule B if you’re in a consolidated group) to show your pro rata share of tested income and tested losses. For tax years beginning after December 31, 2025, the calculation changed in ways the form itself will reflect once the IRS reissues it, so the instructions below flag both the current mechanics and the 2026 shifts.
Who Has to File
Two conditions have to be met together. You must be a U.S. shareholder, meaning a U.S. person (individual, domestic corporation, domestic partnership, estate, or certain trusts) who owns 10% or more of the total voting power or total value of a foreign corporation’s stock, counting shares held directly and shares attributed under the constructive ownership rules.1Office of the Law Revision Counsel. 26 USC 951 – Amounts Included in Gross Income of United States Shareholders2Internal Revenue Service. IRC 958 Rules for Determining Stock Ownership
The corporation must also be a controlled foreign corporation: a foreign corporation whose U.S. shareholders together own more than 50% of the voting power or stock value on any day of its tax year.3eCFR. 26 CFR 1.957-1 – Definition of Controlled Foreign Corporation If both tests are met, you owe U.S. tax on your share of the CFC’s tested income whether or not any cash is distributed to you.
What Changed for Tax Years Beginning After December 31, 2025
The One Big Beautiful Bill Act, signed in July 2025, rewrote three pieces of the GILTI calculation. The current Form 8992 still shows the pre-2026 structure; expect a revised layout, but the underlying rules for the 2026 return are these:
- The Qualified Business Asset Investment (QBAI) offset is gone. You no longer subtract 10% of your CFCs’ tangible depreciable property from net tested income. Your full net CFC tested income becomes your GILTI inclusion.4Office of the Law Revision Counsel. 26 USC 951A – Net CFC Tested Income Included in Gross Income of United States Shareholders
- The Section 250 deduction for corporate shareholders was set permanently at 40%, producing an effective corporate rate of about 12.6% before credits. A scheduled drop to 37.5% was eliminated.5Office of the Law Revision Counsel. 26 USC 250 – Foreign-Derived Deduction Eligible Income and Net CFC Tested Income
- The deemed-paid foreign tax credit under Section 960(d) went up from 80% to 90% of tested foreign income taxes.6Office of the Law Revision Counsel. 26 USC 960 – Deemed Paid Credit for Subpart F Inclusions
Separately, Section 958(b)(4) was restored for tax years ending after December 31, 2025, which shrinks the pool of foreign corporations classified as CFCs through downward attribution. A narrower replacement rule in new Section 951B still catches certain structures. If you were pulled into GILTI only because of the 2017 downward attribution rules, check whether you’re still a U.S. shareholder of a CFC before filing.
Gather the Numbers From Form 5471 First
Everything on Form 8992 traces back to Form 5471, the information return filed for each CFC you own. Schedule I-1 of Form 5471 reports each CFC’s tested income or tested loss, along with the tangible property figures that used to feed the QBAI calculation.7Internal Revenue Service. About Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations8Internal Revenue Service. Instructions for Form 8992 (Rev. December 2024)
Tested income is the CFC’s gross income minus allocable deductions, after excluding:
- Subpart F income already taxable under those rules
- Income effectively connected with a U.S. trade or business
- Income covered by the Section 954(b)(4) high-tax exception
- Dividends received from related persons
- Foreign oil and gas extraction income
Financial data has to be translated to U.S. dollars and restated under U.S. tax accounting principles. Tangible property that supported QBAI was measured under the alternative depreciation system in Section 168(g); reporting of that information may continue on the revised form even though the number no longer reduces your inclusion.9eCFR. 26 CFR 1.951A-3 – Qualified Business Asset Investment
Working Through the Form
Once you have each CFC’s Schedule I-1 numbers, the flow through Form 8992 is straightforward.
Start with Schedule A. List every CFC in which you’re a U.S. shareholder by name and EIN or reference ID, and enter your pro rata share of each CFC’s tested income and tested loss.8Internal Revenue Service. Instructions for Form 8992 (Rev. December 2024) Your pro rata share depends on your ownership percentage and the portion of the CFC’s tax year falling within yours. Total the columns.
Carry the totals to the main body of Form 8992. Add up your pro rata share of tested income across all CFCs, then subtract your pro rata share of tested losses from CFCs that had a net loss. The result is your net CFC tested income. Under the pre-2026 form you would then have subtracted a Net Deemed Tangible Income Return equal to 10% of QBAI (less certain interest expense). For 2026 tax years, skip that step. Your GILTI inclusion equals net CFC tested income.4Office of the Law Revision Counsel. 26 USC 951A – Net CFC Tested Income Included in Gross Income of United States Shareholders
If tested losses equal or exceed tested income, your inclusion is zero. File the form anyway to document the calculation.
Members of a U.S. consolidated group use Schedule B in place of Schedule A. Schedule B allocates the group’s combined amounts across member corporations so each files a consistent share.
Reducing the Tax: Section 250, Foreign Tax Credits, and the High-Tax Exclusion
Form 8992 gives you the inclusion amount. Related forms and elections determine how much U.S. tax you actually pay on it.
Domestic C corporations deduct 40% of the GILTI inclusion (plus the Section 78 gross-up) on Form 8993, which produces the roughly 12.6% pre-credit effective rate.5Office of the Law Revision Counsel. 26 USC 250 – Foreign-Derived Deduction Eligible Income and Net CFC Tested Income10Internal Revenue Service. About Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income Corporations also claim a deemed-paid foreign tax credit under Section 960(d) equal to 90% of the tested foreign income taxes attributable to the inclusion.6Office of the Law Revision Counsel. 26 USC 960 – Deemed Paid Credit for Subpart F Inclusions GILTI credits sit in their own basket and can’t be carried to other years, so excess credits in a high-foreign-tax year are lost.
If a specific tested unit’s income was subject to a foreign effective tax rate of at least 18.9% (90% of the 21% U.S. corporate rate), you can elect the GILTI high-tax exclusion and drop that income out of tested income entirely. The election is annual, applies at the tested-unit level, and can be made on an amended return. Because excluded income never enters the GILTI formula, it avoids the 10% foreign tax credit haircut altogether.
Individual shareholders don’t get the Section 250 deduction or the Section 960 deemed-paid credit by default, so GILTI can hit them at ordinary rates up to 37%. A Section 962 election lets an individual be taxed on the GILTI inclusion as if they were a domestic corporation: 21% rate, 40% Section 250 deduction, and 90% deemed-paid credit all become available.11Government Publishing Office. 26 CFR 1.962-1 – Limitation of Tax and Rules for Electing Individuals Make the election by attaching a statement to your Form 1040 that identifies each CFC and your pro rata shares of income and foreign taxes. The catch is that later actual distributions from the CFC may be taxed again to the extent they exceed the tax already paid under the election, and you have to track previously taxed earnings carefully. If you make the election, Form 8993 and Form 1118 typically go in with your return to support the deduction and credit.
Where and When to File, and What Happens If You Don’t
Form 8992 attaches to your annual federal income tax return: Form 1040 for individuals, Form 1120 for C corporations, Form 1065 for partnerships. The due date is the return’s due date, extensions included. Electronic and paper filing are both accepted.
Skipping the form or filing it incomplete is expensive. Section 6038 imposes an initial $10,000 penalty per failure. If the IRS sends you notice and you still don’t comply within 90 days, another $10,000 accrues for each 30-day period (or fraction) the failure continues, capped at $50,000 per failure.12Government Publishing Office. 26 CFR 1.6038-5 – Information Returns Required for GILTI Purposes Continued noncompliance can also reduce your foreign tax credits. A single overlooked CFC can put $60,000 on the table before any additional tax on the underlying income is even calculated.