By AIM Financial | Serving Grand Rapids, Kentwood, Wyoming, Middleville, and West Michigan

What Is IRS Form 8992?

IRS Form 8992 is used by certain U.S. shareholders to calculate income that must be reported because they own shares in a controlled foreign corporation (CFC). For tax years beginning before 2026, this calculation is commonly known as Global Intangible Low-Taxed Income, or GILTI.

For tax years beginning after December 31, 2025, federal legislation renamed GILTI Net CFC Tested Income (NCTI) and changed parts of the calculation. This means the applicable terminology and rules depend on the tax year being filed.

Although Form 8992 is not a routine form for most individuals or small businesses, it can be important for U.S. citizens, residents, and corporations with ownership interests in foreign companies. Understanding the requirements can help taxpayers identify international tax reporting obligations before filing their federal income tax returns.

Who May Need to File Form 8992?

Generally, Form 8992 may be required when a U.S. shareholder owns qualifying stock in a controlled foreign corporation during the relevant tax year.

A controlled foreign corporation is generally a foreign corporation in which U.S. shareholders collectively own more than 50% of the total voting power or stock value, applying the applicable ownership attribution rules. For these purposes, a U.S. shareholder generally means a U.S. person who owns at least 10% of the foreign corporation’s voting power or value under the relevant tax rules.

Potentially affected taxpayers include:

• U.S. corporations that own shares in foreign subsidiaries.
• U.S. individuals who own qualifying interests in foreign corporations.
• Certain U.S. shareholders with interests held through other entities.
• Certain members of U.S. consolidated corporate groups.

Owning a foreign investment does not automatically mean Form 8992 must be filed. The corporation’s ownership structure, the shareholder’s interest, the relevant tax year, and specific exceptions all matter.

Domestic partnerships generally report relevant information through Schedule K-2 and Schedule K-3 rather than filing Form 8992 themselves under the IRS instructions. Partners may still have individual reporting responsibilities depending on their circumstances.

What Is NCTI, Formerly Known as GILTI?

NCTI is a federal tax concept designed to address certain income earned by controlled foreign corporations and included in the income of qualifying U.S. shareholders.

Before 2026, the rules were commonly known as GILTI. For tax years beginning after 2025, legislation renamed the category Net CFC Tested Income and changed the calculation.

The updated rules removed the previous deemed return on certain tangible foreign business assets from the calculation. They also changed the deduction available to eligible domestic corporations under Section 250.

For tax years beginning after December 31, 2025, the Section 250 deduction for NCTI is generally 40% for eligible domestic corporations, subject to the statutory limitations and applicable rules. This is different from the general 50% deduction that applied to GILTI for tax years beginning before 2026.

The rules for foreign tax credits and other international tax provisions also matter. A corporation’s actual U.S. tax liability depends on its circumstances, so taxpayers should not assume that the NCTI inclusion automatically equals the final additional tax owed.

How Does Form 8992 Work?

Form 8992 organizes the information needed to calculate the relevant income inclusion. The process generally involves the following steps:

1. Identify the foreign corporations. Determine which foreign companies qualify as controlled foreign corporations under the applicable ownership rules.
2. Review shareholder ownership. Establish the taxpayer’s qualifying ownership and share of the relevant income.
3. Gather foreign financial information. Obtain the records needed to determine tested income, tested losses, and other required amounts.
4. Calculate the income inclusion. Apply the rules for the applicable tax year, including the changes that apply to NCTI for tax years beginning after 2025.
5. Complete the applicable schedule. Schedule A generally provides information for individual controlled foreign corporations. Schedule B is used for specified members of U.S. consolidated groups.
6. Transfer the result to the tax return. Report the resulting amount on the appropriate federal return and complete any related forms that apply.

These steps are simplified for educational purposes. Form 8992 calculations may require detailed financial information, ownership analysis, and coordination with other international tax forms.

What Other Tax Forms May Be Related?

Form 8992 may be part of a broader international tax filing process. Depending on the taxpayer’s situation, related forms can include:

• Form 8993: Used to calculate the applicable Section 250 deduction. Its title and terminology are changing to reflect the new NCTI rules.
• Form 5471: Used by certain U.S. persons to report information about foreign corporations.
• Form 1118: Used by eligible domestic corporations to calculate foreign tax credits.
• Form 1040: The individual federal income tax return that may include relevant income for an individual shareholder.
• Form 1120: The federal income tax return generally filed by C corporations.

Not every taxpayer will need every form. Filing requirements depend on the type of taxpayer, ownership structure, transactions, and applicable tax law.

Common Form 8992 Mistakes to Avoid

International tax reporting can be complicated, and several mistakes may lead to inaccurate filings.

Overlooking foreign ownership rules: A taxpayer may have reporting obligations even when ownership is indirect or involves related parties.

Using the wrong tax-year rules: The GILTI rules applicable to a tax year beginning in 2025 are not identical to the NCTI rules for a tax year beginning in 2026.

Missing related forms: Form 8992 may need to be coordinated with foreign corporation information returns, foreign tax credit calculations, and other federal schedules.

Relying on incomplete foreign records: Accurate calculations may require financial statements, ownership records, income details, and foreign tax information.

Using outdated IRS instructions: The IRS has published earlier Form 8992 instructions, while updated forms and instructions may reflect the legislative changes. Taxpayers should check the latest official IRS materials for the year being filed.

How AIM Financial Can Help With Tax Preparation

AIM Financial provides tax preparation assistance for individuals and businesses seeking help understanding their federal filing responsibilities. Taxpayers in Grand Rapids, Kentwood, Wyoming, Middleville, and throughout West Michigan can benefit from organizing their financial records and identifying tax questions early.

If you own an interest in a foreign corporation, operate a business with international investments, or are unsure whether foreign income affects your U.S. tax return, contact AIM Financial to discuss your tax preparation needs.

International tax reporting may require specialized expertise. Early review can help identify the forms and information that may be needed and determine whether additional international tax assistance is appropriate.

Contact AIM Financial for tax preparation assistance and help understanding your federal tax filing obligations.

This article is for general educational purposes only and is not individualized tax, legal, or international tax advice. Form 8992 requirements and NCTI calculations depend on the tax year, ownership structure, and current federal law. Consult the latest IRS forms and instructions or a qualified international tax professional for advice on your circumstances.