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Fillable Form 8903

Form 8903 is used to claim the Domestic Production Activities Deduction by small and large businesses. This deduction is intended to provide tax incentives for businesses that produce most of their goods or work in the United States rather than sending that work overseas.

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What is Form 8903?

Form 8903, Domestic Production Activities Deduction, is used by taxpayers to calculate their domestic production activities deduction (DPAD).

Normally, your domestic production activities deduction (DPAD) is 9% of the smaller of the following:

  1. The taxpayer’s qualified production activities income (QPAI)
  2. The taxpayer’s adjusted gross income for an individual, estate, trust, or taxable income for all other taxpayers calculated without the domestic production activities deduction (DPAD)

Unless a taxpayer was allocated a share of a cooperative's domestic production activities deduction (DPAD) or he or she is a member of an expanded affiliated group (EAG), he or she will not be allowed a domestic production activities deduction (DPAD) unless the taxpayer can enter on Form 8903 a positive amount for all three of the following:

  • Qualified production activities income (QPAI)
  • Adjusted gross income for an individual, estate, or trust
  • Form W-2 wages you paid to your employees. If you didn't pay any Form W-2 wages (or have Form W-2 wages allocated to you on a Schedule K-1), you can't claim a DPAD.

How to fill out Form 8903?

Taxpayers can download and print a PDF copy of Form 8903 from the Internal Revenue Service (IRS) website that they can manually complete. They can also fill out Form 8903 electronically on PDFRun.

To fill out Form 8903, you must provide the following information:

Names as shown on return

Enter your full legal name as it is shown in your tax return.

Identifying number

Enter the identifying number for this form.

Only complete column (a) if you have oil-related production activities. As for column (b), you must enter amounts for all of your activities which include oil-related production activities.

Line 1

Enter the total amount of your domestic production gross receipts (DPGR) in column (a) and column (b).

Line 2

Enter the total allocable costs of the goods you have sold in column (a) and column (b). If you are using the small business simplified overall method, skip line 2 and line 3.

Line 3

Enter any deductions and losses allocable to your domestic production gross receipts (DPGR) in column (a) and column (b).

Line 4

Enter the amount of cost of goods sold and other deductions you ratably apportioned to your domestic production gross receipts (DPGR) in column (a) and column (b). You may only fill out this line if you are using the small business simplified overall method. For other methods, skip line 4.

Line 5

Add the amounts in line 2, 3, and 4 and enter the total amount in column (a) and column (b).

Line 6

Subtract the amount in line 5 from the amount in line 1 and enter the total amount in column (a) and column (b).

Line 7

Enter the total amount of your qualified production activities income from estates, trusts, and certain partnerships and S corporations in column (a) and column (b).

Line 8

Add the amount in line 6 to the amount in line 7 in column (a) and column (b). For estates and trusts, you may proceed to line 9. As for the other types, skip line 9 and go directly to line 10.

Line 9

Enter the total amount you have allocated to beneficiaries of the estate or the trust in column (a) and column (b).

Line 10a

  • Oil-related qualified production activities income

Enter all of your oil-related qualified production activities income in column (a). For estates and trusts, subtract the amount in line 9 from the amount in line 8 in column (a). For others, enter the amount in line 8. If it amounts to zero or less, enter “-0-”.

Line 10b

  • Qualified production activities income

Enter all of your qualified production activities income in column (b). For estate and trusts, subtract the amount in line 9 from the amount in line 8 in column (b). For others, enter the amount in line 8. If it amounts to zero or less, skip lines 11 through 21 and enter “-0-” in line 22.

Line 11

  • Individuals, estates, and trusts

Enter your adjusted gross income figure without the domestic production activities reduction in column (b).

  • All others

Enter your taxable income figure without the domestic production activities deduction in column (b).

Line 12

Enter the smaller amount between the one in line 10b and line 11 in column (b). If the amount is zero or less, enter “-0-”. You may skip lines 13 through 21 and enter “-0-” in line 22.

Line 13

Multiply the amount in line 12 by 9% or 0.09 in column (b).

Line 14a

Enter the smaller amount between the one in line 10a and the one in line 12 in column (b).

Line 14b

Enter the reduction for your oil-related qualified production activities income by multiplying the amount in line 14a by 3% or 0.03 in column (a).

Line 15

Subtract the amount in line 14b from the amount in line 13 and enter the total amount in column (b).

Line 16

Enter the total amount of your wages from Form W-2, Wage and Tax Statement in column (b).

Line 17

Enter the total amount of your wages you have received from estates, trusts, and certain partnerships and S corporations which you entered in Form W-2, Wage and Tax Statement.

Line 18

Add the amount in line 16 to the amount in line 17 and enter the total amount in column (b). For estates and trusts, you may proceed to line 19. For others, you may skip line 19 and go directly to line 20.

Line 19

Enter the total amount you have allocated to beneficiaries of the estate or the trust in column (b).

Line 20

  • Estates and trusts

Subtract the amount in line 19 from the amount in line 18 and enter the total amount in column (b).

  • All others

Enter the amount from line 18 in column (b).

Line 21

Enter your Form W-2, Wage and Tax Statement limitation by multiplying the amount in line 20 by 50% or 0.50 in column (b).

Line 22

Enter the smaller amount between the one from line 15 and the one from line 21 in column (b).

Line 23

Enter the total amount of your domestic production activities deduction from your cooperatives in column (b) by using the deduction from Form 1099-PATR, Taxable Distributions Received From Cooperatives.

Line 24

Enter the total amount of your expanded affiliated group allocation in column (b).

Line 25

Enter the total amount of your domestic production activities deduction in column (b) by adding the amounts in lines 22 through 24.

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