Updated October 16, 2026. Quick answer: Box 14 of Schedule K-1 (Form 1065) shows a partner’s net earnings or loss from self-employment in code A, with gross farming or fishing income in code B and gross nonfarm income in code C. The 2025 instructions have each spouse who is a partner file their own Schedule SE, and a general partner reduces code A by certain deductions first.
Schedule C and Schedule SE (Form 1040) for 2025, read line by line: Schedule SE (Form 1040) and Schedule SE lines 1 to 4.
What box 14 reports
On the form, line 14 of Part III is labelled “Self-employment earnings (loss)”. The instructions begin with a rule for married partners: “If you and your spouse are both partners, each of you must complete and file your own Schedule SE (Form 1040), Self-Employment Tax, to report your partnership net earnings (loss) from self-employment.” This page covers the partner’s side of a K-1 you received; it does not cover how the partnership files its own return. Every other box is set out on the Schedule K-1 (Form 1065) boxes overview.
Box 14 codes A, B and C
Each code answers a different Schedule SE question. The table gives the instruction for each.
| Code | What it is, as printed | What the instructions say to do |
|---|---|---|
| A | “Net earnings (loss) from self-employment.” | “If you’re a general partner, reduce this amount before entering it on Schedule SE (Form 1040) by any section 179 expense deduction claimed, unreimbursed partnership expenses claimed, and depletion claimed on oil and gas properties.” |
| B | “Gross farming or fishing income.” | “If you’re an individual partner, enter the amount from this line, as an item of information, on Schedule E (Form 1040), line 42.” |
| C | “Gross nonfarm income.” | “If you’re an individual partner, use this amount to figure net earnings from self-employment under the nonfarm optional method on Schedule SE (Form 1040), Part II.” |
Code B has a second use. “Also use this amount to figure net earnings from self-employment under the farm optional method on Schedule SE (Form 1040), Part II.” The farm side of partnership taxes is also covered on the farm LLC or partnership basics page.
Code A: what a general partner reduces first
The reduction list is short. “Don’t reduce net earnings from self-employment by any separately stated deduction for health insurance expenses.”
The reduction is a subtraction, so a simple illustration shows the order. Assume code A shows $50,000 and the partner has claimed a section 179 deduction of $8,000 with no unreimbursed partnership expenses or oil and gas depletion. The calculation is $50,000 minus $8,000, which is $42,000. This is an illustration, not an IRS example. The $42,000 would then be entered on Schedule SE.
Losses in box 14
A loss is handled in a specific way. “If the amount in this box is a loss, enter only the deductible amount on Schedule SE (Form 1040).” “See Limitations on Losses, Deductions, and Credits, earlier.”
The instructions list four limits and put them in a fixed order: “These limitations and the order in which you must apply them are as follows: the basis limitations, the at-risk limitations, the passive activity limitations, and the excess business loss limitations.” The amounts printed in Part III are before any of them. “The amounts shown in boxes 1 through 21 reflect your share of income, loss, deductions, credits, and other items from partnership business or rental activities without reference to limitations on losses or adjustments that may be required of you”.
Basis is the partner’s own job to track. “Any losses and deductions not allowed can be carried forward.” “It’s the partner’s responsibility to track and maintain the information necessary to figure their adjusted basis in the partnership (also known as outside basis).”
For the at-risk step, “you’ll have to complete Form 6198, At-Risk Limitations, to figure your allowable loss for the activity.” Form 6198 is covered on the Form 6198 page.
Who counts as a general partner or a limited partner
The definitions in the instructions drive which partners are subject to the reduction rule in code A. “A general partner is a partner who is personally liable for partnership debts.”
For a limited partner: “A limited partner is a partner in a partnership formed under a state limited partnership law, whose personal liability for partnership debts is limited to the amount of money or other property that the partner contributed or is required to contribute to the partnership.”
Self-employment tax is a separate test: “However, whether a partner qualifies as a limited partner for purposes of self-employment tax depends on whether the partner is considered a limited partner under section 1402(a)(13).”
Guaranteed payments and self-employment
Guaranteed payments are reported in box 4, and guaranteed payments for services are also counted in box 14 code A. The partnership’s own 2025 Instructions for Form 1065 treat guaranteed payments for services to general and limited partners as net earnings from self-employment in the worksheet that produces code A, so those payments are already inside the code A figure. “Guaranteed payments are payments made by a partnership to a partner that are determined without regard to the partnership’s income.” “Generally, amounts on this line aren’t passive income, and you should report them in column (k) of Schedule E (Form 1040), line 28 (for example, guaranteed payments for personal services).”
Schedule E is explained on the Schedule E page, and a business owner who also files Schedule C can compare notes on the Schedule C page.
Special partnership types and the conservation reserve program
Two special cases are named in the instructions. “If your partnership is an options dealer or a commodities dealer, see section 1402(i).” “If your partnership is an investment club, see Rev. Rul. 75-525, 1975-2 C.B. 350.”
Box 20 code AQ also affects self-employment tax. “Individuals who received social security retirement or disability benefits, and are partners in farm partnerships that receive conservation reserve program payments, don’t pay self-employment tax on their portion of the payments.”
Which revision applies
The edition read for this page is the 2025 Partner’s Instructions for Schedule K-1 (Form 1065) and the 2025 Schedule K-1 (Form 1065) itself, which are the revisions irs.gov served when they were read on 2026-10-16. Check the revision printed on the Schedule K-1 you received and the matching instructions, because a later edition can change the box layout, the column letters and the reporting lines.
Common mistakes
- Filing one Schedule SE for a couple. The instructions say that if both spouses are partners, each of them completes and files their own Schedule SE.
- Forgetting the code A reduction. A general partner reduces the amount by any section 179 expense deduction claimed, unreimbursed partnership expenses claimed, and depletion claimed on oil and gas properties, but not by a separately stated health insurance deduction.
- Assuming the label “limited partner” settles self-employment tax. The instructions say it depends on whether the partner is considered a limited partner under section 1402(a)(13).
Related: Schedule C (Form 1040), Schedule E (Form 1040), Form 1040, farm LLC or partnership basics, and Schedule K-1 (Form 1065) boxes explained.
Sources
- 2025 Partner’s Instructions for Schedule K-1 (Form 1065): https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf
- Schedule K-1 (Form 1065) (2025), Partner’s Share of Income, Deductions, Credits, etc.: https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf
- 2025 Instructions for Form 1065, U.S. Return of Partnership Income (worksheet line 4c and the box 14 code A rule): https://www.irs.gov/pub/irs-pdf/i1065.pdf
Read from the IRS documents linked above on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.