Updated October 18, 2026. Quick answer: Line 9 is salaries and wages paid to people other than partners, reduced by the employment credits the instructions list. Line 10 is guaranteed payments to partners, meaning payments determined without regard to partnership income. Wages come from payroll records; guaranteed payments come from the partnership agreement and the partners’ Schedules K-1.
Line 9: salaries and wages
The form’s caption is “Salaries and wages (other than to partners) (less employment credits)”. The instructions say “Enter the salaries and wages paid or incurred for the tax year, reduced by the amount of the following credit(s).” The credits listed are the Work Opportunity Credit (Form 5884), the Empowerment Zone Employment Credit (Form 8844) and the Credit for Employer Differential Wage Payments (Form 8932). The instructions also say “Don’t reduce the amount of the allowable deduction for any portion of the credit that was passed through to the partnership from another pass-through entity.”
What stays off line 9
The instructions say “Don’t include salaries and wages reported elsewhere on the return, such as amounts included in cost of goods sold, elective contributions to a section 401(k) cash or deferred arrangement, or amounts contributed under a salary reduction simplified employee pension (SEP) agreement or a Savings Incentive Match Plan for Employees (SIMPLE) IRA plan.” Cost of goods sold is the subject of line 2 on the lines 1a to 3 page, and retirement plan contributions are on the lines 15 to 18 page.
Line 10: guaranteed payments to partners
The caption is “Guaranteed payments to partners”. The instructions say “Deduct payments or credits to a partner for services or for the use of capital if the payments or credits are determined without regard to partnership income and are allocable to a trade or business activity.” They continue “Also include on line 10 amounts paid during the tax year for insurance that constitutes medical care” for the people the instructions list. The self-employed health insurance side of this is at Schedule 1 line 17.
What stays off line 10
The instructions say “Don’t include any payments and credits that should be capitalized.” They also say “Don’t include distributive shares of partnership profits.” The employee benefits line, lines 19 to 23, has its own cross-reference to partner health insurance, which that page quotes.
Reporting to the partners
The instructions say “Report the guaranteed payments to the appropriate partners using the applicable box 4 of Schedule K-1.” The partner-side explanation is at Schedule K-1 box 4, and the Schedule K line is on the Schedule K lines 1 to 4 page.
Where the number comes from
Line 9 comes from the payroll records for people who are not partners, less the credits named above. Line 10 comes from the partnership agreement and the amounts credited or paid to each partner for services or capital. Payroll tax filings are a separate form; see Form 941.
Where it goes next
Both lines are among the deductions that line 22 adds up. The form’s caption is “Total deductions. Add the amounts shown in the far right column for lines 9 through 21”. Line 23 then subtracts that total from line 8. The next deduction lines are on the lines 11 to 14 page.
Edition and line numbers
This page reads the 2025 Form 1065 and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. Form 1065 has no “Attach to” caption, so the form’s own title line is the check: it reads “U.S. Return of Partnership Income” and the period line reads “For calendar year 2025, or tax year beginning”. Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Putting wages already counted in cost of goods sold on line 9. The instructions say “Don’t include salaries and wages reported elsewhere on the return, such as amounts included in cost of goods sold”
- Deducting a partner’s profit share on line 10. The instructions say “Don’t include distributive shares of partnership profits.”
- Deducting a payment that should be capitalized. The instructions say “Don’t include any payments and credits that should be capitalized.”
Related: Form 1065, Schedule K-1 box 4, Form 941, and S corporation reasonable salary.
Sources
- Instructions for Form 1065, U.S. Return of Partnership Income (2025): https://www.irs.gov/pub/irs-pdf/i1065.pdf
- Form 1065, U.S. Return of Partnership Income (2025): https://www.irs.gov/pub/irs-pdf/f1065.pdf
Read from the IRS documents linked above on October 18, 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.