diff --git a/changelog.d/fix-schedule-c-category-losses-agi.fixed.md b/changelog.d/fix-schedule-c-category-losses-agi.fixed.md
new file mode 100644
index 00000000000..9a4de707704
--- /dev/null
+++ b/changelog.d/fix-schedule-c-category-losses-agi.fixed.md
@@ -0,0 +1 @@
+Deduct a Schedule C loss in one SSTB category from AGI when the same person has Schedule C profit in the other category, and treat the two categories separately in the Wisconsin homestead loss add-back and the Kentucky and Maryland spouse loss allocations.
diff --git a/policyengine_us/parameters/gov/states/wi/tax/income/credits/homestead/income/disqualified_loss_sources.yaml b/policyengine_us/parameters/gov/states/wi/tax/income/credits/homestead/income/disqualified_loss_sources.yaml
index 7ab7c740d6b..a998975efd7 100644
--- a/policyengine_us/parameters/gov/states/wi/tax/income/credits/homestead/income/disqualified_loss_sources.yaml
+++ b/policyengine_us/parameters/gov/states/wi/tax/income/credits/homestead/income/disqualified_loss_sources.yaml
@@ -2,9 +2,11 @@ description: Wisconsin adds back the losses from these person-level income sourc
 values:
   2021-01-01:
     # Schedule 4, line 2: net business loss from a sole proprietorship
-    # (Schedule C). SSTB and non-SSTB income are combined, as loss_ald
-    # deducts the loss of their total.
-    - total_self_employment_income
+    # (Schedule C). The line 11j instructions say to consider each business
+    # individually, so the SSTB and non-SSTB losses are added back
+    # separately, as loss_ald deducts them.
+    - self_employment_income
+    - sstb_self_employment_income
     - rental_income # line 4: net rental real estate and royalty loss
     # Form 4835 farm rental loss: rental real estate (71.52(1e)(d)) or net
     # farm loss (71.52(1e)(e)).
diff --git a/policyengine_us/tests/core/test_dependent_losses_agi_invariants.py b/policyengine_us/tests/core/test_dependent_losses_agi_invariants.py
index 432e36b895f..5ff3157bf0f 100644
--- a/policyengine_us/tests/core/test_dependent_losses_agi_invariants.py
+++ b/policyengine_us/tests/core/test_dependent_losses_agi_invariants.py
@@ -275,10 +275,9 @@ def test_units_without_dependents_match_all_member_formula(runs, units):
     """Differential check against the all-member formula."""
     p = runs["irs"]
     filing_status = runs["with"]["filing_status"]
-    se = _by_person(units, "self_employment_income") + _by_person(
-        units, "sstb_self_employment_income"
-    )
-    person_business = [se] + [_by_person(units, name) for name in BUSINESS_INPUTS[2:]]
+    # Each Schedule C category's profit and loss on its own, as
+    # irs_gross_income counts them (#9989).
+    person_business = [_by_person(units, name) for name in BUSINESS_INPUTS]
     income = sum(_unit_sum(runs, np.maximum(x, 0)) for x in person_business)
     loss = sum(_unit_sum(runs, np.maximum(-x, 0)) for x in person_business)
     limited_business_loss = np.minimum(loss, income + p.ald.loss.max[filing_status])
diff --git a/policyengine_us/tests/core/test_loss_ald_extraction_parity.py b/policyengine_us/tests/core/test_loss_ald_extraction_parity.py
index d7c2ee4ccfb..5b6701637cb 100644
--- a/policyengine_us/tests/core/test_loss_ald_extraction_parity.py
+++ b/policyengine_us/tests/core/test_loss_ald_extraction_parity.py
@@ -216,8 +216,10 @@ def _pre_extraction_reference(unit, threshold, capital_cap):
     for person, dependent in unit["members"]:
         if dependent:
             continue
+        # Each Schedule C category is its own source, as in irs_gross_income.
         business_sources = (
-            person["self_employment_income"] + person["sstb_self_employment_income"],
+            person["self_employment_income"],
+            person["sstb_self_employment_income"],
             person["farm_operations_income"],
             person["rental_income"],
             person["farm_rent_income"],
diff --git a/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml
index 526b7ca01e0..54b7d53a1c0 100644
--- a/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml
@@ -54,3 +54,32 @@
     sstb_self_employment_income_behavioral_response: 1_000
     self_employment_income: 0
     sstb_self_employment_income: -9_000
+
+- name: Non-SSTB Schedule C loss offsets SSTB Schedule C profit in AGI
+  # Two Schedules C: line 31 of (5,000) and 5,000 both go to Schedule 1
+  # line 3, which is 0, so Form 1040 line 11 AGI is 0.
+  period: 2024
+  input:
+    self_employment_income: -5_000
+    sstb_self_employment_income: 5_000
+  output:
+    adjusted_gross_income: 0
+
+- name: SSTB Schedule C loss offsets non-SSTB Schedule C profit in AGI
+  period: 2024
+  input:
+    self_employment_income: 5_000
+    sstb_self_employment_income: -5_000
+  output:
+    adjusted_gross_income: 0
+
+- name: Offsetting Schedule C results leave AGI equal to wages
+  # Form 1040 line 1z 50,000 plus Schedule 1 line 3 of 0 gives line 11 AGI
+  # of 50,000.
+  period: 2024
+  input:
+    employment_income: 50_000
+    self_employment_income: -5_000
+    sstb_self_employment_income: 5_000
+  output:
+    adjusted_gross_income: 50_000
diff --git a/policyengine_us/tests/policy/baseline/gov/states/ky/tax/income/ky_federal_agi.yaml b/policyengine_us/tests/policy/baseline/gov/states/ky/tax/income/ky_federal_agi.yaml
index 4d3e4e2e4a4..c6feabfc5df 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/ky/tax/income/ky_federal_agi.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/ky/tax/income/ky_federal_agi.yaml
@@ -271,3 +271,30 @@
     ky_agi: [50_000, -13_000]
     ky_modified_agi_if_joint: 37_000
     ky_modified_agi_if_separate: 50_000
+
+- name: A spouse's non-SSTB Schedule C loss offsets the same spouse's SSTB Schedule C profit
+  # 2025 Form 740 instructions, page 13, line 9: "Each spouse must claim his
+  # or her own income and deductions. The total of line 5, Columns A and B,
+  # must equal the combined federal adjusted gross income." The head's two
+  # Schedules C (line 31 of (5,000) and 5,000) net to 0 on Schedule 1 line 3,
+  # so the head's line 5 is 0 and the spouse's is the 40,000 of wages.
+  period: 2025
+  input:
+    people:
+      head:
+        age: 45
+        self_employment_income: -5_000
+        sstb_self_employment_income: 5_000
+      spouse:
+        age: 43
+        employment_income: 40_000
+    tax_units:
+      tax_unit:
+        members: [head, spouse]
+    households:
+      household:
+        members: [head, spouse]
+        state_code: KY
+  output:
+    adjusted_gross_income: 40_000
+    ky_federal_agi: [0, 40_000]
diff --git a/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_disqualified_losses.yaml b/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_disqualified_losses.yaml
index 3b66f547433..e9dc4838dd7 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_disqualified_losses.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_disqualified_losses.yaml
@@ -163,3 +163,25 @@
         state_code: WI
   output:
     wi_homestead_disqualified_losses: 0
+
+- name: Case 9, a non-SSTB sole proprietorship loss is not netted against SSTB sole proprietorship income.
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      head:
+        age: 70
+        self_employment_income: -5_000
+        sstb_self_employment_income: 5_000
+    tax_units:
+      tax_unit:
+        members: [head]
+    households:
+      household:
+        members: [head]
+        state_code: WI
+  output:
+    # 2023 Schedule H instructions, line 11j (page 16): consider each business
+    # individually and do not net a business with a gain against one with a
+    # loss (Example 1). Schedule 4, line 2 = 5,000.
+    wi_homestead_disqualified_losses: 5_000
diff --git a/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_income.yaml
index 2cea0b82040..744d7253c8a 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_income.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_income.yaml
@@ -96,6 +96,6 @@
     # Two Schedule C businesses (2023 instructions, page 16, Example 1):
     # Schedule 1 line 3 = 5,000 - 5,000 = 0, and Schedule 4 line 2 adds back
     # the 5,000 loss without netting. Household income = 0 + 5,000 = 5,000.
-    # loss_ald deducts the loss of total_self_employment_income (0 here), so
-    # the add-back follows that total and household income is the same.
+    # loss_ald deducts each category's loss on its own, so AGI is 0 and the
+    # add-back is the 5,000 non-SSTB loss.
     wi_homestead_income: 5_000
diff --git a/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/limited_business_loss.py b/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/limited_business_loss.py
index 153c74d4982..cd1d758970d 100644
--- a/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/limited_business_loss.py
+++ b/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/limited_business_loss.py
@@ -33,8 +33,12 @@ def formula(tax_unit, period, parameters):
         # business amounts flow into gross income and losses are deducted here,
         # so allowable business losses are capped at business income plus
         # the threshold.
-        indiv_se_income = max_(0, person("total_self_employment_income", period))
-        indiv_se_loss = max_(0, -person("total_self_employment_income", period))
+        # irs_gross_income counts each Schedule C category's profit on its
+        # own, so each category's loss is deducted on its own here.
+        non_sstb_se = person("self_employment_income", period)
+        sstb_se = person("sstb_self_employment_income", period)
+        indiv_se_income = max_(0, non_sstb_se) + max_(0, sstb_se)
+        indiv_se_loss = max_(0, -non_sstb_se) + max_(0, -sstb_se)
         self_employment_income = tax_unit.sum(not_dependent * indiv_se_income)
         self_employment_loss = tax_unit.sum(not_dependent * indiv_se_loss)
 
diff --git a/policyengine_us/variables/gov/states/ky/tax/income/ky_federal_agi.py b/policyengine_us/variables/gov/states/ky/tax/income/ky_federal_agi.py
index 5286ea249d3..f8d17c331c6 100644
--- a/policyengine_us/variables/gov/states/ky/tax/income/ky_federal_agi.py
+++ b/policyengine_us/variables/gov/states/ky/tax/income/ky_federal_agi.py
@@ -45,8 +45,10 @@ def formula(person, period, parameters):
         business_loss = max_(loss - capital_loss, 0)
         not_dependent = ~person("is_tax_unit_dependent", period)
         owned_business_loss = 0
+        # Each Schedule C category's loss counts on its own, as in loss_ald.
         for source in (
-            "total_self_employment_income",
+            "self_employment_income",
+            "sstb_self_employment_income",
             "farm_operations_income",
             "rental_income",
             "farm_rent_income",
diff --git a/policyengine_us/variables/gov/states/md/tax/income/agi/subtractions/md_two_income_subtraction.py b/policyengine_us/variables/gov/states/md/tax/income/agi/subtractions/md_two_income_subtraction.py
index 8db3537a2d3..69e54011116 100644
--- a/policyengine_us/variables/gov/states/md/tax/income/agi/subtractions/md_two_income_subtraction.py
+++ b/policyengine_us/variables/gov/states/md/tax/income/agi/subtractions/md_two_income_subtraction.py
@@ -1,9 +1,11 @@
 from policyengine_us.model_api import *
 
 
-# Person-level sources of the business losses in loss_ald.
+# Person-level sources of the business losses in loss_ald, with each
+# Schedule C category on its own, as loss_ald deducts them.
 BUSINESS_LOSS_SOURCES = [
-    "total_self_employment_income",
+    "self_employment_income",
+    "sstb_self_employment_income",
     "farm_operations_income",
     "rental_income",
     "farm_rent_income",