Husband closed a small 401K. He paid the proper taxes on it. Why did he receive a Form 8995.? Also he has never owned a business. thank you

The need to file Form 8995 is unrelated to the distribution from the 401(k).

The Form 1099-R for the distribution from the 401(k) must be entered into TurboTax.  The tax liability caused by this distribution is not determined until the tax return is prepared.  Whatever amount was withheld for federal  taxes will be included as a credit on Form 1040 line 25b.

Regarding the need to file Form 8995, some investments, particularly those that provide a Schedule K-1, generate income that may qualify for a Qualified Business Income Deduction.  (Taxpayers do not "receive" Forms 8995.  Forms 8995 are filed by the taxpayer.)