diff --git a/transformer_engine/pytorch/module/linear.py b/transformer_engine/pytorch/module/linear.py
index de55155b96..b1d4196dfd 100644
--- a/transformer_engine/pytorch/module/linear.py
+++ b/transformer_engine/pytorch/module/linear.py
@@ -65,8 +65,6 @@
 )
 from ..tensor.float8_tensor import Float8CurrentScalingQuantizer, Float8Quantizer
 from ..tensor.mxfp8_tensor import MXFP8Quantizer
-from ..tensor._internal.mxfp8_tensor_base import MXFP8TensorBase
-from ..tensor._internal.float8_blockwise_tensor_base import Float8BlockwiseQTensorBase
 from ..export import is_in_onnx_export_mode, assert_warmed_up
 from ..cpu_offload import is_cpu_offload_enabled, mark_activation_offload
 from ...debug.pytorch.debug_state import TEDebugState
@@ -170,16 +168,19 @@ def forward(
                 if input_quantizer is None:
                     raise ValueError("Missing quantizer for input tensor")
                 if not isinstance(inputmat, QuantizedTensorBase):
-                    input_quantizer.set_usage(
-                        rowwise=True, columnwise=backward_needs_input and not save_original_input
-                    )
+                    own_quantized_input = True
+                    input_quantizer.set_usage(rowwise=True, columnwise=backward_needs_input)
                     if isinstance(
                         input_quantizer, (Float8Quantizer, Float8CurrentScalingQuantizer)
                     ):
                         # All-gather is not supported with FP8 column-wise data
                         input_quantizer.set_usage(columnwise=False)
+                    if save_original_input:
+                        # No need for column-wise data since this
+                        # tensor will not be cached for backward pass
+                        input_quantizer.set_usage(columnwise=False)
+                        own_quantized_input = False
                     inputmat = input_quantizer(inputmat)
-                    own_quantized_input = True
             else:
                 inputmat = cast_if_needed(inp, activation_dtype)  # Cast for AMP
 
@@ -344,23 +345,29 @@ def forward(
                 inputmat = inp
 
             ctx.weight_quantizer = weight_quantizer
-            saved_inputmat = None
 
             ctx.backward_input_needs_gather = (
                 weight.requires_grad and parallel_mode == "column" and sequence_parallel
             )
 
+            # Discard unneeded data in input tensor
+            if (
+                backward_needs_input
+                and own_quantized_input
+                and isinstance(inputmat, QuantizedTensorBase)
+            ):
+                if ctx.backward_input_needs_gather and isinstance(
+                    quantizer, (Float8Quantizer, Float8CurrentScalingQuantizer)
+                ):
+                    # All-gather is not supported with FP8 column-wise data
+                    inputmat.update_usage(rowwise_usage=True, columnwise_usage=False)
+                else:
+                    # Discard row-wise data since it is not needed in backward pass
+                    inputmat.update_usage(rowwise_usage=False, columnwise_usage=True)
+
+            # Cached input tensor
+            saved_inputmat = None
             if backward_needs_input:
-                if not save_original_input:
-                    if own_quantized_input and isinstance(inputmat, QuantizedTensorBase):
-                        # For sequence parallel in vanilla FP8, rowwise data is
-                        # to gather the input. For MXFP8, columnwise only data
-                        # can be allgathered.
-                        if (
-                            isinstance(inputmat, (MXFP8TensorBase, Float8BlockwiseQTensorBase))
-                            or not ctx.backward_input_needs_gather
-                        ):
-                            inputmat.update_usage(rowwise_usage=False, columnwise_usage=True)
                 saved_inputmat = inputmat
 
             # Weight with column-wise usage is needed for dgrad GEMM.
@@ -572,20 +579,26 @@ def backward(ctx, grad_output: torch.Tensor) -> Tuple[Union[torch.Tensor, None],
             inputmat_total = None
             inputmat_total_work = None
             if ctx.requires_wgrad:
-                input_is_quantized = isinstance(inputmat, QuantizedTensorBase)
                 if ctx.fp8 or ctx.debug:
-                    if not input_is_quantized:
+                    if isinstance(inputmat, QuantizedTensorBase):
+                        # Input tensor is already quantized
+                        pass
+                    elif ctx.debug:
+                        # Debug quantizer will be applied immediately before wgrad GEMM
+                        pass
+                    else:
+                        # Quantize input tensor
                         quantizer = ctx.input_quantizer
-                        if isinstance(quantizer, (Float8Quantizer, Float8CurrentScalingQuantizer)):
-                            quantizer.set_usage(
-                                rowwise=True,
-                                columnwise=not ctx.backward_input_needs_gather,
-                            )
+                        if ctx.backward_input_needs_gather and isinstance(
+                            quantizer, (Float8Quantizer, Float8CurrentScalingQuantizer)
+                        ):
+                            # All-gather is not supported with FP8 column-wise data
+                            quantizer.set_usage(rowwise=True, columnwise=False)
                         else:
-                            quantizer.set_usage(rowwise=False, columnwise=True)
+                            quantizer.set_usage(rowwise=True, columnwise=True)
                         inputmat = quantizer(inputmat)
                 else:
-                    if input_is_quantized:
+                    if isinstance(inputmat, QuantizedTensorBase):
                         inputmat = inputmat.dequantize(dtype=ctx.activation_dtype)
                     else:
                         inputmat = cast_if_needed(inputmat, ctx.activation_dtype)