IRC §199A · 26 U.S.C. §199A
IRC §199A: Qualified Business Income Deduction
IRC §199A is the 20% qualified business income deduction for pass-through owners — now permanent under OBBBA, not the 23% the House draft proposed. Wage and capital limits phase in at higher incomes, and specified service businesses face tighter rules.
What it governs
- 20% of qualified business income — profit, not W-2 wages
- W-2 wage and capital limits phase in above the thresholds
- Specified service businesses face tighter income phaseouts
- $400 minimum deduction for taxpayers with $1,000-plus of active QBI
In the GuideFull treatment in Chapter 12 of the Guide (principal treatment) and Chapter 9 — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).
From the practiceQBI: 20% permanent, not 23% →
Questions this section answers
- Did the QBI deduction go to 23%?
- No — 23% was the House OBBBA draft; the Senate stripped it. Enacted law kept 20% and made it permanent.
- Do S-corp wages count as QBI?
- No — only business profit qualifies, not W-2 wages. The reasonable-salary decision directly shrinks or grows the QBI base.
- What is an SSTB?
- A specified service trade or business — health, law, consulting, athletics, financial services, and similar skill-based fields — subject to tighter income phaseouts.
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The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
Get the Guide — $299