Section 199A Deduction for Pass-Through Entities
Section 199A permits a deduction of up to 20% of qualified business income (“QBI”) from a domestic pass-through business, plus 20% of qualified REIT dividends and 20% of qualified PTP income, if applicable, and is available for tax years beginning after December 31, 2017 and before January 1, 2026.
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Frequently Asked Questions
Section 199A Frequently Asked Questions
Q: What is the § 199A deduction?
Effective for tax years beginning after December 31, 2017 and before January 1, 2026, a taxpayer other than a corporation is entitled to a deduction equal to 20% of the taxpayer’s “qualified business income” earned in a “qualified trade or business.”
Q: Who can claim the deduction?
The § 199A deduction is available to any taxpayer “other than a corporation,” this includes Individual owners of sole proprietorships, rental properties, S corporations, or partnerships.
Q: How much is the deduction?
Subject to certain other limitations, each individual pass-through business owner may be able to claim the § 199A deduction for the lesser of: (i) 20% of the combined qualified business income (QBI) from the individual’s trades or businesses, plus 20% of the individual’s combined qualified REIT dividends and qualified Publicly Traded Partnership (PTP) income; or (ii) 20% of the amount by which the individual’s taxable income exceeds the individual’s net capital gain.
For a complete list of frequently asked questions, visit the resources tab below.
Research and Reports
- Section 199A: Detailed New Proposed Regulations and Their Impacts on Government Contractors
- 2018 Tax Reform Highlights for Technology, Health and Life Sciences, Manufacturing and Distribution
- Top Ways Tax Reform Affects Individuals, Estates and Trusts
- Take Advantage of the 199A 20% Deduction
- Section 199A: Detailed New Proposed Regulations
- Cherry Bekaert Resources