Legislative update: Senate Finance Chairman Wyden's proposal to modify section 199A qualified business income deduction
The bill would phase-out the deduction for individuals earning more than $400,000, and expand the kinds of businesses that qualify.
Phase-out the deduction for individuals earning more than $400,000
U.S. Senate Finance Committee Chairman Ron Wyden (D-OR) introduced a bill to substantially modify the section 199A qualified business income deduction.
Among other things, the bill would phase-out the deduction for individuals earning more than $400,000, expand the kinds of businesses that qualify, and simplify certain rules.
A one-page summary [PDF 103 KB] of the bill states that:
Chair Wyden’s proposal would ensure this tax benefit helps Main Street small business owners, not wealthy real estate investors. The changes would expand middle-income business owners’ access to the pass-through deduction and remove complex calculations and limitations, while ensuring that the deduction goes to true small business owners—not millionaires.
Read text [PDF 38 KB] of the bill
Although the Biden Administration has not proposed modifying section 199A as part of the revenue offsets for its “American Jobs Plan” and its “American Families Plan,” congressional Democrats might consider additional revenue proposals as they put together legislation.
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