Possibility that Congress revives the former section 199 deduction, or a variation of it
During his campaign for reelection, President Trump promised a tax plan that would generally provide numerous tax cuts, including a reduction in the federal corporate tax rate from 21% to 15% but only for companies manufacturing their products in the United States. As president-elect, Trump continued to pledge to implement a tax rate reduction for U.S. manufacturers. For many taxpayers and tax practitioners, those soundbites leave them wondering whether that change would mean reinstating the former domestic production activities deduction (DPAD) under section 199 that was repealed in 2017 by Pub. L. No. 115-97 (commonly referred to as the “Tax Cuts and Jobs Act” (TCJA)).
Read a January 2025 article* that discusses the possibility that Congress revives the former section 199 deduction, or a variation of it, and why such a revival, unless specific changes are made, may not be celebrated by all domestic manufacturing companies.
* This article appears in Tax Notes Federal (January 20, 2025) and is provided with permission.