To amend the Internal Revenue Code of 1986 to make permanent the deduction for qualified business income.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
This bill makes permanent the 20% deduction on qualified business income (Section 199A of the Internal Revenue Code) for pass-through businesses such as sole proprietorships, partnerships, S corporations, and certain trusts and estates. Without this bill, the deduction would expire after 2025 under the Tax Cuts and Jobs Act sunset.
Who Benefits and How
Owners of pass-through businesses benefit from a permanent 20% deduction on qualified business income, reducing their effective tax rate. Small and mid-sized businesses organized as pass-through entities see the greatest benefit, as they rely on this deduction to maintain tax parity with C corporations that received a permanent rate cut under the 2017 tax reform.
Who Bears the Burden and How
The federal treasury loses revenue from the permanent extension of this deduction. The tax benefit primarily flows to higher-income pass-through business owners, meaning the broader tax base must absorb the foregone revenue.
Key Provisions
- Strikes the sunset clause (subsection (i)) from IRC Section 199A
- Makes the 20% qualified business income deduction permanent
- Effective for taxable years beginning after December 31, 2025
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.
At a Glance
What This Bill Does
Makes the Section 199A qualified business income deduction for pass-through entities permanent by removing its sunset provision, which would otherwise expire after December 31, 2025.
Key Policy Areas
Taxation, Small Business
Primary Purpose
Makes the Section 199A qualified business income deduction for pass-through entities permanent by removing its sunset provision, which would otherwise expire after December 31, 2025.
Policy Domains
Permanent QBI Deduction
Identified Gains
Contextual inference, no direct clause citation- Pass-through business owners (sole proprietors, partners, S corp shareholders)
- Small and mid-sized businesses
- Tax preparation and advisory industry
Contextual inference, no direct clause citation
Identified Costs
Contextual inference, no direct clause citation- Federal treasury
- General taxpayers absorbing reduced revenue
Contextual inference, no direct clause citation
Sponsors
Legislative Progress
IntroducedMr. Smucker (for himself, Mr. Kelly of Pennsylvania, Mr. LaHood, …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Professional service firms (law, accounting, consulting), Tax advisory and preparation firms
Pass-through business owners (sole proprietors, partnerships, S corporations)
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "Internal Revenue Service"
- → Administers the permanent QBI deduction
Key Definitions
Terms defined in this bill
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology