An applicable taxpayer has at least $1,000 of active business income
What the document says“The term `applicable taxpayer' means, with respect to any taxable year, a taxpayer whose aggregate qualified business income with respect to all active qualified trades or businesses of the taxpayer for such taxable year is at least $1,000.”
The section defines an applicable taxpayer as one whose total qualified business income from all active qualified trades or businesses in the year is at least $1,000, and an active qualified trade or business as one in which the taxpayer materially participates within the meaning of section 469(h) of the Internal Revenue Code of 1986. From a taxable year beginning after 2026 the $400 and $1,000 figures each rise by a cost of living adjustment under section 1(f)(3) measured from calendar year 2025, rounded to the nearest multiple of $5.
What the document actually says“The term `applicable taxpayer' means, with respect to any taxable year, a taxpayer whose aggregate qualified business income with respect to all active qualified trades or businesses of the taxpayer for such taxable year is at least $1,000.”
A taxpayer qualifies with at least $1,000 of business income. That is the total from all the trades the taxpayer takes part in.
The taxpayer must take a real part in the business. Both figures grow with prices after 2026. Any rise is rounded to the nearest $5.
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