Extension and Enhancement of Deduction for Qualified Business Income
Section 70105 · Sec. 70105 ·
What this chapter is about
This part raises two phase-in figures to $75,000 and $150,000. It also adds a floor of $400 on the business income deduction. To get the floor a taxpayer needs at least $1,000 of active business income. The changes start with tax years after December 31, 2025.
“is amended by striking "$50,000 ($100,000 in the case of a joint return)" each place it appears and inserting "$75,000 ($150,000 in the case of a joint return)".”
The section strikes the figures $50,000 and $100,000 each place they appear in subparagraph (B) of section 199A(b)(3) of the Internal Revenue Code of 1986 and in paragraph (3) of section 199A(d), and inserts $75,000 and $150,000.
What the document actually says
“is amended by striking "$50,000 ($100,000 in the case of a joint return)" each place it appears and inserting "$75,000 ($150,000 in the case of a joint return)".”
That sentence, in plain words
The figures $50,000 and $100,000 are taken out wherever they appear. The figures $75,000 and $150,000 are put in.
What this is about
The larger figure is for a joint return. The same swap is made in two spots. What the figures control is not recorded here.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70105 in the PDF
What the document says
“In the case of an applicable taxpayer for any taxable year, the deduction allowed under subsection (a) for the taxable year shall be equal to the greater of--”
The section rewrites subsection (i) of section 199A of the Internal Revenue Code of 1986 so that for an applicable taxpayer the deduction is the greater of the amount worked out without the subsection and $400, and inserts a cross reference to the new subsection into section 199A(a).
What the document actually says
“In the case of an applicable taxpayer for any taxable year, the deduction allowed under subsection (a) for the taxable year shall be equal to the greater of--”
That sentence, in plain words
The deduction is the bigger of two figures. That holds for a taxpayer who qualifies. Those two figures follow below.
What this is about
One is the deduction worked out the normal way. The other is a flat $400. Whichever is larger is allowed.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
“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.”
That sentence, in plain words
A taxpayer qualifies with at least $1,000 of business income. That is the total from all the trades the taxpayer takes part in.
What this is about
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.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70105 in the PDF
What the document says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
The section applies its amendments to taxable years beginning after December 31, 2025.
What the document actually says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
That sentence, in plain words
The changes start with tax years that begin after December 31, 2025.
What this is about
Earlier tax years are not touched. The old rules still hold for them. The date is fixed in the law.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section does: raise the taxable income limitation phase-in amounts, create the minimum deduction, define an applicable taxpayer and an active qualified trade or business with the inflation adjustment and rounding, and fix the effective date.
The conforming amendment inserting a cross reference into section 199A(a) is carried in a summary rather than recorded as its own proposal.
The section works by amending section 199A of the Internal Revenue Code of 1986 and points to section 469(h) of that Code, neither of which is indexed here, so how the deduction is otherwise worked out cannot be checked against anything on this site.
