Sponsors (46)
The bill permanently preserves the 20% QBI deduction—providing lasting tax relief and planning certainty for many pass‑through businesses—while increasing long‑term federal revenue costs, potentially favoring higher‑income filers, and adding sustained administrative burdens for tax authorities.
Small-business owners and individual taxpayers who claim the 20% qualified business income (QBI) deduction keep a permanent deduction, lowering taxable income and potentially reducing tax bills.
Taxpayers and financial institutions gain greater tax‑planning certainty because the 20% QBI deduction no longer sunsets, reducing uncertainty for business decisions, investment, and lending.
All taxpayers: Permanently forgoing future revenue from the deduction increases the long‑term federal budget deficit or will require offsetting spending cuts or tax increases elsewhere.
Higher‑income pass‑through owners: Keeping the deduction may continue to disproportionately benefit higher‑earning owners and worsen tax equity across filers.
Treasury/IRS and taxpayers: Making the deduction permanent sustains the need for ongoing IRS guidance, oversight, and enforcement about qualification rules, increasing administrative workload and compliance costs.
Based on analysis of 2 sections of legislative text.
Makes the Section 199A qualified business income deduction permanent by removing the statutory subsection that created its sunset. This change affects taxpayers who claim the 199A deduction—including many small businesses, pass-through entities, and certain sole proprietors—by eliminating the scheduled expiration for that tax benefit and making it effective on enactment.
Removes the sunset provision to make the Section 199A qualified business income deduction permanent.
Official title: Amend the Internal Revenue Code of 1986 to make permanent the deduction for qualified business income.
Introduced January 23, 2025 by Steve Daines · Last progress January 23, 2025