Referred to the House Committee on Ways and Means.
The bill replaces the existing Section 199A qualified business income (QBI) deduction with a simplified, capped deduction equal to the lesser of a taxpayer’s combined QBI or $25,000. It removes the 20% multiplier and several complex limitation and carryover rules, phases down the deduction dollar-for-dollar above $200,000 AGI ($400,000 joint), tightens certain W–2 reporting and wage-allocation requirements, and takes effect for taxable years beginning after December 31, 2025.
Progressives emphasize helping small businesses and limiting high-earner benefits.
Relative to its intended legislative type, this bill is a direct substantive change to the Internal Revenue Code that replaces the percentage-based qualified business income deduction with a capped-dollar approach and makes multiple conforming amendments.
The bill replaces the existing Section 199A qualified business income (QBI) deduction with a simplified, capped deduction equal to the lesser of a taxpayer’s combined QBI or $25,000.
It removes the 20% multiplier and several complex limitation and carryover rules, phases down the deduction dollar-for-dollar above $200,000 AGI ($400,000 joint), tightens certain W–2 reporting and wage-allocation requirements, and takes effect for taxable years beginning after December 31, 2025.
Legislatively significant tax change with targeted appeal but unclear fiscal treatment and potential pushback from affected higher-income pass-through taxpayers and budget hawks.
Relative to its intended legislative type, this bill is a direct substantive change to the Internal Revenue Code that replaces the percentage-based qualified business income deduction with a capped-dollar approach and makes multiple conforming amendments. It specifies thresholds, modifies definitions (W–2 wages, taxable income rules), eliminates certain carryover provisions, and provides an effective date.
Progressives emphasize helping small businesses and limiting high-earner benefits.
These are examples from the analysis, not a ranked list of the most-affected groups.
Progressives emphasize helping small businesses and limiting high-earner benefits.
Likely broadly favorable because the proposal targets relief to smaller "mom-and-pop" businesses, limits large pass-through tax benefits, and simplifies the code.
Would want assurances that low-income small businesses truly benefit and that the wealthy do not retain outsized benefits.
Cautiously supportive of simplifying and targeting relief to small businesses, while wanting clarity on budgetary cost and transitional effects.
Would seek a revenue estimate and might press for technical fixes to loss and wage rules.
Likely skeptical or opposed because it reduces the proportional deduction for many pass-through businesses, imposes an income phaseout, and represents a redistribution of tax benefits away from higher-earning small business owners.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Legislatively significant tax change with targeted appeal but unclear fiscal treatment and potential pushback from affected higher-income pass-through taxpayers and budget hawks.
The bill has not accumulated any surfaced votes yet.
Progressives emphasize helping small businesses and limiting high-earner benefits.
Legislatively significant tax change with targeted appeal but unclear fiscal treatment and potential pushback from affected higher-income p…
Relative to its intended legislative type, this bill is a direct substantive change to the Internal Revenue Code that replaces the percentage-based qualified business income deduction with a capped-dollar approach and m…
Go beyond the headline summary with full stakeholder mapping, legislative design analysis, passage barriers, and lens-by-lens tradeoff breakdowns.