The Treasury Department and the IRS issued final regulations and three related pieces of guidance, implementing the new qualified business income (QBI) deduction (section 199A deduction). The new QBI deduction, created by the 2017 Tax Cuts and Jobs Act (TCJA) allows many owners of sole proprietorships, partnerships, S corporations, trusts, or estates to deduct up to 20 percent of their qualified business income. The guidance includes:
- A set of regulations, finalizing proposed regulations issued last summer
- A new set of proposed regulations providing guidance on several aspects of the QBI deduction, including qualified REIT dividends received by regulated investment companies
- A revenue procedure providing guidance on determining W-2 wages for QBI deduction purposes
- A notice on a proposed revenue procedure providing a safe harbor for certain real estate enterprises that may be treated as a trade or business for purposes of the QBI deduction.
For details on the QBI deduction, including answers to frequently-asked questions and information on other TCJA provisions, visit IRS.gov/taxreform.