Small Business Tax Cut Act

This bill would change the federal tax deduction for qualified business income, which lets owners of businesses such as sole proprietorships, partnerships, and S corporations deduct part of their business income. It would raise the deduction from 20 percent to 23 percent. It would change how limits on the deduction phase in for taxpayers whose taxable income is above a set threshold, setting the phase-in amount at 75 percent of income above that threshold. It would also let certain interest dividends from business development companies qualify for the deduction and would update the inflation adjustment base year. The changes would apply to tax years beginning after December 31, 2026.

Full text and official record on Congress.gov

Sponsors

• David Kustoff Republican sponsor
• 11 cosponsors