Enhanced Small Business Growth Act of 2026

This bill would change the federal tax deduction for qualified business income (Section 199A) for certain domestic manufacturers. A taxpayer would qualify if at least 85 percent of its qualified business income comes from a business that makes physical goods, where at least 20 percent of the related cost of goods sold comes from labor and overhead in the United States. For these manufacturers, the deduction rate would rise from 20 percent to 30 percent, and the wage-based limit on the deduction would rise from 50 percent to 100 percent of W-2 wages. The bill also changes how taxable income is figured for this deduction, so that taxpayers who itemize would compute it without counting charitable contribution deductions. The changes would apply to tax years beginning after December 31, 2025.

Full text and official record on Congress.gov

Sponsors

• Carol D. Miller Republican sponsor
• 0 cosponsors