The Main Street Tax Certainty Act (HR1381/S480), sponsored by Rep. Jason Smith (R-MO8) and Sen. Steve Daines (R-MT), would make permanent the tax deduction for qualified business income, often referred to as the 20% pass through deduction. This deduction was put in place by the Tax Cuts & jobs Act of 2017. It allows certain businesses to take a 20% pass through deduction for qualified business income. Under current law, this deduction is set to expire after December 31, 2025.
Tax law Section 199A allows small businesses organized as S corporations, or “passthrough” corporations, to reduce their potential tax burden. This deduction helps small businesses keep more of their money and allows them to reinvest that money in their business and employees ultimately strengthening their hometown economy. It is vital that this deduction become permanent so that businesses and the communities that support them can continue to thrive.