Bill > S2962

This bill, called the Small Business Investor Tax Parity Act of 2025, amends the Internal Revenue Code to extend a tax deduction (known as the section 199A deduction) to qualified Business Development Company (BDC) interest dividends, similar to how the deduction currently applies to Real Estate Investment Trust (REIT) dividends. Specifically, the bill defines a "qualified BDC interest dividend" as a dividend from an electing business development company that is attributable to net interest income properly allocable to a qualified trade or business. An "electing business development company" is defined as a business development company that has elected to be treated as a regulated investment company under section 851 of the tax code. The bill will apply to taxable years beginning after December 31, 2026, which means the tax provision will take effect for the 2027 tax year and beyond, potentially providing tax benefits to investors in business development companies by allowing them to take advantage of the same type of tax deduction currently available to REIT investors.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/2962/all-info