Bill > HR8415

This bill, titled the "Small Business Tax Cut Act," proposes to amend Section 199A of the Internal Revenue Code of 1986 to increase the deduction for qualified business income from 20 percent to 23 percent. Qualified business income refers to the net income a business owner receives from a pass-through entity, such as a partnership or S-corporation, which is then taxed at the individual level. The bill also modifies limitations on this deduction based on a taxpayer's taxable income, creating an exception for those below a certain threshold and a phase-in for those above it. Additionally, it expands the types of income eligible for this deduction to include certain interest dividends from qualified business development companies, which are companies that invest in smaller businesses and elect to be treated as regulated investment companies. These changes are set to take effect for taxable years beginning after December 31, 2026.