Rep. David Kustoff has introduced the Small Business Tax Cut Act (H.R. 8415), which would raise the Section 199A qualified business income deduction from 20 percent to 23 percent for eligible pass-through businesses. The bill would also adjust the income thresholds and phase-out rules that determine deduction eligibility at higher income levels. For ACCA members running S corporations, partnerships, or sole proprietorships, those three percentage points translate directly into cash flow, hiring capacity, equipment investment, and long-term growth.
Section 199A has been one of the most consequential federal tax provisions for HVACR contractors since the 2017 Tax Cuts and Jobs Act made it law. The deduction lets contractors keep more working capital in the business at a time when the industry is squeezed from every direction: rising labor costs, workforce shortages, climbing insurance premiums, expensive equipment, financing pressure, and a steady stream of new regulations.
Current budget reconciliation talks in Congress are focused mostly on border security and immigration funding, but there’s an opening to bring tax measures into the conversation, including this Section 199A expansion. ACCA’s 199A Tax Relief Action Alert gives you a fast way to tell your Representative why the Small Business Tax Cut Act deserves their support.
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