U.S. Rep. Lloyd Smucker (R-PA), a House Ways and Means Committee senior member, recently re-introduced legislation that would permanently extend Section 199A of the Internal Revenue Code.
Section 199A was adopted as part of the 2017 Tax Cuts and Jobs Act to promote equity between small businesses and large corporations, and is scheduled to expire on Dec. 31. It allows for a 20 percent deduction of pass-through income for small businesses organized as sole proprietorships, partnerships, S corporations, trusts, or estates. The deduction also is permitted on income from qualified real estate investment trust dividends or from publicly traded partnerships.
“When small businesses thrive, our communities thrive,” Smucker said. “Small businesses need predictability and making Section 199A permanent will provide Main Street with the certainty they need to invest in their workforce, operations, and community. This pro-growth policy will ensure small businesses maintain tax parity with larger corporations.”
The Section 199A deduction supports 2.6 million jobs, according a Ernst and Young study.
The bipartisan Main Street Tax Certainty Act was cosponsored by 152 House of Representative members and has the support of more than 230 organizations.
Sen. Steve Daines (R-MT) introduced a companion bill in the U.S. Senate.