House Tax Bill Would Permanently Extend Small Business Credit
On July 18, Rep. Lloyd Smucker (R-Penn.) reintroduced the Main Street Tax Certainty Act (H.R. 4721), which would make permanent the Section 199A 20 percent deduction for business income earned through pass-through entities such as S-corporations or partnerships.
The deduction, which was enacted as part of the 2017 tax reform bill, is slated to expire at the end of 2025.
Making the 20 percent deduction permanent would ensure millions of small and medium-sized metals industry companies continue to maintain tax parity with large corporations and have the ability to compete on a global level.
As Rep. Smucker noted in a press release, Section 199A allows up to a 20 percent pass-through income deduction for small businesses organized as sole proprietorships, partnerships, S-corporations, trusts, or estates, or income from qualified REIT dividends and income from publicly traded partnerships. Studies show that tax parity between small businesses organized as pass-through entities and corporations will end if Section 199A ceases to exist.
Private companies organized as pass-through businesses employ 58 percent of all private sector workers.