Treasury Issues Final “Pass-Through Deduction” Regulations
From the The U.S. Department of the Treasury
On Jan. 18, the Treasury Department issued final regulations on the “Section 199A deduction” (often called the pass-through business deduction or the qualified business income deduction). The deduction, which provided tax relief for construction firms organized as pass-through entities (as opposed to those organized as C-Corporations, whose tax rate was reduced to 21 percent), allows those businesses that qualify to deduct 20 percent of their qualified business income until the end of 2026, when the provision expires. Associated General Contractors feels confident that construction firms will have wide use of the new deduction, allowing pass-through firms to receive significant tax relief when they file their taxes later this year."