On June 22, NMHC joined over 100 trade associations to express “strong opposition to any reductions or repeal of the 20-percent deduction for qualified business income under Section 199A, including phasing out the deduction above certain income thresholds.” The letter came in response to press reports that Senate Finance Committee Chairman Ron Wyden (D-OR) is drafting legislation to modify the incentive.
Enacted as part of the Tax Cuts and Jobs Act, the pass-through deduction benefits flow-through entities (i.e., LLCs, partnerships, S Corporations and REITs) that dominate the multifamily industry and lowers the top tax rate imposed on investors in such entities to 29.6 percent from 37 percent. Unless it’s extended, this incentive will expire for taxable year’s beginning after 2025.
NMHC strongly supports making permanent the 20 percent deduction, particularly given that C corporations are taxed at a 21 percent rate.
To learn more about NMHC advocacy work in this area, please visit our tax and accounting webpage.
