Close
Close

Wyden pushes to limit Section 199A

RFP
Tax Hot Topics newsletter Senate Finance Committee Chair Ron Wyden, D-Ore., said he is will seek to add to Democratic tax increase legislation a phase out of the Section 199A deduction for individuals with income exceeding $400,000.

The fate of Section 199A remains a major point of contention in Democratic tax deliberations. President Joe Biden did not target it in any of his “green book” tax increase proposals, but many congressional Democrats have repeatedly criticized it. Limiting it could provide an additional source of revenue to cover other Democratic priorities, but moderate Democrats are sympathetic to the private companies that use it. The effort to preserve it will also likely be fierce from many business groups, but the administration may be open to adding a limit. Kimberly Clausing, deputy assistant Treasury secretary for Tax Analysis, noted she “wouldn’t read much into the absence” of a proposal on Section 199A in Biden’s platform.

Wyden is seeking to phase out the deduction between business income levels of $400,000 and $500,000, but to expand it below those thresholds to make it available for specified service trades or businesses.

Contact:
Dustin Stamper
Managing Director
Washington National Tax Office
T +1 202 861 4144

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.