Key permanent changes for pass-through businesses in 2026, largely passed under the “One Big Beautiful Bill Act” (OBBBA), include the permanent extension of the Qualified Business Income (QBI) deduction, the restoration of 100% bonus depreciation, and changes to the business interest deduction.
Section 199A QBI deduction
The 20% Section 199A deduction for qualified business income is made permanent, removing the sunset provision from the 2017 Tax Cuts and Jobs Act (TCJA).
Minimum deduction: Beginning in 2026, a new minimum QBI deduction of $400 is available for taxpayers with at least $1,000 in qualified business income from an active trade or business.
Wider phase-in limits: The income range over which the deduction’s limitations phase in for high earners has been expanded. For married couples filing jointly, this range increases from $100,000 to $150,000 in 2026.
No change in percentage: The 20% deduction rate remains the same, despite earlier legislative proposals to increase it.
