Small Business Tax Cut Act

The Small Business Tax Cut Act increases the qualified business income deduction from 20 percent to 23 percent for eligible taxpayers, directly affecting small business owners and investors. The bill modifies income thresholds that limit this deduction for higher earners and extends the phase-in rules for taxable income above certain limits. Additionally, it allows dividends from qualified business development companies to be treated similarly to qualified REIT dividends for deduction purposes. These changes apply to taxable years beginning after December 31, 2026.