[20211108]IN11796_关于延长第199A条扣除额的辩论.pdf

CRS INSIGHT Prepared for Members and Committees of Congress INSIGHTINSIGHTi i The Debate Over Extending the Section 199A Deduction November 8, 2021 The tax law passed by Congress in 2017 (P.L. 115-97; also known as the Tax Cuts and Jobs Act or TCJA) made significant changes in the taxation of corporate and noncorporate business income. Two key changes were a permanent cut in the corporate tax rate from a top rate of 35% to a single rate of 21%, and a temporary deduction for qualified pass-through business income under Internal Revenue Code Section 199A. One consequence of these changes was a shift in the tax incentives for businesses to operate as a C corporation (whose profits are taxed twice) or a pass-through entity (whose profits are taxed once). The Section 199A deduction is due to expire at the end of 2025. There is a debate over whether to extend the deduction and if so, with or without changes. This Insight explains how the deduction is calculated, examines the arguments for and against the current deduction, and identifies legislation in the 117th Congress that would alter the deductions future status. Calculation of the Deduction The Section 199A deduction is intended to