Treasury Releases Draft Rule for Important Tax Deduction
Since the passage of the Tax Cuts and Jobs Act last year, the Treasury Department has proposed numerous rules and issued guidance implementing the changes in the law. This week, the Treasury Department released a proposed rule to implement a provision of the law, Section 199A, which provides qualified pass-through businesses with a 20% tax deduction, bringing the effective tax rate for those businesses down to 29.6%. The National Association of Wholesaler-Distributors, Parity for Main Street Employers, and the S-Corp Association have been engaged with regulators on the drafting of the rule. We believe the current draft rule is a positive step. The proposal includes some constructive provisions, including rules governing the ability of a pass-through to aggregate income from multiple legal entities to qualify for the deduction. You can review the proposed rule here.
The rule will shortly become open to public comment. CDA will continue working with our industry partners to ensure that the new rule is implemented in a positive way for our membership.