SCorpDesk / 2026 S-Corp & QBI Guides / 2026 QBI Deduction Calculator (Permanent 23% Section 199A OBBBA Rules & W-2 Wage Limit)
2026 QBI Deduction Calculator (Permanent 23% Section 199A OBBBA Rules & W-2 Wage Limit)
What changed for the Section 199A Qualified Business Income (QBI) deduction in 2026?
Under the One Big Beautiful Bill Act (Public Law 119-21), the Section 199A Qualified Business Income deduction was made permanent and made permanent at 20% of qualified pass-through business income (replacing the earlier 23% House draft, while expanding the phase-in range to $75,000 Single / $150,000 MFJ and adding a $400 minimum QBI floor) (Schedule C, Partnership K-1, and S-Corp K-1). Above the 2026 taxable income threshold ($197,300 Single / $394,600 Married Filing Jointly), the deduction is capped by the 50% Form W-2 wage limit, making an S-Corp W-2 salary essential for high-income owners.
Under the One Big Beautiful Bill Act (Public Law 119-21), the Section 199A Qualified Business Income deduction was made permanent and made permanent at 20% of qualified pass-through business income (replacing the earlier 23% House draft, while expanding the phase-in range to $75,000 Single / $150,000 MFJ and adding a $400 minimum QBI floor) (Schedule C, Partnership K-1, and S-Corp K-1). Above the 2026 taxable income threshold ($197,300 Single / $394,600 Married Filing Jointly), the deduction is capped by the 50% Form W-2 wage limit, making an S-Corp W-2 salary essential for high-income owners.
Frequently Asked Questions
What changed for the Section 199A Qualified Business Income (QBI) deduction in 2026?
Under the One Big Beautiful Bill Act (Public Law 119-21), the Section 199A Qualified Business Income deduction was made permanent and made permanent at 20% of qualified pass-through business income (replacing the earlier 23% House draft, while expanding the phase-in range to $75,000 Single / $150,000 MFJ and adding a $400 minimum QBI floor) (Schedule C, Partnership K-1, and S-Corp K-1). Above the 2026 taxable income threshold ($197,300 Single / $394,600 Married Filing Jointly), the deduction is capped by the 50% Form W-2 wage limit, making an S-Corp W-2 salary essential for high-income owners.