Legislation Introduced to Make Passthrough Deduction Permanent

ACEC News / Advocacy

April 11, 2019

Legislation Introduced to Make Passthrough Deduction Permanent

Senator Steve Daines (R-MT) has introduced the Senate version of the Main Street Tax Certainty Act, which would make the Section 199A 20 percent passthrough tax deduction permanent. Representatives Jason Smith (R-MO) and Henry Cuellar (D-TX) introduced identical legislation in the House.

The Tax Cuts and Jobs Act lowered the corporate tax rate from 35 percent to 21 percent, which provides significant tax relief for engineering firms organized as C corporations, including personal services corporations. The law also created the Section 199A 20 percent tax deduction for passthrough firms, including S corporations, partnerships, and sole proprietorships.  

The 21 percent corporate rate is permanent, but the Section 199A deduction is one of many provisions in the TCJA that expire at the end of 2025. ACEC joined over 100 other organizations in sending a letter of support for the Main Street Tax Certainty Act to the leaders of the House and Senate tax-writing committees.

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