The American Institute of CPAs (AICPA) has renewed its call for
immediate guidance on new Code Sec. 199A. The AICPA highlighted
questions about qualified business income (QBI) of pass-through income
under the Tax Cuts and Jobs Act ( P.L. 115-97). "Taxpayers and
practitioners need clarity regarding QBI in order to comply with their
2018 tax obligations," the AICPA said in a February 21 letter to the
The Tax Cuts and Jobs Act created Code Sec. 199A. The deduction is temporary and begins this year.
Generally, qualified taxpayers may deduct up to 20 percent of domestic QBI from a partnership, S corporation or sole proprietorship. Congress put in place a limitation based on wages paid, or on wages paid plus a capital element, among other requirements. Certain service trades or businesses generally may not take advantage of the deduction but there are exceptions.
Almost immediately after passage of the new tax law, the AICPA and other tax professional groups urged on the IRS to move quickly on guidance. Recently, the National Society of Accountants (NSA) reported that the IRS would issue guidance on Code Sec. 199A this summer.
The AICPA identified several areas of immediate concern. They are: