EMA Urges Congress To Make Current Limit On Business Interest Deduction Permanent
EMA joined other associations, representing thousands of businesses and workers throughout the country, in a letter to leadership of the tax writing committees in the House and Senate in strong opposition of the Small Business Tax Fairness Act (S.2387) and other recent proposals to change the 199A deduction.
EMA has serious concerns that the proposed phase out limits set forth in S. 2387 will exclude a significant number of small businesses from this important deduction.
The 199A deduction was intended to create some parity between the tax rates for C corporations and the tax rates for pass-through entities.
Pass-through entities are already facing a significant disadvantage by the fact that, while the lower C corporation rates set in 2017 are permanent, the 199A deduction will sunset at the end of 2025.
To significantly lower the phase out, while also retaining the 2025 sunset will be extremely harmful for a wide swath of small businesses, many of which are still struggling to survive and recover from the pandemic.
The complete elimination of the deduction for taxpayers with incomes over $500,000 (with a phase out starting at $400,000) – is far too high.
EMA urged the Committees to eliminate any income threshold amount which cuts off the deduction entirely and to add a provision to make 199A permanent.