A release of proposed regulations regarding IRS Section 199A promised for June has been delayed until the end of July.
These rules provide pass-through entities (which include S corporations, limited liability companies, partnerships, and sole proprietorships) with a new 20 percent deduction on “qualified business income” under certain circumstances and are one of the top priorities in the roll out of regulations to implement the 2017 Tax Cuts and Jobs Act.
Unfortunately, for the small businesses who are eagerly awaiting these proposed rules it’s possible there will be a further delay. Because there are so many unanswered questions with the new Section 199A, including even the most fundamental question of whether a particular business is considered a service business and thus subject to more stringent rules, it is unlikely that all of the guidance and proposed regulations will be issued at one time.
SAF’s longtime partner The Small Business Legislative Council (SBLC) is working on a Section 199A primer for small businesses but has been waiting to release it pending disclosure of the proposed rules. SAF will keep you informed about the primer as soon as it is completed.
