2028 QBI 199A Deduction
2028 199A QBI deduction: 20% of qualified business income. Phase-in: single $256k-$306k / MFJ $512k-$612k projected. SSTB cliff above upper threshold.
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The 2028 Section 199A QBI deduction provides up to 20% off qualified business income from pass-through entities. Phase-in thresholds: single $256k-$306k / MFJ $512k-$612k (projected with CPI). Above threshold, SSTB (services) face cliff. Non-SSTB face W-2 wage + UBIA limits. OBBB (July 2025) made 199A permanent.
OBBB Made 199A Permanent
199A was set to sunset Dec 31, 2025 under TCJA. Pass-through service businesses (law firms, medical practices, consultants) were scheduled to lose the 20% deduction at end of 2025. OBBB July 4, 2025 made it permanent + indexed thresholds. Massive win for pass-through entities.
SSTB Cliff
Specified Service Trade or Business = health, law, accounting, actuarial, performing arts, athletics, financial services, brokerage, consulting, investing/investment management. Above upper threshold (~$306k single / ~$612k MFJ in 2028), SSTBs get zero 199A. Non-SSTBs continue with W-2 wage + UBIA limits but no cliff.
Non-SSTB Wage Limit
Above threshold, deduction limited to greater of: (a) 50% of W-2 wages paid OR (b) 25% W-2 wages + 2.5% UBIA (unadjusted basis immediately after acquisition of qualified property). Encourages capital-intensive non-SSTBs to hire and invest.
Aggregating + Trade-Or-Business
Multiple businesses can aggregate if same ownership + 'common business purpose'. SSTB activities cannot be 'crack and pack' (artificial split). Rental real estate qualifies if rises to trade-or-business level — safe harbor 250 hours of service/year.
Last updated May 2026. Sources: IRS QBI.