QBI Deduction (199A) After OBBBA: $400 Minimum | HelloBooks The 20% QBI deduction continues, a $400 minimum starts in 2026, and the income thresholds rise. What to check on Form 8995 for owner clients.
The 20% qualified business income deduction did not expire after 2025. The Form 8995 instructions add a minimum deduction from 2026 and the income thresholds rise again with inflation.
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Minimum deduction from 2026
$400
Applies: Minimum from tax year 2026From IRS.gov · checked October 10, 2026
The deduction stays at 20% of qualified business income. From tax year 2026, a taxpayer with at least $1,000 of QBI gets a deduction of at least $400.
The thresholds where the wage and property limits and the specified service rules start to bite are $201,750 single and $403,500 joint for 2026, up from $197,300 and $394,600 for 2025.
The $400 floor matters for side businesses and small sole proprietors whose 20% deduction would otherwise be tiny. For owners near the thresholds, the planning work is unchanged: wages paid, unadjusted basis of property and whether the business is a specified service trade.
Owners with more than one activity need QBI computed per business. Keep a separate set of income and expense accounts for each activity, or separate books, so each trade or business shows its own net income, W-2 wages and property.
The plain-English summary for business owners
By client type · S corporation owners
By client type · partnerships and LLCs
Business returns · loss limits
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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