The guidance is issued under the 2017 Tax Cuts and Jobs Act) and the Consolidated Appropriations Act of 2018. The proposed regulations involve the deduction for qualified business income., Notice 2019-27 (PDF), contains a proposed revenue procedure providing guidance on methods for calculating W-2 wages.
The QBI deduction is available for tax years beginning after Dec. 31, 2017 for taxpayers, including patrons of cooperatives, with income from a domestic business operated as a sole proprietorship, a partnership, S corporation, trust or estate. The QBI deduction is up to 20 percent of the qualified business income from the business.
Farmers receiving patronage dividends from the sale of agricultural products through a cooperative may be able to include the dividends in calculating the QBI deduction. Some farmers must reduce QBI deduction either 9 percent the QBI from each business related to the qualified payments, or 50 percent of the wages allocated to each business, whichever is the smaller amount.Last modified on Tuesday, 18 June 2019