Limitations to the qualified business income deduction
The following limitations apply to the qualified business income deduction (QBID).
- It can't exceed the taxpayer’s taxable income (after net capital gain) for the tax year.
- Taxpayers with taxable income that exceeds $340,100 ($170,050 for single returns) are subject to limitations based on W2 wages paid by the business and the business’ unadjusted basis in acquired (UBIA) qualified property.
- A specified service trade or business doesn't qualify for the deduction unless the taxable income is less than the sum of the $340,100 ($170,050 for single returns) threshold plus $100,000 ($50,000 for single returns). UltraTax CS doesn't automatically determine if a business qualifies for this status. Mark theSpecified service businessfield on the C-3, K1-7, or K1T-3 screen to apply these threshold amounts when the Qualified Business Deduction – Simplified Worksheet isn't calculating the deduction.
