​In January, the Internal Revenue Service issued final regulations concerning a new tax deduction for “qualified business income” under Section 199A of the tax code. The Big “I” lobbied aggressively on this regulation as it is critically important for owners and shareholders of insurance agencies and brokerages organized as pass-through entities, such as partnerships and S-corporations.

The rule confirms that agency and brokerage owners and shareholders are eligible for a tax deduction of up to 20% on qualified business income—regardless of taxable income level. The new deduction reduces the top effective tax rate on pass-through income to approximately 29% from 37%. For those in the 24% bracket, it can reduce the rate to as low as 19.2%.

In response to the regulation, the Big “I” has posted multiple new resources for members on the National Big “I” website (Gov. Affairs page). Big “I” members must log in to view the materials, which include:

While a major victory Big “I” members, the regulations are complex. The Big “I” encourages members—especially those who derive income from non-traditional activities—to consult a tax professional to determine how the new deduction specifically impacts their businesses.​