Limitations to the qualified business income deduction

The following limitations apply to the qualified business income deduction (QBID).
  1. It can't exceed the taxpayer’s taxable income (after net capital gain) for the tax year.
  2. 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.
  3. 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 the
    Specified service business
    field 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.
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