What are the 2026 QBI deduction thresholds?
For taxable years beginning in 2026, the section 199A threshold is $403,500 for joint returns, $201,775 for married filing separately and $201,750 for all other returns. The limits phase in fully at $553,500, $276,775 and $276,750, a wider range than in 2025.
Sources checked . Current through .
2026 thresholds and phase-in ranges
Below the threshold, the W-2 wage and property limits and the specified service trade or business (SSTB) rules don't apply. Between the threshold and the top of the phase-in range, they phase in. Above the range, they apply in full.
| Filing status | 2026 threshold | Fully phased in at | 2025 threshold | 2025 fully phased in at |
|---|---|---|---|---|
| Married filing jointly | $403,500 | $553,500 | $394,600 | $494,600 |
| Married filing separately | $201,775 | $276,775 | $197,300 | $247,300 |
| All other returns | $201,750 | $276,750 | $197,300 | $247,300 |
What the 2025 law changed
- Wider phase-in range: The range is now $150,000 for joint returns and $75,000 for others (IRC §199A(b)(3)(B)). In 2025 it was $100,000 and $50,000, as the 2025 table shows.
- A $400 minimum deduction: Section 70105 of the One Big Beautiful Bill Act added a minimum deduction of $400 under IRC §199A(i). To qualify, the taxpayer needs at least $1,000 of qualified business income. This starts with taxable years beginning after December 31, 2025, and both amounts are inflation-adjusted after 2026.
The basic deduction
The deduction for each qualified trade or business is the lesser of 20% of its qualified business income or the W-2 wage and property limit. On top of that, 20% of qualified REIT dividends and qualified publicly traded partnership income is added (IRC §199A(b)). The wage and property limit only matters once taxable income passes the threshold.
Sources
- Rev. Proc. 2025-32, §4.26 and §2.12: 2026 inflation adjustments (2025-45 IRB)
- Rev. Proc. 2024-40, §2.27: 2025 inflation adjustments (2024-45 IRB)
- IRC §199A(b)(3)(B): Phase-in of limit for certain taxpayers
Not tax advice. Check the sources against your client's facts before relying on this.