2026 QBI Deduction Calculator
Calculate your 20% Section 199A pass-through deduction under IRS Revenue Procedure 2025-32 and OBBBA amendments. Models the $201,750 / $403,500 thresholds, SSTB phase-in bands, and the new $400 minimum floor.
Section 199A Deduction Engine
Bound to 20% statutory rate, OBBBA phase-in ranges, and $400 statutory floorHow the 2026 Section 199A QBI deduction works
The Section 199A Qualified Business Income (QBI) deduction allows eligible self-employed individuals, sole proprietors, LLC members, and S-corporation shareholders to deduct up to 20% of their net qualified business income from federal taxable income.
The Three Statutory Income Zones
Below the Threshold ($201,750 / $403,500)
If your taxable income is below $201,750 (Single) or $403,500 (MFJ), the calculation is simple: you receive the full 20% deduction. No W-2 wage or property limits apply, and Specified Service businesses (SSTBs) are fully eligible.
The OBBBA Phase-In Band ($75,000 / $150,000)
The One Big Beautiful Bill Act (OBBBA §70105) widened the phase-in band for 2026 to $150,000 for MFJ and $75,000 for single filers. Within this range, SSTB deductions phase down and wage/UBIA caps phase in proportionally.
Above the Upper Bound
Above the phase-in band, SSTBs receive $0 deduction. Non-SSTB businesses must satisfy the W-2 wage / UBIA limitation: the deduction is limited to the greater of 50% of W-2 wages or 25% of W-2 wages plus 2.5% of qualified property.
The New $400 Minimum Floor
Under OBBBA amendments effective 2026 (Rev. Proc. 2025-32 §2.12), taxpayers with at least $1,000 of active business QBI are guaranteed a minimum deduction of $400, even if phase-out or wage limitations would otherwise reduce it.
The formulas, and where each number comes from
Section 199A deduction formulas depend on taxable income before the deduction (`TI`) and net capital gains:
1. Tentative QBI Deduction = 20% × Qualified Business Income (QBI)
2. Overall Taxable Income Ceiling = 20% × Max(0, Taxable Income − Net Capital Gains)
3. Zone 1 (TI ≤ $201,750 Single / $403,500 MFJ):
Deduction = Min(Tentative QBI, Overall Ceiling)
4. Zone 2 (Phase-In Range):
Phase-In % = (TI − Threshold) / Band Width ($75,000 Single / $150,000 MFJ)
Applicable % = 1 − Phase-In %
SSTB: QBI, Wages, & UBIA scaled by Applicable %; limitation ramps across the band
5. Zone 3 (Above Upper Bound):
SSTB = $0 Deduction
Non-SSTB = Min(Tentative QBI, Max(50% × W-2 Wages, 25% × Wages + 2.5% × UBIA), Overall Ceiling)
6. Minimum Floor: If Active QBI ≥ $1,000 and Deduction < $400, Deduction = Min($400, Overall Ceiling) Two worked examples
Non-SSTB freelance designer below threshold ($80,000 QBI)
- Qualified Business Income: $80,000
- Taxable Income (before QBI): $70,000
- Filing Status / Threshold: Single ($201,750)
- Tentative 20% QBI: $16,000
- Taxable Income Ceiling (20% of $70k): $14,000
- Final Section 199A Deduction: $14,000
SSTB consultant in phase-in band ($150,000 QBI / $230,000 Taxable Income)
- Qualified Business Income: $150,000
- Taxable Income (before QBI): $230,000
- Phase-In Band: $201,750 – $276,750
- SSTB Applicable Percentage: 62.3%
- Phase-Out Reduction Applied: Yes
- Final Section 199A Deduction: $11,656