The deduction continues after 2025. It is not a deduction from self-employment tax and does not make every dollar of business profit eligible. Owner wages and certain other income are excluded from QBI.
Taxable income, filing status, business type, W-2 wages, qualifying property and net capital gain can affect the result. Above the applicable income thresholds, different rules apply to specified service businesses and other businesses. Use the current Form 8995 or 8995-A instructions rather than multiplying total revenue by 20%.
An example
Hypothetical: $80,000 of eligible QBI produces a tentative $16,000 deduction before the taxable-income limit and other adjustments. This is a deduction, not $16,000 of tax savings.
Reviewed October 7, 2026. IRS reference ↗
This is a general reference. Discuss how the rules apply to your business with your tax professional.