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QBI Deduction Calculator for 2026

See how taxable income, business type, wages, and qualified property interact. Includes the 2026 active-business minimum for supported below-threshold cases.

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Enter your 2026 inputs

Illustrative starting values are prefilled, including the material-participation selection. Replace them with your own inputs and confirm each assumption.

Your calculation

2026 Section 199A deduction
$20,000
Regular deduction before minimum
$20,000
Supported active-business minimum
$400
Business component after phase-in
$20,000
Eligible REIT/PTP deduction component
$0
Taxable-income cap on regular deduction
$36,000
Wage/property limit before phase-in
$0
Phase-in percentage
0.0%
Business QBI loss carried forward
$0
REIT/PTP loss carried forward
$0

Threshold: $201,750. Phase-in range: $75,000. The regular deduction is subject to the income cap; a qualifying 2026 minimum is applied afterward.

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Educational estimate, updated September 29, 2026. Educational, not individualized tax advice. Single qualified business; entered QBI and allocable wages/property are already adjusted under Section 199A. Net capital gain input includes qualified dividends. REIT/PTP input is the separately determined eligible component. 2026 minimum implementation follows draft IRS instructions. Above-threshold minimum edge cases stop; multiple-business aggregation, cooperative rules and PTP SSTB adjustments are excluded.

Worked example

A non-SSTB owner below the 2026 threshold

A single filer has $100,000 of adjusted qualified business income from one business that is not a specified service trade or business, and $180,000 of taxable income before the QBI deduction. There is no capital gain, no payroll, no qualified property and no prior QBI loss. The owner materially participates.

Inputs

Worked example inputs
Filing statusSingle
Taxable income before QBI deduction$180,000
Adjusted current-year QBI$100,000
Net capital gain plus qualified dividends$0
Allocable W-2 wages and UBIA$0 and $0
SSTBNo
Materially participatesYes

Calculator output

Worked example calculator output
2026 Section 199A deduction$20,000
Regular deduction before minimum$20,000
Taxable-income cap on regular deduction$36,000
Supported active-business minimum$400
2026 threshold$201,750
Phase-in percentage0.0%

Taxable income is below the $201,750 threshold, so the wage and property limit does not apply. The deduction is 20% of $100,000, or $20,000, which is under the cap of 20% of $180,000 ($36,000). The $400 minimum is available but smaller, so the regular deduction controls.

Methodology

How this calculator works

The calculator follows the single-business Section 199A ordering on Form 8995-A: applicable percentage for an SSTB, loss carryforward, wage and property limit with the phase-in, the REIT and PTP component, the taxable-income cap, then the 2026 minimum.

Formulas

  • Phase-in percentage = (taxable income minus threshold) / phase-in range, from 0% to 100%. Range: $150,000 joint, $75,000 other returns.
  • SSTB applicable percentage = 100% minus the phase-in percentage; it scales QBI, W-2 wages and UBIA.
  • Business component = 20% x (QBI minus prior loss carryforward), reduced by the phase-in percentage times the excess over the greater of 50% of W-2 wages or 25% of wages plus 2.5% of UBIA.
  • Regular deduction = lesser of (business component + 20% of REIT/PTP income) or 20% x (taxable income minus net capital gain).
  • Deduction = greater of the regular deduction or $400 when the owner materially participates, QBI is at least $1,000 and taxable income is at or below the threshold.

Assumptions

  • One qualified business; QBI, wages and UBIA are already determined under Section 199A and its regulations.
  • Taxable income is before the QBI deduction; the net capital gain input includes qualified dividends.
  • The $400 minimum follows the 2026 draft Form 8995 instructions, which can change before final forms are released.

What it ignores

  • Aggregation and multiple businesses, cooperatives and PTP SSTB adjustments (the tool stops instead).
  • Whether a business is an SSTB, and whether the owner materially participates.
  • Above-threshold minimum-deduction edge cases, which stop for a full determination.

Sources

Primary sources

  1. 26 U.S. Code Section 199A: qualified business income: 20% deduction, taxable-income cap, wage and UBIA limit, SSTB rules and the $400 minimum
  2. Treasury Regulation 1.199A-1: operational rules and computation: ordering, loss carryforwards and the phase-in
  3. Treasury Regulation 1.199A-5: specified service trades or businesses
  4. Revenue Procedure 2025-32, section 4.26: 2026 threshold and phase-in amounts
  5. Enacted Section 199A changes: Public Law 119-21, Section 70105
  6. Form 8995-A instructions: wage/property and SSTB ordering (2025)
  7. 2026 draft Form 8995 instructions: minimum deduction implementation (draft; subject to change)

Written by Bryan Martin, CPA, Managing Partner and Founder of Taxstra. Last reviewed October 20, 2026. Taxstra is a CPA firm serving 1,000+ clients in all 50 states.

Educational, not individualized tax advice.

Written by Bryan Martin, CPA, Managing Partner and Founder of Taxstra. Last updated October 20, 2026.

Find the limit that changes the deduction

The Section 199A calculation begins with qualified business income, not revenue, gross profit, or cash in the bank. This single-business model uses enacted 2026 thresholds and separately displays its regular deduction, taxable-income cap, and supported minimum deduction.

  1. STEP 01

    Use return-level inputs

    Enter taxable income before the QBI deduction, after applicable deductions. QBI should already reflect allocable adjustments such as the deductible portion of self-employment tax and eligible retirement or health-insurance deductions. Employee wages, S-corporation reasonable compensation, and guaranteed payments generally are not QBI. Net capital gain for the taxable-income limit includes qualified dividends.

  2. STEP 02

    Apply the business limits in order

    For 2026, the threshold is $403,500 for joint returns, $201,775 for married filing separately, and $201,750 for single or head of household. Wage/property limits phase in across $150,000 on joint returns and $75,000 on other supported returns. Within that range an SSTB first reduces eligible QBI, wages, and property by its applicable percentage; above the range the SSTB business component is zero.

  3. STEP 03

    Check the minimum and carryforwards

    Beginning in 2026, qualifying active-business taxpayers may have a $400 minimum deduction with at least $1,000 of aggregate active QBI. Current-year QBI controls this eligibility rather than QBI after prior loss carryforwards, following the 2026 draft instructions. The minimum has no income threshold, but a specified service business past the phase-in range is not a qualified business, so it gets no minimum; one inside the phase-in range stops for full analysis. Draft form implementation can change before final forms are released.

Worked QBI examples

Educational 2026 examples for a single taxpayer; inputs are already adjusted QBI and taxable income before Section 199A.

Swipe horizontally to compare

ScenarioQBITaxable incomeKey constraintDeduction
Below threshold$100,000$180,000No capital gain; no prior losses$20,000
Taxable-income cap$100,000$90,000$20,000 net capital gain plus qualified dividends$14,000
Active-business minimum$1,500$50,000Material participation; no special adjustments$400 rather than the regular $300

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Frequently asked questions

Is the QBI deduction still available in 2026?

Yes. Public Law 119-21 made Section 199A permanent and expanded the phase-in ranges beginning in 2026. Eligibility and limitations still depend on the trade or business and the complete return.

Does every business get a 20% deduction?

No. The deduction can be reduced by taxable-income limits, prior QBI losses, SSTB rules, and wage/property limitations. This tool shows those supported steps separately.

Are physicians and consultants SSTBs?

Many health and consulting businesses fall within specified-service categories, but classification depends on the actual business. Select SSTB only after confirming the applicable category. This tool does not determine classification.

What counts as W-2 wages?

Use wages properly allocable to the qualified business under Section 199A, not household wage income or owner distributions. This tool assumes the entered amount has already been determined under the applicable rules.

What is UBIA?

UBIA is unadjusted basis immediately after acquisition of qualified property under Section 199A. It differs from the remaining depreciated tax basis used in a sale calculation; eligibility and the property period matter.

Does this cover multiple businesses?

No. Aggregation, cross-business loss allocation, cooperative patron reductions, and PTP SSTB adjustments require the full Form 8995-A process. Selecting those exceptions stops the result rather than presenting a misleading deduction.

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