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S2962119th CongressWALLET

Small Business Investor Tax Parity Act of 2025

Sponsored By: Senator Banks, Jim [R-IN]

Introduced

Summary

Would extend the 20% qualified business income (199A) deduction to certain dividends from electing business development companies (BDCs). It would create a new category called "qualified BDC interest dividends" and treat them the same as qualified REIT dividends for purposes of the 199A deduction.

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  • Individual investors who qualify for the 199A deduction could claim a 20% deduction on BDC dividends that are attributable to the BDC's net interest income and properly allocated to a qualified trade or business.
  • Electing BDCs that are treated as regulated investment companies could make some interest-based dividend distributions more valuable to shareholders by making those payments 199A-eligible.
  • Tax filers and BDCs must identify dividends as "qualified BDC interest dividends" for the deduction. The change would apply to taxable years beginning after Dec. 31, 2026.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 1 benefits, 0 costs, 0 mixed.

Lower taxes on business development company dividends

If enacted, this bill would let you claim the section 199A (20%) deduction on certain dividends from electing business development companies. The dividend must come in the tax year and be attributable to the BDC's net interest income that is allocable to a qualified trade or business. The BDC must have an election in effect to be treated as a regulated investment company. The rule would apply to taxable years beginning after December 31, 2026.

Sponsors & CoSponsors

Sponsor

Banks, Jim [R-IN]

IN • R

Cosponsors

  • Sen. Daines, Steve [R-MT]

    MT • R

    Sponsored 2/3/2026

  • Sen. Cornyn, John [R-TX]

    TX • R

    Sponsored 3/5/2026

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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