On July 18, Congressman Lloyd Smucker (R-PA) introduced H.R. 4721, the “Main Street Tax Certainty Act of 2023,” which would make permanent the 20 percent tax deduction currently available to some passthrough entities. PIA strongly supports this legislation, and in advance of its introduction joined a coalition of business groups in a letter of support for the bill.
PIA successfully advocated for the 2017 tax law (Public Law No. 115-97) to apply to insurance agents, allowing those organized as subchapter S corporations, also known as “passthrough” organizations, to receive more favorable tax treatment. The law added Section 199A to the tax code, establishing a tax deduction for qualifying small business owners. Many PIA member agencies are organized as S corporations and have benefited from the eased tax burden resulting from the Section 199A deduction.
However, while the tax relief provided through the 2017 tax law to entities organized as C corporations was made permanent, the passthrough deduction is only temporary and will sunset after December 31, 2025. This means that eligible PIA members will no longer receive the current tax benefit after that date without congressional action. By making this tax deduction permanent for passthrough corporations, the Main Street Tax Certainty Act will provide a stable and predictable future in the tax liability of eligible passthrough corporations.
PIA strongly supports this legislation as well as its companion bill in the Senate introduced earlier this year.
PIA has developed an action alert that PIA members can send to their Senators and House member asking them to cosponsor the Main Street Tax Certainty Act. It’s important to grow the number of cosponsors of this legislation so please take action today.