On May 22, the U.S. House of Representatives voted to pass its budget reconciliation bill, including key PIA policy priorities. The bill narrowly passed in a 215-214 vote and will now head to the Senate, where further negotiations are expected before sending a final product to the President’s desk.

Included in the legislation are provisions making permanent the qualified business income (QBI) passthrough tax deduction presently available to eligible S corporations. The bill also would increase the highest available deduction from 20 percent to 23 percent. 

Without Congressional action like the permanence provision included in the House reconciliation package, the passthrough tax deduction will expire at the end of 2025. 

Since 2017, millions of small businesses, including many PIA member agencies, have been strengthened by the extra liquidity created by the deduction. Without it, many Main Street businesses would struggle to keep employees and deliver quality service to consumers.

Additionally, the reconciliation bill provides for the reinstatement of an annual administrative and operating (A&O) inflation adjustment for crop agents. For several years, the Risk Management Agency (RMA) provided annual adjustments to crop insurance agent compensation to account for inflation. Then, in 2016, the RMA abruptly stopped providing the inflation adjustment to agents, functionally freezing their compensation in 2016 dollars indefinitely.

PIA commends members of the U.S. House for supporting independent insurance agents and will continue to advocate in support of these pro-agent provisions as the bill advances to the Senate.