Glossary
Section 199A deduction
Also called QBI deduction
Definition
The Section 199A deduction lets eligible taxpayers deduct part of qualified business income and qualified REIT dividends. For REIT dividends it is 20%2026 · IRS, made permanent by the 2025 tax law, which lowers the effective tax rate on that income.
How Section 199A deduction works
Qualified REIT dividends are reported in box 5 of Form 1099-DIV.
Business income deductions have limits based on income, wages and business type.
Why it matters to a firm
It affects both small-business owners and income investors.
| 2026 figure | Source |
|---|---|
| Section 199A deduction on qualified REIT dividends: 20% | IRS (made permanent by the 2025 tax law) |
Calculators that use Section 199A deduction
Questions about Section 199A deduction
Does it apply in IRAs?
No benefit there.
Is it permanent?
Yes, under the 2025 tax law.
Where do I see REIT dividends?
Form 1099-DIV, box 5.
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Related terms: Asset location · Tax-equivalent yield
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