2019 QBI Deduction Threshold
For 2019, the QBI Deduction Threshold is $321,400 (Threshold, joint filers), $160,700 (Threshold, single filers), $421,400 (Phase-in range top, joint filers) and $210,700 (Phase-in range top, single filers).
| Item | Joint filers | Single filers |
|---|---|---|
| Threshold | $321,400 | $160,700 |
| Phase-in range top | $421,400 | $210,700 |
Effective 2019-01-01Source: 2019 Instructions for Form 8995-A (IRS)Verified 2026-08-29
Compared with 2018
| Item | 2018 | 2019 | Change |
|---|---|---|---|
| Threshold, joint filers | $315,000 | $321,400 | +$6,400 (+2.0%) |
| Threshold, single filers | $157,500 | $160,700 | +$3,200 (+2.0%) |
| Phase-in range top, joint filers | $415,000 | $421,400 | +$6,400 (+1.5%) |
| Phase-in range top, single filers | $207,500 | $210,700 | +$3,200 (+1.5%) |
Who it applies to
Individuals, estates, and trusts that claim the qualified business income deduction under section 199A
What changed this year, and why
The qualified business income (QBI) deduction thresholds for tax year 2019 were set at $321,400 for joint filers and $160,700 for single filers. These figures determine whether income- or wage-based limitations apply to the deduction.
Common questions
- What does the QBI deduction threshold determine?
- The QBI deduction threshold is the taxable income level above which the deduction may be limited by factors such as wages paid by the business, the unadjusted basis of qualified property, and whether the business is a specified service trade or business. Below the threshold, these limitations generally do not apply.
- What is the phase-in range?
- Taxable income above the threshold but not exceeding the phase-in range top causes the limitations to be phased in gradually. Income above the phase-in range top means the full limitations apply.
- How did the 2019 thresholds compare to 2018?
- The 2018 threshold was $315,000 for joint filers and $157,500 for single filers. The 2018 phase-in range topped out at $415,000 for joint filers and $207,500 for single filers.
Above the threshold, the wage and property limits phase in
When taxable income exceeds the threshold, the wage and property limits don't apply in full right away. Instead, the reduction phases in over a range. For joint filers, this range spans from $321,400 up to $421,400. For single filers, it runs from $160,700 up to $210,700. Within that range, only a portion of the full wage and property limitation applies, and the applicable portion grows as income rises. Once taxable income reaches the top of the phase-in range, the full reduction is in effect. Taxpayers whose income falls between the threshold and the top of the range calculate their deduction using this partial version of the limit rather than the full version. Those whose income stays at or below the threshold do not need to reduce their qualified business income at all.
Above the threshold but below the phase-in range (more than $160,725 but not $210,725 if married filing separately or a married nonresident alien; $321,400 and $421,400 if married filing jointly; $160,700 and $210,700 for all others), the reduction is phased in
2019 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
What the reduction is measured against
When taxable income exceeds the threshold, the qualified business income deduction may be reduced. The reduction is measured against the greater of two alternative amounts. The first alternative is 50% of W-2 wages paid by the qualified trade or business. The second alternative is 25% of W-2 wages plus 2.5% of the unadjusted basis immediately after acquisition of qualified property from the qualified trade or business. The taxpayer uses whichever of these two figures is larger. The unadjusted basis immediately after acquisition refers to the original cost of depreciable property held by the business. These wage and property limits serve as a cap on how much qualified business income can be deducted once the taxpayer's income surpasses the threshold. If the business has significant wages or substantial depreciable assets, the limit will be higher and allow a larger deduction.
your QBI for each of your trades or businesses may be partially or fully reduced to the greater of 50% of W-2 wages paid by the qualified trade or business, or 25% of W-2 wages plus 2.5% of the UBIA of qualified property from the qualified trade or business.
2019 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
Specified service businesses above the range
A specified service trade or business is one that provides services in fields such as health, law, accounting, consulting, financial services, or performing arts. When a taxpayer's taxable income exceeds the threshold plus the phase-in range - meaning income above $421,400 for joint filers or above $210,700 for single filers - the specified service trade or business is completely excluded from the definition of a qualified trade or business. As a result, none of the income, wages, or qualified property from that service business can be taken into account when calculating the qualified business income deduction. This means taxpayers operating specified service businesses above this income level receive no deduction at all from those activities. The exclusion is total once income surpasses the phase-in range top, distinguishing it from the partial phase-in that applies at lower income levels.
SSTBs generally are excluded from the definition of a qualified trade or business if the taxpayer's taxable income exceeds the threshold plus the phase-in range.
2019 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
The deduction is also capped by taxable income
The qualified business income deduction cannot exceed 20% of the taxpayer's taxable income, calculated before the deduction and minus any net capital gain. This overall limit applies regardless of whether the taxpayer's income is above or below the threshold. Even if a taxpayer has substantial qualified business income, wages, or property that would otherwise support a larger deduction, the final amount is capped at 20% of taxable income minus net capital gain. This ceiling ensures the deduction remains proportional to the taxpayer's overall income. The limitation is calculated after determining the qualified business income component, including any reductions from the wage and property limits or the specified service business exclusions, and after adding any qualified real estate investment trust or publicly traded partnership components.
the deduction is limited to the lesser of this amount or 20% of your taxable income, calculated before the QBI deduction, minus your net capital gain.
2019 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2019 Instructions for Form 8995-A (IRS)
- Threshold, joint filers
exceeds the threshold ($160,725 if married filing separately or a married nonresident alien; $321,400 if married filing jointly; $160,700 for all others)
- Threshold, single filers
exceeds the threshold ($160,725 if married filing separately or a married nonresident alien; $321,400 if married filing jointly; $160,700 for all others)
- Phase-in range top, joint filers
phase-in range (more than $160,725 but not $210,725 if married filing separately or a married nonresident alien; $321,400 and $421,400 if married filing jointly; $160,700 and $210,700 for all others)
- Phase-in range top, single filers
phase-in range (more than $160,725 but not $210,725 if married filing separately or a married nonresident alien; $321,400 and $421,400 if married filing jointly; $160,700 and $210,700 for all others)