2022 QBI Deduction Threshold
For 2022, the QBI Deduction Threshold is $340,100 (Threshold, joint filers), $170,050 (Threshold, single filers), $440,100 (Phase-in range top, joint filers) and $220,050 (Phase-in range top, single filers).
| Item | Joint filers | Single filers |
|---|---|---|
| Threshold | $340,100 | $170,050 |
| Phase-in range top | $440,100 | $220,050 |
Effective 2022-01-01Source: Rev. Proc. 2021-45 (IRS)Verified 2026-08-29
Compared with 2021
| Item | 2021 | 2022 | Change |
|---|---|---|---|
| Threshold, joint filers | $329,800 | $340,100 | +$10,300 (+3.1%) |
| Threshold, single filers | $164,900 | $170,050 | +$5,150 (+3.1%) |
| Phase-in range top, joint filers | $429,800 | $440,100 | +$10,300 (+2.4%) |
| Phase-in range top, single filers | $214,900 | $220,050 | +$5,150 (+2.4%) |
Who it applies to
Taxpayers who claim the qualified business income deduction under IRC § 199A for taxable years beginning in 2022.
What changed this year, and why
For taxable years beginning in 2022, the income thresholds and phase-in ranges for the qualified business income (QBI) deduction under IRC § 199A were adjusted for inflation.
Common questions
- What is the QBI deduction threshold for 2022?
- For joint filers, the threshold is $340,100. For single filers, the threshold is $170,050.
- What is the phase-in range for the QBI deduction?
- The phase-in range runs from $340,100 to $440,100 for joint filers and from $170,050 to $220,050 for single filers.
Above the threshold, the wage and property limits phase in
Taxpayers with taxable income above the threshold but below the phase-in range top must gradually apply the wage and property limits to their qualified business income. For joint filers the phase-in range runs from $340,100 to $440,100, and for single filers and other returns it runs from $170,050 to $220,050. Within that band the reduction to QBI is phased in proportionally, so the wage and property caps only partially limit the deduction. Once taxable income exceeds the phase-in range top, the full reduction applies without any phase-in benefit.
Above the threshold but below the phase-in range (more than $340,100 and $440,100 if married filing jointly, and $170,050 and $220,050 for all other returns), the reduction is phased in;
2022 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
What the reduction is measured against
When taxable income exceeds the threshold, the QBI from each trade or business may be reduced to the greater of two amounts. The first is 50% of the W-2 wages the business paid. The second is 25% of those W-2 wages plus 2.5% of the unadjusted basis of qualified property held by the business. This wage-and-property limit caps the deduction for higher-income taxpayers, ensuring the benefit is tied to actual payroll or depreciable assets rather than purely pass-through income.
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.
2022 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
Specified service businesses above the range
Specified service trades or businesses, or SSTBs, are generally ineligible for the QBI deduction when a taxpayer's taxable income exceeds both the threshold and the phase-in range. This means that once income is above the applicable range, income from SSTBs such as law, accounting, health, consulting, and financial services cannot be included in qualified business income for purposes of calculating the deduction. The rule is designed to limit the benefit to active business income from non-service activities for higher-income taxpayers. However, taxpayers with taxable income at or below the threshold may still claim the deduction on SSTB income without restriction. The determination of whether a trade or business qualifies is made based on the nature of the activity and the taxpayer's income level.
Specified service trades or businesses (SSTBs) aren’t qualified trades or businesses for taxpayers with taxable income, before the QBI deduction, above the threshold and phased-in range.
2022 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
The deduction is also capped by taxable income
The total QBI deduction cannot exceed 20% of the taxpayer's taxable income, calculated before the deduction, minus any net capital gain. This overall ceiling applies regardless of filing status or the amount of qualified business income generated. Even if the underlying QBI component and the wage-and-property calculation produce a large figure, the deduction is capped at this taxable-income-based limit. The rule ensures the deduction is measured against the taxpayer's total economic income rather than only the income from pass-through activities.
However, 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.
2022 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.
Rev. Proc. 2021-45 (IRS)
- Threshold, joint filers
Married Individuals Filing Joint Returns $340,100 $440,100
- Threshold, single filers
All Other Returns $170,050 $220,050
- Phase-in range top, joint filers
Married Individuals Filing Joint Returns $340,100 $440,100
- Phase-in range top, single filers
All Other Returns $170,050 $220,050