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Tax relief for small business investors: BDC dividends treated like REITs.

This Act extends the qualified business income deduction (Section 199A) to include interest dividends paid by electing Business Development Companies (BDCs). This means individual investors receiving income from BDC investments, which typically finance small and medium-sized businesses, will be able to deduct a portion of that income from their taxes. The change aims to incentivize investment in small businesses and will take effect for taxable years beginning after December 31, 2024.
Key points
New Tax Deduction: Investors receiving interest dividends from qualified Business Development Companies (BDCs) will be able to deduct a portion of this income from their federal taxes.
Equal Treatment: BDC dividends will be treated the same as Real Estate Investment Trust (REIT) dividends for the purpose of the qualified business income deduction.
Support for Small Businesses: The change is designed to make investing in BDCs, which provide capital to small and mid-sized firms, more attractive, potentially increasing funding for these businesses.
Effective Date: The amendments will apply to taxable years beginning after December 31, 2024.
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Additional Information
Print number: 118_HR_5225
Sponsor: Rep. Arrington, Jodey C. [R-TX-19]
Process start date: 2023-08-18
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OFFICIAL LEGAL TITLE

Small Business Investor Tax Parity Act of 2023

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_HR_5225.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2023-08-18.

What are the main provisions?

Key points include:

  • New Tax Deduction: Investors receiving interest dividends from qualified Business Development Companies (BDCs) will be able to deduct a portion of this income from their federal taxes.
  • Equal Treatment: BDC dividends will be treated the same as Real Estate Investment Trust (REIT) dividends for the purpose of the qualified business income deduction.
  • Support for Small Businesses: The change is designed to make investing in BDCs, which provide capital to small and mid-sized firms, more attractive, potentially increasing funding for these businesses.
  • Effective Date: The amendments will apply to taxable years beginning after December 31, 2024.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Arrington, Jodey C. [R-TX-19].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-30.

CATEGORIES

Taxes Economy