Reference · Tax year 2026 · US federal
QBI Deduction Thresholds 2026
Below the threshold the deduction is a straightforward 20%. Above it, limitations based on W-2 wages and property phase in — and for a solo operator with no employees, they phase the deduction out entirely.
| Value | What it is | Source | Verified |
|---|---|---|---|
| 20% | Qualified business income deduction rate | IRS | |
| $400 | Section 199A minimum deduction | IRS | |
| $1,000 | Minimum QBI required to claim the deduction | IRS | |
| $201,750 | QBI threshold, single | IRS | |
| $403,500 | QBI threshold, married filing jointly | IRS | |
| $201,775 | QBI threshold, married filing separately | IRS | |
| $201,750 | QBI threshold, head of household | IRS | |
| $276,750 | QBI phase-in ceiling, single | IRS | |
| $553,500 | QBI phase-in ceiling, married filing jointly | IRS |
Notes
- New for 2026: at least $1,000 of qualified business income earns a deduction of at least $400, even where the ordinary 20% computation gives less.
- The thresholds for single and head of household are $201,750; married filing separately is $201,775. Those twenty-five dollars are real and not a transcription error.
- A specified service trade or business — consulting, law, accounting, health, financial services — is excluded entirely above the phase-in ceiling, and the $400 minimum cannot rescue it.
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