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03-07-2019
02:16 PM
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For low income taxpayers, they may be running into the taxable income limitation. The 199A (QBI) deduction is limited to the lesser of 20% of QBI or 20% of taxable income. With the higher standard deductions of $12k/$24k (plus other deductions for things like SE Health Insurance, Retirement, 1/2 SE Tax, etc), it's possible many lower income taxpayers don't have taxable income, so their only tax is SE tax. Since the 199A deduction doesn't impact SE tax, you wouldn't see a change.
In terms of how the program works, as long as they're below the income threshold ($157,500/$315,000), then checking Yes in the QBI smart wksht at the bottom of Sch C should be all you need to do for the 199A deduction to calculate.