For example, a business with $3 million in net taxable income currently benefits from a substantial QBID deduction. Without QBID, the business would lose the ability to deduct $600,000 (20% of $3 million), resulting in a significantly higher taxable income and a steep increase in tax burden, as shown in the chart below.

Key Takeaways from 2025 Scenarios on QBID

• Current Scenario: Businesses with $3 million in net income benefit from QBID, which currently lowers their taxable income by $600,000. However, the expiration of QBID would result in a sharp increase in taxable income and taxes, pushing these businesses into higher tax brackets.
• Democratic Sweep: In this scenario, the potential 12% tax increase without QBID would amount to significantly higher overall tax liability for businesses with $3 million in net income.
• Republican Sweep: If Republicans maintain control, QBID is more likely to remain in place, allowing businesses to continue benefiting from this deduction, thus keeping their tax liabilities lower for those with higher net incomes like $3 million.
• Gridlock Sunset: If tax laws revert to pre-2017 conditions, businesses with $3 million in net income could face an 11% increase in taxes without QBID.

Note: Not all companies are eligible for unlimited QBID, and the impact of the deduction can vary depending on income phase-outs, specific business circumstances, and other applicable deductions. The percentage impact on taxes will differ for each business based on its unique tax situation.