Page 206 - Small Business IRS Training Guides

Qualified Business Income Deduction
HOW TO FIGURE THE DEDUCTION?

QBI COMPONENT

Reductions to the QBI Component
W-2 Wages (continued)

Short Tax Year

If there is a short tax year, use only the amounts properly reported and paid (or
deferred) during that short tax year. If the short tax year doesn't include a calendar year

ending with or within that short tax year, then wages properly reported on Form W-2 that

were paid (or deferred) during the short tax year are treated as W-2 wages for that short

tax year if they otherwise meet the requirements to be included in the W-2 wage

limitation. Treas. Reg. 1.199A-2(b)(2)(iv)(C).

Acquisition or Disposition of a Trade or Business
If the taxpayer acquires or disposes of a trade or business that causes it and another

employer to pay W-2 wages to employees of the acquired or disposed of trade or

business during the calendar year, then the W-2 wages for the calendar year of the
acquisition or disposition are allocated between each employer based on the period that
the employees of the acquired or disposed of trade or business were employed by each
employer. If the taxpayer has a short tax year that doesn’t include a calendar year

ending within their short tax year, see Short Tax Year, earlier.
Non-Duplication Rule

Amounts that are treated as W-2 wages for a tax year under any method can't be

treated as W-2 wages for any other tax year. Also, an amount can't be treated as W-2

wages by more than one trade or business.

May 2019

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