NFIB Backs Bill to Raise Small Business Deduction to 23 Percent

April 24, 2026 - 03:40

The National Federation of Independent Business (NFIB) has announced its strong support for newly introduced legislation aimed at increasing the Small Business Deduction to 23 percent. The proposed bill, known as the Small Business Tax Cut Act, seeks to build upon the previous success of Congress in making the deduction permanent, further easing the tax burden on America’s small business owners.

The Small Business Deduction, also referred to as the Section 199A deduction, currently allows eligible businesses to deduct up to 20 percent of their qualified business income. The new legislation would raise that cap to 23 percent, providing additional financial relief to millions of small businesses across the country. NFIB officials argue that this increase is essential for helping small businesses reinvest in their operations, hire new employees, and raise wages.

“Small businesses are the backbone of our economy, and they continue to face significant challenges, from inflation to labor shortages,” said an NFIB representative. “Raising the deduction to 23 percent will give them the breathing room they need to grow and compete.”

The NFIB has long advocated for tax policies that support Main Street businesses. The organization played a key role in the original push to make the deduction permanent, and it now urges lawmakers to pass the Small Business Tax Cut Act without delay. Proponents of the bill argue that the measure will stimulate economic growth by putting more money directly into the hands of small business owners, who are more likely to reinvest locally.

Critics, however, have raised concerns about the potential impact on federal revenue. Supporters counter that the long-term economic benefits, including job creation and increased consumer spending, will offset any short-term losses. The bill has garnered bipartisan attention, though its path to passage remains uncertain in a divided Congress.

For now, the NFIB is mobilizing its membership to contact their representatives and voice support for the legislation. The organization emphasizes that every small business owner stands to benefit from the proposed increase, which could take effect as early as the next tax year if approved.