Final regulations under section 199A released to Federal Register

The U.S. Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9847) and proposed regulations (REG--134652-18) under section 199A—the provision enacted under the December 2017 tax law that allows certain owners of sole proprietorships, partnerships, trusts, and S corporations to deduct 20% of their qualified business income.

Read text of the final regulations [PDF 800 KB] (247 pages) and text of the proposed regulations [PDF 234 KB] under section 199A. These regulations are scheduled to appear in the Federal Register on February 8, 2019.

The final regulations concern and finalize regulations that were proposed in August 2018 and generally apply to tax years ending after the publication of the final regulations in the Federal Register.

Advance versions of final regulations

The IRS and Treasury previously released a version of these final regulations on January 18, 2019 (during the partial government shutdown). That version of the regulations was posted on the IRS website and includes the following statement:

This document will be submitted to the Office of the Federal Register (OFR) for publication. The version of the final rule released today may vary slightly from the published document if minor editorial changes are made during the OFR review process. The document published in the Federal Register will be the official document.

The IRS and Treasury then issued a replacement version of those regulations on February 1, 2019. Read TaxNewsFlash

KPMG reports on previous versions of these regulations

KPMG previously provided a report containing analysis and observations about the final regulations under section 199A (based on the version of the regulations released by the IRS and Treasury on January 18, 2019). Read TaxNewsFlash

KPMG also previously provided a report containing analysis and observations about the proposed regulations that relate to the treatment under section 199A of dividends paid by real estate investment trusts (REITs). The KPMG report was based on the version of the proposed regulations released by the IRS and Treasury on January 18, 2019. Read TaxNewsFlash

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