Does the New 20% Deduction for CDA Business Phaseout?

Phaseout for New 20% Deduction

If your pass-through Coeur d’Alene business is an in-favor business and it qualifies for tax reform’s new 20 percent tax deduction on qualified CDA business income, you benefit always, including being above, below, or in the expanded wage and property phase-in range.

On the other hand, if your Idaho business is a specified service trade or business (doctors, lawyers, accountants, actors, athletes, traders, etc.), it is in the out-of-favor group, and you benefit only when you are in or below the phaseout range.

Once your taxable income exceeds the threshold amounts above, you arrive in one of the four possible categories below:

1. Phase-in range for a non-specified service trade or CDA business
2. Phaseout range for a specified service trade or CDA business
3. Above the phase-in range for an in-favor non-specified service trade or CDA business
4. Above the phaseout range for an out-of-favor specified service trade or CDA business