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PIA National Testimony Urges Pass-Through Clarification

PIA National submitted testimony to the House Ways and Means Subcommittee on Tax Policy.
June 5, 2018

PIA National submitted testimony to the House Ways and Means Subcommittee on Tax Policy for its hearing, “Tax Reform and Small Business: Growing Our Economy and Creating Jobs.” In it, PIA requests that lawmakers work to permit owners of independent insurance agencies to benefit from the maximum allowable pass-through deduction. One way to ensure that agents can legally avail themselves of the deduction would be to include clarifying language in any technical bill that is passed by Congress.

“The tax reform bill was touted as a move toward tax relief for small businesses, but its effect will be substantially curtailed if the pass-through provision is not clarified to include small businesses like insurance agencies,” noted PIA in its testimony.

While the new tax law provides a deduction that will result in savings for some pass-through entities, the benefit is limited by an income threshold and a categorical exclusion that may prevent some PIA members with pass-throughs from benefitting from the new deduction. Whether insurance agencies are excluded may remain unknown until the IRS issues regulations or guidance pertaining to the new law.

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