Washington, D.C. (Jan. 22, 2019)—Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on the Treasury Department’s final rule expanding access to the 20 percent tax deduction for pass-through businesses.
“Subchapter S community banks will have significantly expanded access to the 20 percent tax deduction for pass-through businesses under the Treasury Department’s final rule. ICBA and community bankers were key advocates for greater tax parity between S and C corporation community banks, so Treasury’s final rule capturing more services provided by Sub S banks is a significant improvement over its initial proposal.
“As ICBA details in our new analysis of the final rule, Section 199A of the Tax Cuts and Jobs Act allows shareholders in Sub S banks and other pass-through businesses to take a 20 percent deduction on qualified business income. While Treasury’s August proposal would have excluded critical community banking services, the final rule provides that income from loan origination and sales are eligible for the deduction—rightly recognizing these as core features of the community bank business model.
“With questions remaining over the final rule’s treatment of other community banking services, such as wealth management and fiduciary services, ICBA looks forward to continuing our work with policymakers to maximize Sub S eligibility for the tax deduction.”
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 52,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 760,000 Americans and are the only physical banking presence in one in five U.S. counties. Holding more than $4.9 trillion in assets, $3.9 trillion in deposits, and $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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