On March 13, the Joint Committee on Taxation (JCT) released a publication entitled "Overview of Deduction for Qualified Business Income: Section 199A" that included an analysis of the Section 199A deduction. The JCT analysis found that, despite limitations on what is eligible to be qualified business income — including the specified service trade or business limitation and guardrails based on W-2 wages or W-2 wages and capital — most Schedule C, E, and F income is eligible for the Section 199A deduction.

As seen in Figure 1, the JCT estimates that 39.2 million returns will report Schedule C, E, or F income in 2019 and that 68.4% (26.8 million) of these returns will be eligible for the Section 199A deduction. Moreover, the JCT estimates that 91.5% of total Schedule C, E, and F income will be eligible for the Section 199A deduction in 2019. The analysis also included estimates on the use of the Section 199A deduction above and below the deduction's taxable income threshold ($157,500 or $315,000 for joint returns; indexed for inflation after 2018). In particular, the JCT estimates that only 4.9% of tax returns using the Section 199A deduction will be above the taxable income threshold in 2019. The JCT also estimates, however, that 66.0% of the tax benefit from the Section 199A deduction will be to taxpayers above the taxable income threshold.

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