Bill · S. 2962· Senate(119-S-2962)
Small Business Investor Tax Parity Act of 2025
- Introduced
- 10/1/2025
- Last activity
- 10/1/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Jim Banks
- Cosponsors
- - 3 - 0
- Introduced
- In Committee
What this bill would do
This bill, known as the "Small Business Investor Tax Parity Act of 2025," seeks to amend the Internal Revenue Code of 1986. It aims to allow the section 199A deduction to apply to qualified BDC interest dividends. This would place these dividends in the same manner as qualified REIT dividends. The changes specifically target dividends from electing business development companies that are attributable to net interest income. These amendments are set to take effect for taxable years beginning after December 31, 2026.
Yes· 3 of 6
Would high-income households be better off under this?+5
The tax deduction on BDC interest dividends benefits investors who typically hold such assets.
Would people with substantial wealth be better off under this?+5
The bill provides a tax deduction for specific types of investment income received via BDCs.
Does this cut the tax on profits from selling investments?+5
The bill provides a tax deduction for dividends from qualified business development companies, which effectively lowers the tax burden on investment income.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
-
Tax Deduction Parity: The bill amends section 199A to include "qualified BDC interest dividends" alongside "qualified REIT dividends" (Section 2(a)). This provides a specific tax deduction for dividends received from certain business development companies.
-
Defined Benefit for Electing BDCs: It defines a "qualified BDC interest dividend" as any dividend from an electing business development company that is attributable to net interest income allocable to a qualified trade or business (Section 2(b)). This provides a clear framework for what types of dividends qualify for the deduction.
Potential Negative Impacts for People
- Delayed Implementation: The amendments do not take effect until taxable years beginning after December 31, 2026 (Section 2(c)). This means any potential benefits from this change are not immediate for current taxpayers.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For High Income Households+5Good For High Net Worth Individuals+5Good For Business Owners+4
- Economy And Finance
- Reduces Capital Gains Tax+5Improves Small Business Support+4Improves Economic Growth+3
- 8/4/2026
- 1 Cosponsor added.
- 3/5/2026
- 1 Cosponsor added.
- 2/3/2026
- 1 Cosponsor added.
- 10/1/2025
- Read twice and referred to the Committee on Finance.
- Introduced in Senate
2 bills Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
John CornynRepublican · Texas
Steve DainesRepublican · Montana
David McCormickRepublican · Pennsylvania