The joint statement was issued on the same day that the IRS published the final regulations.
"The final regulations confirm that owners and shareholders of insurance agencies and brokers who are organized as pass-through entities can use a new tax deduction created by the 2017 tax legislation for their income from insurance producers," according to the CIAB-IIABA statement. .
Section 199A, also known as the Qualified business income, is a clause of the Internal Revenue Code that offers taxpayers a deduction for "qualified business income" from a qualified trader or company operated directly or through a pass-through entity. Eligible taxpayers are entitled to a deduction of up to 20% of qualified business income under the Regulation.
Qualified business income is the term used to refer to the net number of qualified items of income, profit, deduction and loss of a qualified trader or company. There are several exceptions to a qualified trade or company, as defined in Article 199A – the most important of them are financial services.
Initially, insurance – as a financial service – was not counted as part of the qualified professions and / or companies covered by the regulation. But the regulation now recognizes insurance agencies and brokers as pass-through entities.
"Our members offer insurance products that are essential to the economy, individual businesses and American families, they also employ millions of people in the US and occupy numerous store locations in every state, providing insurance and brokers and their employees with the necessary security." , continued the CIAB-IIABA statement.
"We thank the Administration for going ahead quickly to finalize these important regulations despite the partial closure by the government."