Nov. 16, 2018
ICBA President and CEO Rebeca Romero Rainey met with a top Treasury official to discuss how to maximize the impact of the 20 percent tax deduction for Subchapter S banks and other pass-through businesses. In a meeting with Justin Muzinich—a key figure in writing the Tax Cuts and Jobs Act and President Trump’s nominee for deputy Treasury secretary—Romero Rainey reiterated that the proposal unnecessarily limits the law’s ICBA-advocated deduction.
The August proposed rule names various financial services that do not qualify for the 20 percent deduction, such as trust or fiduciary services, wealth management, retirement planning and income from loans sold to be securitized. It also established de minimis thresholds to qualify for the full deduction.
ICBA is calling on the IRS to allow all permissible banking activities to be eligible for the deduction. In a joint comment letter last month, ICBA and other groups urged the IRS to issue additional guidance raising the de minimis thresholds to a flat 25 percent and clarifying the treatment of loan sales, trades and businesses, and ancillary consulting services.
ICBA will continue working with policymakers to advocate a broad interpretation that ensures all Sub S community bank activities are eligible for the tax deduction.