Tax deduction for U.S. manufacturers would rise from 20% to 30% under House bill
In committeeH.R. 8755Latest action
Sponsor: Carol D. Miller · Representative · WV
AIDecoded by AI · checked against the recordRead the official text
Official title: Enhanced Small Business Growth Act of 2026
119th Congress
Topics: Jobs & the economy
Introduced:
Read the official bill on Congress.govIn plain words
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HR 8755 raises the pass-through business income deduction to 30% for owners who manufacture physical goods mostly in the U.S., starting in 2026.
55-second read · 4 questions answered below
What does this do?
HR 8755 would increase the qualified business income deduction from 20 percent to 30 percent for business owners who qualify as domestic manufacturers. To qualify, at least 85 percent of a business's income must come from making physical products, and at least 20 percent of the costs tied to those products must come from labor and overhead expenses inside the United States. The bill also removes charitable donations from the taxable income figure used to calculate the deduction for people who itemize, with both changes taking effect in the 2026 tax year.
Who does it affect?
The bill affects self-employed people and owners of pass-through businesses, including sole proprietorships, partnerships, and S-corporations. Large corporations subject to the standard corporate income tax are not affected.
Why does it matter?
Small and mid-sized manufacturers who produce physical goods and conduct a meaningful share of their production work domestically would see the largest change in their deductible income. Owners who do not meet the 85 percent income or 20 percent labor and overhead thresholds would remain at the existing 20 percent deduction rate.
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Where does it stand?
- IntroducedMay 12, 2026
- House committeeYou are here · May 12, 2026
- House vote
- Senate
- The president's desk
Right now: a House committee is reviewing it. If the Senate changes it, it goes back to the House before reaching the president.
Latest action: — Referred to the House Committee on Ways and Means.