IRS explains permanent QBID, expanded employer child‑care credit and permanent paid family‑medical leave credit

At the webinar Richard Furlong and subject‑matter panelists reviewed several employer and individual‑focused credits and deductions modified by the One Big Beautiful Bill.

On the qualified business income deduction (IRC §199A), Furlong said the 20% deduction is permanent beginning in 2026 and phase‑in thresholds were raised (single filers to $75,000; joint filers to $150,000). He noted a new minimum deduction of $400 for taxpayers with at least $1,000 in qualified business income.

On employer child care, Furlong said the employer credit under IRC §45F increases to 40% of qualified child‑care expenses up to a $500,000 cap beginning for amounts after Dec. 31, 2025; eligible small businesses may claim up to 50% (cap $600,000). He explained employers may jointly own a facility or contract with third parties to provide services.

Panelist Filomena Mealy answered an attendee question about claiming paid family‑medical leave credits and related deductions: "Generally, the employer must reduce the wage deduction by the amount the credit is claimed," she said, and employers must similarly reduce premium deductions when taking the 45S credit for insurance premiums.

Furlong stressed that, despite higher reporting thresholds for some information returns, taxpayers must still report and pay tax on income that is not reported on an information return. He closed by directing practitioners to IRS forms and instructions for computing QBID and for claiming employer credits.