The National Federation of Independent Business announced on Apr. 15 that a new report outlines the economic benefits and tax savings from the now-permanent 20% Small Business Tax Deduction for Iowa’s nearly 290,000 small businesses.
According to the organization, making this deduction permanent is expected to provide significant relief for small business owners in Iowa. The NFIB projects that if the deduction remains in place, Iowa could see an additional 12,000 jobs created each year over the next decade and an annual gross domestic product increase of $562 million during that period. After 2035, the yearly GDP boost is estimated at $1.2 billion.
“Making the 20% Small Business Tax Deduction permanent is a landmark victory for Iowa’s Main Streets,” said NFIB Iowa State Director Logan Shine. “It effectively levels the playing field, allowing our small businesses to compete with big corporations that have long enjoyed lower tax rates. This ensures that Iowa’s economy remains strong, giving owners the confidence to hire new workers and grow.”
Since its introduction in 2017, this deduction has allowed eligible small businesses to deduct up to one-fifth of their business income from taxes. The measure was set to expire at the end of 2025 without congressional action.
After being passed by Congress, President Trump signed legislation on July 4, 2025 making this tax provision permanent nationwide. According to NFIB’s statement, this move gives certainty and stability for business planning while helping smaller companies remain competitive against larger firms.
For more information about NFIB’s advocacy efforts or access to Iowa’s specific report on these changes, readers can visit https://www.nfib.com/news/press-release/2026-state-specific-reports-detail-benefits-of-20-small-business-tax-deduction-becoming-permanent/.
