Internal Revenue Code Section 199A pertains to the deduction of qualified business income. Learn how this relates to statutory employees below.

For purposes of the Sec. 199A 20% deduction of qualified business income (QBI), statutory wages paid by a business (i.e., where box 13 of the W-2 is marked) are not wages includible for the wage limitation computation.

The trade or business of performing services as an employee is not a trade or business for purposes of section 199A. Therefore, any amounts reported in box 1 of Form W-2, where the “Statutory Employee” box in box 13 is checked, are not QBI.

See Chapter 3.24 for details about the Sec 199A deduction.