[vc_row][vc_column][vc_column_text]The manufacturers’ deduction, also called the “Section 199” or “domestic production activities” deduction, is 9% of the lesser of qualified production activities income or taxable income. The deduction is also limited to 50% of W-2 wages paid by the taxpayer that are allocable to domestic production gross receipts.

Yes, the deduction is available to traditional manufacturers. But businesses engaged in activities such as construction, engineering, architecture, computer software production and agricultural processing also may be eligible.

The deduction isn’t allowed in determining net self-employment earnings and generally can’t reduce net income below zero. But it can be used against the alternative minimum tax.

Your Whalen team will be certain to utilize this powerful deduction when applicable, to reduce your business’s tax liability when preparing your 2014 return.

Copyright 2015 Thomson Reuters
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• Tag: manufacturers deduction