Sunsetting of Section 199A(g)

Dennis Gardiner, CPA, Managing Partner

The 2017 Tax Cuts Jobs Act (TCJA) is due to sun set on December 31, 2025 (with the 2025 tax year).  The 21% corporate tax rate was permanently changed with TCJA, so it will not expire.  As you are likely aware of, the Section 199A(g) deduction will expire.  This deduction has been tremendous for cooperatives and its members.  Whether the deduction was passed on to the farmer member or utilized by the cooperative it has been valuable in providing a reduction in taxable income allowing for greater capital expenditures and return of equity, along with other uses.

Gardiner + Company has been actively tracking and gathering our client’s Section 199A(g) uses for several years.  We have been working closely with our clients, the regional cooperatives, the state and national councils and associations to report the deduction and how it has been utilized.

Preserving the Section 199A(g) deduction for cooperatives is important to their financial vitality.  We will continue to do what we can to assist our clients and the various industry associations demonstrate the positive impact this deduction has had for the cooperatives and its members.