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You Make the Call - Dec. 18, 2025

Published:
By: NATP Staff
Self-employed tutor reviews math materials at a desk with a laptop, illustrating small business income and QBI deduction eligibility after OBBBA changes.

Question: Sam is a self-employed math tutor. Some years he works full-time and some years he only takes on a few students. He is unsure if he is eligible for the qualified business income (QBI) deduction after the One Big Beautiful Bill Act (OBBBA). How do the new QBI rules affect him? 

Answer: Sam is eligible for a deduction generally equal to 20% of his qualified business income (QBI) because he operates as a non-corporate taxpayer. Being a math tutor can be a qualified trade or business for QBI under §162. Starting for the 2026 tax year, if Sam earns at least $1,000 of active QBI, he qualifies for the deduction and will receive a minimum deduction of at least $400, even if 20% of his QBI is less than $400. In addition, because Sam tutors the students himself, he materially participates in the activity, which means his tutoring business qualifies as an active trade or business, as defined in §469(h). 

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NATP Staff

The NATP team is dedicated to supporting tax professionals with expert insights, industry updates, and resources that help them serve their clients with confidence.

Information included in this article is accurate as of the publication date. This post does not reflect tax law changes or IRS guidance that may have occurred after the publishing date.