The National Federation of Independent Business (NFIB) announced on Apr. 16 that preserving the federal 20% small business tax deduction is expected to add $2.3 billion to New Jersey’s gross domestic product each year over the next decade and create 38,000 new jobs annually in the state.
The continuation and expansion of this tax break are significant for New Jersey’s economy, which includes about 1.1 million small businesses employing nearly 1.9 million people. The deduction was made permanent through the One Big Beautiful Bill Act signed last July, with expanded qualifying thresholds beginning in 2026.
The Qualified Business Income (QBI) deduction allows eligible pass-through entities such as sole proprietorships, partnerships, limited liability companies, and S corporations to deduct up to 20% of qualified business income on their owners’ personal tax returns. According to NFIB, these savings will help businesses grow operations and hire additional workers.
“This permanent tax relief means America’s small businesses can use more of their hard-earned money to support their business and employees instead of sending it to their state and federal government,” the NFB said on April 15. “It also provides certainty and levels the playing field for small businesses against their large corporate competitors.”
Other changes under the new law include doubling Section 179 expensing caps from $1.25 million to $2.5 million—indexed for annual increases—allowing immediate deductions for qualifying equipment purchases; restoring Section 168(k) bonus depreciation permanently at a full 100%, so property acquired after January 2025 can be fully deducted in its first year; and increasing federal estate tax exemptions permanently to $15 million per individual or $30 million per couple with inflation adjustments.
New Jersey repealed its own estate tax effective in 2018, but residents may still owe federal estate taxes if estates exceed those thresholds.
The New Jersey Business and Industry Association serves as the nation’s largest statewide employer association representing employers across various sectors according to its official website. The association advances competitive excellence while delivering essential information and services according to its official website. Michele Siekerka serves as president and chief executive officer according to its official website. The organization supports private-sector employers throughout New Jersey according to its official website, facilitates partnerships among businesses, government entities, and academic institutions according to its official website, and offers advocacy along with cost-saving benefits according to its official website.
