S. 2962 — Small Business Investor Tax Parity Act of 2025

This section expands the qualified business income (QBI) deduction under IRC §199A—which allows eligible taxpayers an up to-20% deduction for qualified business income from pass-through entities, qualified REIT dividends, and publicly traded partnership income—to also include qualified BDC interest dividends. The term qualified BDC interest dividend means any dividend from an electing business development company (BDC)—defined as a BDC under the Investment Company Act of 1940 that has elected regulated investment company (RIC) status under IRC §851—attributable to the BDC's net interest income properly allocable to a qualified trade or business. The amendments apply to taxable years beginning after December 31, 2026.