Small Business Investor Tax Parity Act of 2025

This bill proposes to amend the Internal Revenue Code of 1986 to extend the deduction for qualified business income under section 199A, specifically to include certain interest dividends from business development companies. It aims to treat these dividends similarly to qualified REIT dividends for tax purposes, thereby providing tax parity for investors. The legislation defines a "qualified BDC interest dividend" as a dividend received from an electing business development company that is attributable to net interest income from a qualified trade or business. An "electing business development company" is further specified as a business development company that has chosen to be treated as a regulated investment company under section 851. These amendments are scheduled to take effect for taxable years beginning after December 31, 2026.