# Specified service trades or businesses and the trade or business of performing services as an employee.
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Correcting amendments.
**SUMMARY:**
This document contains corrections to final regulations (TD 9847) that were published in the *Federal Register* on Friday, February 8, 2019. The final regulations are concerning the deduction for qualified business income under section 199A of the Internal Revenue Code.
**DATES:**
This correction is effective on April 17, 2019 and is applicable on or after February 8, 2019.
**FOR FURTHER INFORMATION CONTACT:**
Vishal R. Amin or Sonia K. Kothari at (202) 317-6850 or Robert D. Alinsky, Margaret Burow, or Wendy L. Kribell at (202) 317-5279.
**SUPPLEMENTARY INFORMATION:**
**Background**
The final regulations (TD 9847), published on February 8, 2019 (84 FR 2952), that are the subject of this correction are issued under section 199A of the Internal Revenue Code.
**Need for Correction**
As published, the final regulations (TD 9847) contain errors that need to be corrected.
**List of Subjects in 26 CFR Part 1**
Income taxes, Reporting and recordkeeping requirements.
**Correction of Publication**
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
**PART 1—INCOME TAXES**
**26 CFR Part 1**
*Paragraph 1.* The authority citation for part 1 continues to read in part as follows:
**Authority:**
26 U.S.C. 7805 * * *
**26 CFR Part 1**
*Par. 2.* Section 1.199A-0 is amended by revising the entry for § 1.199A-1(a)(16) and adding an entry for § 1.199A-2(b)(2)(iv) to read as follows:
§ 1.199A-0
§ 1.199A-1
(a) * * *
(16) W-2 wages.
§ 1.199A-2
(b) * * *
(2) * * *
(iv) Methods for calculating W-2 wages.
**26 CFR Part 1**
*Par. 3.* Section 1.199A-1 is amended by revising the second sentence of paragraph (b)(10) and the seventh sentence of paragraph (d)(4)(xi)(B) to read as follows:
§ 1.199A-1
(b) * * *
(10) * * * Other passthrough entities including common trust funds as described in § 1.6032-1T and religious or apostolic organizations described in section 501(d) are also treated as RPEs if the entity files a Form 1065, *U.S. Return of Partnership Income,* and is owned, directly or indirectly, by at least one individual, estate, or trust. * * *
(d) * * *
(4) * * *
(xi) * * *
(B) * * * Thus, F has overall net QBI of $80,000 when all trades or businesses are taken together ($200,000) plus $150,000 minus $120,000 minus the carryover loss of ($150,000). * * *
**26 CFR Part 1**
*Par. 4.* Section 1.199A-2 is amended by revising the fifth sentence of paragraph (b)(2)(iii)(A) to read as follows:
§ 1.199A-2
(b) * * *
(2) * * *
(iii) * * *
(A) * * * Section 6071(c) provides that Forms W-2 and W-3 must be filed on or before January 31 of the year following the calendar year to which such returns relate (but see the special rule in § 31.6071(a)-1T(a)(3)(i) of this chapter for monthly returns filed under § 31.6011(a)-5(a) of this chapter). * * *
**26 CFR Part 1**
*Par. 5.* Section 1.199A-4 is amended by revising the fourth sentence of paragraph (c)(3), the first sentence of paragraph (c)(4)(ii), and the third sentence of paragraph (d)(15)(ii) to read as follows:
§ 1.199A-4
(c) * * *
(3) * * * However, an RPE may add a newly created or newly acquired (including through non-recognition transfers) trade or business to an existing aggregated trade or business (including the aggregated trade or business of a lower-tier RPE) if the requirements of paragraph (b)(1) of this section are satisfied. * * *
(4) * * *
(ii) * * * If an RPE fails to attach the statement required in paragraph (c)(4)(i) of this section, the Commissioner may disaggregate the RPE's trades or businesses. * * *
(d) * * *
(15) * * *
(ii) * * * If PRS2 does aggregate the two businesses, PRS1 may not aggregate its food service business with PRS2's aggregated trades or businesses. * * *
**26 CFR Part 1**
*Par. 6.* Section 1.199A-5 is amended by revising the sixth sentence of paragraph (b)(3)(xiv) and the eighth sentence of paragraph (d)(3)(iii)((B) to read as follows:
§ 1.199A-5
(b) * * *
(3) * * *
(xiv) * * * Several of the employees and K have worked in the bicycle business for many years, and have acquired substantial skill and reputation in the field. * * *
(d) * * *
(3) * * *
(iii) * * *
(B) * * * Unless the presumption is rebutted with a showing that, under Federal tax law, regulations, and principles (including common-law employee classification rules), C is not an employee, C's distributive share of Law Firm 2 income (including any guaranteed payments) will not be QBI for purposes of section 199A.* * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).