The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released a new report outlining the benefits the 20% Small Business Tax Deduction will bring to Illinois if made permanent. The report also spotlights that the 1.3 million small businesses in Illinois could face significantly higher taxes if Congress does not make the 20% Small Business Tax Deduction permanent this year. The report outlines the severe consequences for small businesses in Illinois and the broader U.S. economy that would result from the provision’s expiration, highlighting potential economic slowdown and increased financial strain on local businesses.

The report also highlights a stark contrast in tax rates between small businesses and their larger corporate competitors if the deduction is not made permanent. In Illinois, the C-Corp tax rate would remain at 30.50% while the small business rate would surge to 44.55%.

However, making the deduction permanent would lead to significant economic benefits, leaving the small business tax rate on a level playing field with its competitors. Additionally, Iowa is projected to gain 12,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $562 million for the first decade and $1.16 billion per year beyond 2035.

View the report for Illinois here.

“Illinois small businesses are the backbone of our communities,” said NFIB Illinois State Director Noah Finley. “Congress cannot allow the 20% Small Business Deduction to expire. A massive tax hike will endanger Illinois’ small businesses and limit business owners’ ability to hire and make further investments. Lawmakers must act quickly to protect small businesses.”

The 20% Small Business Tax Deduction, a key provision of the Tax Cuts and Jobs Act of 2017, has empowered millions of small business owners to expand, hire employees, and increase wages. If Congress does not act to make it permanent this year, nine out of 10 small businesses will face a significantly higher tax burden, threatening jobs and economic stability nationwide.

For more information about NFIB’s advocacy efforts and to access Illinois’ report visit: https://www.nfib.com/wp-content/uploads/2025/04/NFIB-20-Small-Business-Deduction-Impact-IL.pdf