Small Business Investor Tax Parity Act of 2025

This bill expands the tax deduction for qualified business income to include interest dividends from certain business development companies (BDCs), aligning them with the existing treatment for real estate investment trust (REIT) dividends. It specifically adds "qualified BDC interest dividends" to the list of eligible income under Section 199A of the tax code, allowing investors in qualifying BDCs to deduct 20% of these dividends. The change applies to taxable years beginning after December 31, 2026, and directly affects investors in BDCs that meet specific criteria as regulated investment companies. This policy modifies tax eligibility without altering the deduction rate or creating new tax obligations.