(This measure has not been amended since it was reported to the House on April 10, 2012. The summary of that version is repeated here.)
Small Business Tax Cut Act - Amends the Internal Revenue Code to allow a qualified small business a tax deduction equal to 20% of the lesser of qualified domestic business income or taxable income. Defines: (1) "qualified small business" as any employer engaged in a trade or business if such employer had fewer than 500 full-time employees in either 2010 or 2011; and (2) "qualified domestic business income" as an amount equal to the excess (if any) of the taxpayer's domestic business gross receipts (i.e., gross receipts effectively connected with a trade or business within the United States) for a taxable year over the sum of the cost of goods sold allocable to such receipts and other expenses, losses, or deductions properly allocable to such receipts.
Limits the amount of such deduction to 50% of the greater of: (1) the taxpayer's W-2 wages (payroll) paid to non-owners of the taxpayer's business; or (2) the sum of the W-2 wages paid to individuals who are non-owner family members of direct owners (i.e., stockholders of the business), plus any W-2 wages paid to direct owners who have an ownership interest in the business of 10% or less.
Directs the Secretary of the Treasury to prescribe regulations to carry out this Act, including regulations to prevent a taxpayer that reorganizes from being treated as a qualified small business if such taxpayer would not have been treated as a qualified small business prior to such reorganization.
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