Hi,

Please refer to IRS Publication 535, Chapter 12: https://www.irs.gov/pub/irs-pdf/p535.pdf

The way the worksheets / computations work is that for Specified Service Trades or Businesses which are in the phase-out range, you mulitply Qualified Business Income, W-2 Wages and Unadjusted Basis in depreciable property by a phase-out percentage (see Schedule A).

Then those reduced amounts for QBI, Wages, UBIA flow into Worksheet 12-A on lines 2, 4 and 7.  Worksheet 12-A then applies the 1) Wages / UBIA limitation (along with a phase-in if taxable income is above the threshold) and the 2) 20% Taxable Income limit.

Thank you,

Mike D'Avolio

Intuit