Section 1. Short title
This Act may be cited as the Small Business Investor Tax Parity Act of 2025.
(a) In general
Subsections (b)(1)(B) and (c)(1) of section 199A of the Internal Revenue Code of 1986 are each amended by inserting, qualified BDC interest dividends, after qualified REIT dividends.
(b) Qualified BDC interest dividend defined
Section 199A(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
(A) In general
The term qualified BDC interest dividend means any dividend from an electing business development company received during the taxable year which is attributable to net interest income of such company which is properly allocable to a qualified trade or business of such company.
(B) Electing business development company
For purposes of this paragraph, the term electing business development company means a business development company (as defined in section 2(a) of the Investment Company Act of 1940) which has an election in effect under section 851 to be treated as a regulated investment company.
(c) Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2026.