what's a qualified trade or business under section 199A?

[todd1125]

What do they mean when they ask, Is this activity a qualified trade or business under section 199A?

[MinhT1]

Please read this TurboTax Help topic on Is my business an SSTB?

[todd1125]

That didn't really help.  It's asking about a baseball camp/clinic that I do for kids each year.  I make about $2,000 from it.  My fulltime job is in education.

[DavidD66]

Your baseball camp/clinic would be a qualified trade or business, as it is not a "specified" service trade or business.  And even if you indicate that it is an SSTB, you would still qualify for the 20% deduction if your AGI is $157,500 or less if filing single, or $315,000 if Married Filing Joint.

[todd1125]

if I click yes I get about $100 more on back on my return.  Guess I'll click yes

[ColeenD3]

Yes, you have a profit motive, materially participate and meet the income requirements. 

[todd1125]

thanks, now I need to figure out  what the business code would be for doing a baseball camp.

[HelenC12 · Accepted solution]

The business code for a baseball camp is NAICS 611620

The bulleted items below are illustrative examples of this classification.

• Camps, sports instruction
• Professional sports instructors (i.e., not participating in sporting events)
• Cheerleading instruction
• Riding instruction academies or schools
• Gymnastics instruction
• Sports (e.g., baseball, basketball, football, golf) instruction
• Martial arts instruction, camps or schools.

Source: NAICS

[todd1125]

what do they mean by did I "materially" participated in the operation of the business?  

[DianeC958]

A taxpayer materially participates in an activity only if he or she meets any one of the seven material participation tests.

1. The taxpayer works 500 hours or more during the year in the activity.
2. The taxpayer does substantially all the work in the activity.
3. The taxpayer works more than 100 hours in the activity during the year and no one else works more than the taxpayer.
4. The activity is a significant participation activity and the sum of significant participation activity in which the taxpayer works 100-500 hours exceeds 500 hours for the year.
5. The taxpayer materially participated in the activity in any 5 of the prior 10 years.
6. The activity is a personal service activity and the taxpayer materially participated in that activity in any 3 prior years.
7. Based on all of the facts and circumstances, the taxpayer participates in the activity on a regular, continuous, and substantial basis during such year.  However, this test only applies if the taxpayer works at least 100 hours in the activity, no one else works more hours than the taxpayer in the activity, and no one else receives compensation for managing the activity

@todd1125

[BER3]

NAICS Link is broken/Database is down

https://classcodes.com/lookup/naics-code-611620/

Error establishing a database connection

[FangxiaL]

You can use this link for NAICS code list if you need it.

@BER3

[KJB6]

My wife essentially sells Optavia food/diet products.  We received a 1099-NEC.  She "sold under $3500 worth of stuff.

Is this a qualified business income?  

[ZoltanB45]

Yes, that industry qualifies for the qbi deduction. It is not an SSTB, so there is no income limitation.