Is there a reference to an IRS document that specifies the time frame when business income is classified as "wages" for the purposes of Qualified Business Income Ded.?

[kesineshal]

The help section in Turbotax (desktop) says that for the purposes of Qualified Business Income Deduction, IRS considers business income from previous employer as wages for the first 3 years. Is there a reference to an IRS document that specifies this time frame?

[JulieCo · Accepted solution]

The 3 year reference related to a previous employer is from IRS Publication 535 -- see page 50.  The excerpt (see bold print) and link are provided below.

Services performed as an employee excluded from qualified trades or businesses. The trade or business of performing services as an employee is not a trade or business for purposes of section 199A. Therefore, any amounts reported in box 1 of Form W-2, other than amounts reported in box 1 where the “Statutory Employee” box in box 13 is checked, are not QBI. If you were previously an employee of a business and continue to provide substantially the same services to that business after you are no longer treated as an employee, there is a presumption that you are providing services as an employee for purposes of section 199A for the 3-year period after ceasing to be an employee. You may have to rebut this presumption upon notice from the IRS by providing records such as contracts or partnership agreements that corroborate your status as a non-employee. For more information on whether you are an employee or an independent contractor, see Pub. 15-A, Employer’s Supplemental Tax Guide, and Pub. 1779, Independent Contractor or Employee.

https://www.irs.gov/pub/irs-pdf/p535.pdf