1. Short title This Act may be cited as the Bring Small Businesses Back Tax Reform Act . 2. Special individual rates for qualified small business income (a) In general Section 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following: (j) Maximum rate on qualified small business income (1) In general If a taxpayer has qualified business income for any taxable year, the tax imposed by this section for such taxable year shall not exceed the sum of— (A) a tax computed at the rates and in the same manner as if this subsection had not been enacted on taxable income reduced by qualified business income, (B) 12 percent of so much of the qualified business income of the taxpayer as does not exceed $150,000, plus (C) 25 percent of so much of the qualified business income of the taxpayer as exceeds the amount on which tax is determined under subparagraph (B). (2) Qualified business income (A) In general The term qualified business income means so much of the following of the taxpayer as does not exceed $1,000,000: (i) Gross earnings derived by an individual from any active trade or business carried on by such individual, less the deductions allowed by the subtitle which are attributable to such trade or business. (ii) The taxpayer’s distributive or pro rata share qualified pass-through income. Such term shall not include any amounts, or any distributive or pro rata share, attributable to capital gains, interest, dividends, and royalties. (B) Qualified pass-through income The term qualified pass-through income means, in the case of a partnership or S corporation, so much of the income of the partnership computed under section 703, or income of the S corporation computed under section 1363, as does not exceed $1,000,000 and is designated as such (at such time and in such form and manner as the Secretary shall prescribe) and allocated by the partnership or S corporation. Any income so designated shall be allocated amongst partners or shareholders in the same proportion as distributive or pro rata