U.S. Small-Business Subchapter V Filings Rise 50 Percent in First Half of 2026

The 50 percent increase in small-business reorganizations coincides with the permanent extension of the 20 percent qualified business income deduction under the One Big Beautiful Bill Act. Treasury data show average tax savings near $7,000 for 12 million filers, yet higher borrowing costs and input prices have outpaced those gains for firms carrying variable-rate debt. NFIB surveys record inflation cited as the top problem by 18 percent of respondents, the highest share since December 2024.

Commercial Chapter 11 filings overall climbed 28 percent to 4,589. The ABI statement attributes the rise to elevated expenses and geopolitical volatility, without isolating the contribution of each factor. Primary Federal Reserve lending-rate data through mid-2026 confirm policy rates remained above 4 percent, sustaining debt-service burdens that the tax provision alone cannot offset for leveraged operators.

The two-sided ledger is clear: the deduction lowers statutory tax liability while simultaneously failing to compress input-cost and interest-rate pressures documented in NFIB price-rise plans. No administration statement has quantified how many additional filings would have occurred absent the deduction.

Absent a sustained decline in the federal funds rate below 3.5 percent or a measurable drop in energy and logistics costs, filings are projected to maintain their elevated trajectory into 2027.