Data & Citations
Sources
Every claim on this site is backed by U.S. government data, peer-reviewed academic research, or official state records. Here are the primary sources.
Primary Data Source
U.S. Treasury OTA Working Paper 127 ↗
January 2025. Primary source for all distribution, claimant, and exclusion data (2012-2022). This paper from the Office of Tax Analysis provides the first comprehensive look at who claims QSBS, how often, and how much. Key findings: 75% one-time claimants, $2,810 median exclusion, 74% of claimants under $1M income.
Academic Studies
Study finding ~12% increase in startup investment after 100% QSBS exclusion. Uses within-firm funding round variation before/after the Small Business Jobs Act of 2010.
Chen & Farre-Mensa (2023/2025) ↗
Diff-in-diff study finding more firm births, startup employment, and first-round VC in QSBS-eligible industries after 2010 expansion to 100% exclusion.
Migration & Economic Data
IRS SOI Migration Data, 2021-2022 ↗
Interstate migration of tax filers and AGI. Shows net filer flows between states. See also: Tax Foundation analysis (Dec 2024) ↗
California Legislative Analyst's Office (2024) ↗
Analysis of high-earner outmigration and AGI losses from California, 2020-2022. $102 billion in AGI lost to outmigration. 24,670 high-earner households departed in 2022 alone.
Opposing Analysis
October 2025. Source of the "94% goes to millionaires" claim. See also ITEP's April 2026 Maine/Oregon writeup, June 2026 “States Are Standing Up to the Monster Known as QSBS,” and August 2026 remaining-conformers map. Our detailed analysis of the 94% claim.
Mitchell, Equitable Growth (2023); Pomerleau & Mitchell, AEI/Tax Notes (Oct 2025); Shilov, Tax Foundation (Dec 2025)
Critiques arguing QSBS is inefficient, complex, or unneutral. Summarized on the evidence page. They do not measure the 2010 100% expansion the way Edwards & Todenhaupt and Chen & Farre-Mensa do.
Federal statute
P.L. 119-21 §70431 (OBBBA), signed July 4, 2025
3/4/5-year 50/75/100% ladder, $15M per-issuer cap, $75M gross-asset ceiling, both indexed after 2026. JCT score: JCX-35-25 ↗.
State Legislation (2026 session)
Enacted decoupling
Oregon DOR 2026 summary / SB 1507 ↗ · Maine LD 2212 / ch. 650 ↗ · Illinois SB 3019 · Vermont Act 164 ↗ · Rhode Island HB 7127 Sub A ↗ · DC B26-0457 / Act 26-214 ↗
Decoupling that failed
New York FY2027 budget (signed May 28, 2026) dropped the QSBS add-back · WA SB 6229 ↗ · MD HB 801 ↗
Other 2026 conformity notes
Hawaii Act 35 (HB 2329, May 26, 2026) freezes §1202 as of Dec 31, 2024. New Jersey P.L. 2025 c.67 full conformity in force for 2026+.
Methodology Notes
Income classification: All income brackets use Treasury's Total Positive Income (TPI) methodology, which excludes QSBS gains from income. This measures a claimant's regular economic income, not one-time liquidity events.
State conformity data: Compiled from enacted 2026 session bills and DOR summaries as of September 2026. There is no remaining "pending" state. Rhode Island is coded decoupled with a 2027 effective date; Maine is coded partial (post–July 3, 2025 stock only).
Migration data: Based on IRS Statistics of Income (SOI) county-to-county migration data, tracking address changes on tax returns between filing years 2021 and 2022.
Calculator: Tax calculations use each state's top marginal capital gains tax rate unless a statute requires a different rate (Massachusetts 5% long-term CG on federally included gain; Vermont 40% exclusion cap $350k after QSBS add-back). California's 1% Mental Health Services Tax is footnoted, not modeled. Actual tax liability may differ based on individual circumstances.
Archetype examples: The four claimant archetypes (engineer, founder, employee, investor) are illustrative scenarios based on typical QSBS claim profiles described in Treasury data. Tax amounts calculated at California's 13.3% top rate.