diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -3132,10 +3132,6 @@
                 // to meet nFeeNeeded result in a transaction that requires less
                 // fee than the prior iteration.
 
-                // TODO: The case where nSubtractFeeFromAmount > 0 remains to be
-                // addressed because it requires returning the fee to the payees
-                // and not the change output.
-
                 // If we have no change and a big enough excess fee, then try to
                 // construct transaction again only without picking new inputs.
                 // We now know we only need the smaller fee (because of reduced
@@ -3169,7 +3165,9 @@
                 break;
             } else if (!pick_new_inputs) {
                 // This shouldn't happen, we should have had enough excess fee
-                // to pay for the new output and still meet nFeeNeeded
+                // to pay for the new output and still meet nFeeNeeded.
+                // Or we should have just subtracted fee from recipients and
+                // nFeeNeeded should not have changed.
                 strFailReason =
                     _("Transaction fee and change calculation failed");
                 return false;
@@ -3191,6 +3189,12 @@
                 }
             }
 
+            // If subtracting fee from recipients, we now know what fee we
+            // need to subtract, we have no reason to reselect inputs.
+            if (nSubtractFeeFromAmount > 0) {
+                pick_new_inputs = false;
+            }
+
             // Include more fee and try again.
             nFeeRet = nFeeNeeded;
             continue;