Below is a general overview of key provisions for businesses. For complete details or questions on how this might impact your business specifically, please contact us.
- Employee retention credit for employers: This provision provides a refundable payroll tax credit for 50% of wages paid to certain employees during the COVID-19 crisis. The credit applies to wages paid after March 12, 2020 and before Jan. 1, 2021. Employers taking advantage of the new SBA forgivable loans (mentioned in the last bullet) are not eligible for this credit.
- Delay of employer payroll taxes: Taxpayers can defer paying the employer portion of certain payroll taxes through the end of 2020. Employers taking advantage of the new SBA forgivable loans (mentioned in the last bullet) are not eligible for this credit.
- Temporary repeal of taxable income limitation for net operating losses: The Act temporarily removes the 80% taxable income limitation to allow an NOL to fully offset income.
- Modification of rules relating to net operating loss carrybacks: NOLs arising in a tax year beginning after Dec. 31, 2018, and before Jan. 1, 2021, can be carried back to each of the five tax years preceding the tax year of such loss.
- Modification of limitation on losses for noncorporate taxpayers: Noncorporate taxpayers can deduct excess business losses arising in 2018, 2019 and 2020.
- Accelerated corporate minimum tax credit: Corporations can claim 100% of AMT credits in 2020.
- Deductibility of interest expense temporarily increased: The Act temporarily and retroactively increases the limitation on the deductibility of interest expense for tax years beginning in 2019 and 2020.
- Bonus depreciation technical correction for qualified improvement property: The Act makes qualified improvement property eligible for 100% bonus depreciation, for property placed in service after Dec. 31, 2017.
- Business loan programs: The Act creates a $350 billion loan program for businesses with fewer than 500 employees, which includes sole proprietors, independent contractors and the self-employed. Loans can be used for payroll, utilities, insurance premiums and other expenses. Loans are available through banks participating in the Small Business Administration’s lending network, and businesses may apply for loan forgiveness.
For more information on business management, tax and HR information related to COVID-19, please see our website.