The following table outlines at a high level the major business tax changes in the CARES Act. Please contact Joe Mandarino, if you have any follow up questions.
| § |
Title |
Description |
| 2301 |
Employment tax credit |
- Eligible employers allowed a refundable credit against their social security tax liability equal to 50% of the qualified wages of each employee.
- Credit capped at $5,000 per employee.
- Applies to wages paid after 3/12/2020 and prior to 2021.
- Eligible employer:
- business is fully or partially suspended due to COVID-19, or
- gross receipts decline by at least 50%
|
| 2302 |
Employment tax payment deferral |
- Employers can defer payment of their social security tax liability (net of the credit above).
- Applies to taxes that would otherwise be due starting 3/27/2020 through 12/31/2020.
- Half of the deferred tax due 12/31/2021; balance is due 12/31/2022.
- For self-employed individuals, same general rule but applies to 50% of SECA tax liability.
|
| 2303 |
NOL rules |
- NOLs from 2018, 2019 and 2020 can be carried back 5 years.
- 80% income limitation does not apply to these carrybacks.
|
| 2304 |
EBL rules |
- Application of EBL rules for non-corporate taxpayers deferred until after 2020.
|
| 2305 |
AMT credit rules |
- Corporations with stranded AMT credits can get a refund of the remaining balance starting with the 2019 tax year.
|
| 2306 |
Interest expense cap |
- The 30% limitation on net interest expense is increased to 50% for 2019 and 2020.
|
| 2307 |
QIP Fix |
- The 2017 TCJA erroneously failed to include qualified improvement property for 100% bonus depreciation.
- Change is effective as if included in the 2017 TCJA.
|
| 2308 |
Hand sanitizer tax |
- Waiver for 2020 of excise tax for alcohol used in hand sanitizer that is used or produced in a manner consistent with FDA guidance related to the COVID-19 outbreak.
|
