CARES Act: Business Tax Provisions

CARES Act: Business Tax Provisions

briefing by David Kaplan,CPA;  Ron Kuyath, CPA and  Jill Clark, CPA

Coronavirus Aid, Relief, and Economic Security Act

On Friday, March 27, 2020, President Trump signed the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) into law.  这项法律标志着历史上最大的单一经济刺激计划，旨在为受COVID-19影响的许多企业和个人提供救济.

There are a number of different components of the law, 包括对税法的几项重大修改，以及与最近颁布的《十大赌博靠谱信誉的平台》(FFCRA)的一些条款相关的额外指导和清晰度，.  Below is a summary of the tax law provisions that impact businesses as well as an overview of some of the provisions related to the FFCRA.

We will be continually monitoring additional guidance as it is released and will provide updated information on this page as it becomes available, so please check back often.  In addition, please feel to reach out to your BRC tax advisor with any questions you may have.

Business Tax Provisions

Employee Retention Credit for Employers Subject to Closure Due to COVID-19

• Unlike many provisions under the recently passed legislation aimed at helping business weather the impacts of COVID-19, this credit is available to any size employer (i.e., not limited based on employer’s size/# of employees, etc.), including tax-exempt organizations.
• However, this credit is NOT available to:
  1. Employers receiving a Paycheck Protection Program (PPP) loan,
  2. Governmental employers, or
  3. Self-employed individuals.

• Eligible employers will receive a fully refundable credit against their applicable employment taxes (employer’s share of Social Security taxes – 6.2%) equal to 50% of qualified wages paid to each employee during a calendar quarter.
• The maximum amount of qualified wages that may be taken into account for each employee for all calendar quarters is $10,000, so the maximum credit for qualified wages to any one employee is capped at $5,000.
• This credit is only available for wages paid after March 12, 2020 and before January 1, 2021.
• The allowable credit is refundable to the extent it exceeds the employer’s payroll tax liability.
• Eligible employers are defined as an employer that:
  1. was carrying on a trade or business during calendar year 2020 and
  2. during any calendar quarter the operation of such trade or business is fully or partially suspended due to government orders that limit commerce, travel or group meetings due to COVID-19 or 在任何自然季度开始的期间，该雇主的总收入少于上一年同期总收入的50%，并在总收入超过上一年同期总收入80%的自然季度之后的自然季度结束. Additional guidance will have to be provided for employers not in business during the applicable 2019 periods.

 Qualified wages are defined as follows:

• 1. For employers with greater than **100 full-time employees during 2019 – wages paid by the employer to an employee that is not providing services due to either of the circumstances listed for an eligible employer above.
  2. For employers with less than **100 full time employees during 2019 and such employer has had to reduce or cease operations due to a government order – wages paid by the employer to an employee during any period of time during such reduction/closure.
  3. For employers with less than **100 full time employees during 2019 and 该等雇主符合有关总收入(上文已详细讨论)减少50%的规定，即雇主在符合资格期间内的日历季度内支付给雇员的工资.

** 2019年全职员工的平均人数(考虑到IRC 4980H下的全职等效规则)-在做出此决定时必须包括“相关雇主”.

• Qualified wages include costs incurred by the employer for qualified health plan expenses allocable to such eligible wages.
• Qualified wages exclude the following amounts:
  1. Wages required to be paid under the “Sick Leave” and “Family and Medical Leave” provisions of the Families First Coronavirus Relief Act (FFCRA)
  2. Wages for which a Work Opportunity Tax Credit (WOTC) are claimed.
  3. Wages for which a Family and Medical Leave Credit are claimed.
  4. 支付给任何拥有超过50%十大赌博靠谱信誉的平台股份或超过50%合伙企业资本或利润的人的工资(在适用IRC 267归属规则后).

• 雇主可以减少他们的联邦就业税存款(包括从雇员那里扣缴的联邦所得税), employees and employers share of Social Security and Medicare taxes) by the amount of anticipate credit under this provision.
• If the anticipated credit exceeds the otherwise required federal employment tax deposit, an employer may request an advance of their excess anticipated credit using IRS Form 7200 (Instructions).
• Amounts not deposited and/or received through an advanced credit request will have to be taken into account when filing Form(s) 941.
• Wage deductions of the employer must be reduced by an amount equal to the credit claimed.
• Click – IRS FAQ’s on the Employee Retention Credit

 Delay of Payment of Employer Payroll Taxes

• 符合条件的雇主可以推迟支付他们(雇主)的适用工资税(社会保障)，否则在法律颁布之日至1月1日之前到期, 2021.
• The amounts deferred will be due as follows: (a) 50% due by December 31, 2021 and (b) 50% due by December 31, 2022.
• 这些条款不适用于根据《十大赌博靠谱信誉的平台》第7(a)条免除与本法单独条款相关的债务的纳税人.
• 该法案还为自雇人士提供了救济，允许这些纳税人有能力推迟50%的IRC 1401(a)(社会保障税)规定的自雇收入，从3月27日开始, 2020 and ending December 31, 2020 to the deferral dates available to employers provided above.

Modification of Limitations on Charitable Contributions During 2020

• 2020年，十大赌博靠谱信誉的平台扣除慈善捐款能力的应纳税所得额上限已从10%提高到25%.
• To qualify the contributions must be cash contributions made during calendar year 2020 to an eligible public charity.
• Qualifying contributions are those made to organizations listed in Internal Revenue Code Section 170(b)(1)(A), excluding contributions to donor advised funds and 509(a)(3) supporting organizations.
• The law also increases the income limits on contributions of wholesome food inventory made during 2020 from 15% to 25%.
• 超过允许金额的供款将结转到纳税人的下一个纳税年度，并将受到现行法律规定的限制.

Modifications for Net Operating Losses

• For taxpayers that incur a net operating loss in taxable years beginning after December 31, 2017 and before January 1, 2021, they may carryback these losses to each of the 5 taxable years preceding the taxable year of the loss. 纳税人如不希望将2018年及/或2019年产生的亏损转回，必须在首个课税年度报税表到期日(包括延期)前选择放弃转回期 ending after March 27, 2020.
• 该法案取消了80%的应税收入限制，并允许纳税人在1月1日前开始的纳税年度内全额抵扣其应税收入, 2021.
• For fiscal year-end corporations who incurred an NOL during their tax year beginning in 2017 and ending in 2018, the law provides a technical correction allowing for a 2-year carryback of such NOL. The law also provides the deadlines for filing these carryback claims and associated elections.

Modification of Credit for Prior Year Minimum Tax Liability of Corporations

• 该法律允许企业加速获得剩余的AMT抵免，否则这些抵免将在2020年和2021年纳税年度抵免. This can be done by claiming these credits in their entirety on the corporation’s 2019 tax return.
• 该法律规定，十大赌博靠谱信誉的平台可以选择提交临时退税申请，以要求退还2018年纳税申报表上的任何剩余金额.

Modification of Limitation on Business Interest

• For tax years beginning in 2019 and 2020, 受利息支出限制规则约束的纳税人(见下文2019年合伙企业纳税申报表的例外情况)将被允许扣除利息支出，最高可达其调整后应税收入的50%(之前的限制为30%)。, in addition to any other amounts considered deductible under the previous law.
• For tax years beginning in 2020, 纳税人在确定2020年允许扣除的利息时，可以选择使用2019年调整后的应税收入金额，而不是2020年的计算金额.
• For tax years beginning in 2019, partnerships must still apply the 30% limit, however; unless a partner elects out, 在2020纳税年度开始的第一次纳税申报表中，合伙人将被允许扣除任何“超额商业利息费用”的50%. This was carved out due to the complexities and limitations around a partnership’s ability to amended their returns under the new audit regime rules.

Technical Amendments Regarding Qualified Improvement Property

• 该条款提供了与2017年TCJA通过时所做的监督相关的技术纠正，并划分出“合格的改进财产”，并允许此类财产在15年内折旧(相对于39年)。.
• This gives a taxpayer the ability to take 100% bonus depreciation on property that meets this definition.
• This correction is retroactive, 这意味着在2018年和/或2019年纳税年度将这类财产投入使用的纳税人将有能力对他们如何折旧这类财产进行更正. 需要额外的IRS指导来确定对已经使用现已取代的规则提交的纳税申报表进行调整的适当方法.

 Temporary Exception from Excise Tax for Alcohol Used to Produce Hand Sanitizer

• The law temporarily exempts any distilled spirits used in hand sanitizer products in a manner consistent with FDA guidelines between January 1, 2020 and December 31, 2020 from being subject to otherwise applicable excise taxes.

Labor Provisions

This section of the CARES Act provides clarification on some of the previous legislation passed, as well as specific rules for certain government employers.  Below are the key points from this section that apply to most taxpayers:

• The law provides clarification that the wage limitations provided in the Required Sick Leave and Family and Medical Leave Act under the FFCRA are for each employee that receives wages under either of these leave provisions.
• Paid leave now includes rehired employees if they were laid off by the employer not earlier than March 1, 2020 and worked at least 30 of the last 60 days prior to the employee being laid off and are rehired by the employer.
• Unemployment insurance application and assistance needs to be accessible and provided in at least 2 of the following methods: in person, by phone, or online.
• 该法律规定，如果根据最近颁布的法律的规定，预计将获得抵免，则豁免未缴纳工资税的存款罚款.

Jill W. Clark Director of Tax Quality Assurance, CPA

NC License #30742

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David Kaplan Partner, CPA

David is a Tax Partner in BRC’s Charlotte office. He is responsible for providing tax compliance and consulting services for a diverse client base. He has over 20 years of tax experience from working in public accounting. Prior to joining BRC in 2018, he was a partner in a South Florida firm. His expertise […]

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