The Consolidated Appropriations Act of 2021, enacted late last year, includes several tax related changes and incentives affecting businesses.

Congress overruled guidance from the Internal Revenue Service to provide that expenses paid with Payroll Protection Program loans (PPP) will be deductible even if the PPP loans are forgiven. The new law also clarifies how forgiveness works in the context of a partnership or S corporation.

Congress modified the Employee Retention Credit in two important ways. First, businesses that receive PPP loans may now qualify for the employee ... Read More 

On Aug. 8, 2020, President Trump issued a memorandum calling for the Secretary of Treasury to allow for the deferral of payroll tax withholding on the employee portion of certain payroll taxes. This memorandum is separate from the ability of employers to defer their own payroll tax obligations under the CARES Act and is intended to provide stimulus to the economy by temporarily boosting take-home wages. On Aug. 28, 2020, the Department of Treasury and Internal Revenue Service issued Notice 2020-65, allowing employers to defer payroll tax withholding, but requiring all ... Read More 

The COVID-19 pandemic creates a unique set of circumstances for nonprofits. Many of them are facing similar challenges to for-profit businesses — how to manage employees working remotely, dealing with declining revenue — but without clarity about how the federal stimulus measures will benefit them. In addition, these times have created challenges for nonprofits with respect to governance issues, such as how directors and members of nonprofits can take action while remaining in compliance with the State of North Carolina’s "stay at home" orders.

The good news is, based ... Read More 

The Coronavirus Aid, Relief, and Economic Security Act (CARES) enacted on March 27, 2020 contained several significant business-related tax changes highlighted below. Many of these changes are limited in the period to which they apply, and several have retroactive application that may require filing an amended tax return in order to claim the full benefit available.

Business Interest Deductions

The amount of a taxpayer’s business income that may be offset by business interest generally is limited to 30%. CARES increases this limit to 50% for 2019 and 2020, subject to special ... Read More 

Much of the focus of the attention generated by the CARES Act has been on the Payroll Protection Program (PPP) through the Small Business Association. Loans through the PPP have the potential to be forgiven on a tax-free basis.  Please see our client alert for a discussion of the PPP. 

The CARES Act also adds relief in the form of employee retention credits and a delay of employer payroll taxes highlighted below.

Employee Retention Credit

The Employee Retention Credit is a fully refundable payroll tax credit that qualifying employers may receive by continuing to fund ... Read More 

Update: President Trump signed these Acts into law on March 18. They are expected to take effect no later than April 2.

Much has been made of the cost to employers of the leave required by the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, which have now been passed by Congress and await the President’s signature. Under these new laws, if a non-governmental employer is required to pay wages to employees as a result of either Act, they are entitled to substantial tax relief.

Emergency Paid Sick Leave Act Relief

Under the Emergency Paid Sick Leave ... Read More 

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