As of March 27, 2020, the Coronavirus, Aid, Relief and Economic Security Act (CARES Act) was passed due to the needs caused by the global COVID-19 pandemic. The act includes several tax provisions to provide relief and cash flow to businesses and individuals that were affected.
Employee Retention Tax Credit Opportunity
In particular, one provision is the Employee Retention Tax Credit which is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel, or group meetings. The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis.
Kyle Kmiec, Tax Senior Manager, states “If your company missed out on the PPP Loan program, there are other alternatives that can lead to a cash influx to your business. The employee retention credit can lead to a refund of $5,000 per employee if your business meets the qualifications.”
The CICPAC Tax Thought Leadership Committee has put together a summarized list of the changes for the construction industry to consider for 2020 tax planning and beyond.
These changes include the following topics:
• Net operating losses
• Excess business loss limitations
• Employee retention credit
• Delay of payment of employer social security taxes
• Qualified improvement property
• Business interest expense
• Paycheck Protection Program (PPP)
• Families First Coronavirus Response Act (FFCRA)
• Section 139: tax-free reimbursements for COVID-19 expenses
• 2020 election considerations for year-end tax planning
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