Tax-Related Provisions for Businesses

The CARES Act introduced several retroactive business tax changes. A highlight of the modifications include the following: 

•  Qualified improvement property is now 15-year property instead of 39-year property effective 1/1/2018. 
  • The modification corrects an oversight from the TCJA (Tax Cuts and Jobs Act) affecting certain restaurant and retail businesses property.  Now, this property once again qualifies for bonus depreciation.   
• Net operating losses (NOLs) for years starting in 2018-2020, can be carried back 5 years. 
  • The NOL 80% limitation has been suspended until tax years starting in 2021.   
  • In other words, the taxable income limitation on the use of the NOL will be temporarily removed to allow the NOL to fully offset income back to 2013 at the earliest. 
• Excess business losses removed until 2021.   
  • The limit on deducting businesses losses in excess of $250,000 (single) or $500,000 (joint) will be temporarily repealed backdated to 2018, not taking effect until 2021. 
• Business Interest Limitation Adjustments  
  • 163(j) business interest expense limitation is now 50% (instead of 30%) for tax years beginning in 2019 (except partnerships) and 2020.   
  • 163(j) business interest limitation adjustments for 2019 partnerships are made at the partner level partially in 2019 and partially in 2020 subject to special elections. 
• Full recovery of corporate AMT credits for tax years beginning in 2019. 
  • AMT was repealed as part of the TCJA (Tax Cuts and Jobs Act). Corporate AMT credits were to be available as refundable credits over several years ending in 2021. 

Updated 4/2/2020 at 12:00 PM