Due to the outbreak of the novel coronavirus, COVID-19, millions of United States residents have been forced to shelter in place in recent months, and the result has been a tremendous downturn in the U.S. economy. As businesses in every sector of the economy struggle just to keep the lights on, however, there is a measure of hope.
In late March, the United States signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. This substantial infusion of cash into the economy is supposed to help businesses of every size stay solvent as the COVID-19 pandemic rages on. Of course, as with every government interaction, there will be tax implications. But what will be the COVID-19 tax relief impact on your financial statement in Jamestown, ND? Read on to learn more about what’s in store.
Bonuses for keeping your staff employed
Across the country, countless businesses have been forced to shutter in response to a government order. While these companies remain closed, they’re watching helplessly as their coffers slowly empty. At that point, the temptation can be to lay off your staff. The CARES Act provides for those employers by offering a refundable employer tax credit equal to 50 percent of qualified wages.
That number is capped at $10,000 for larger businesses. For those companies with fewer than 100 employees, the CARES Act provides credit for every employee. Businesses with more than 100 employees can apply the tax credit to any employee forced to suspend their work.
Pulling back on the TCJA
One of the most significant COVID-19 tax relief impacts on your financial statement in Jamestown, ND is the temporary adjustments made to the Tax Cuts and Jobs Act. Companies suffering from net operating losses, certain business tax losses and business interest expenses can take advantage of scaled-back TCJA deduction limitations.
During this trying time, charitable contributions are also lumped in with business losses in the hopes that more companies will contribute to their community.
Deferment of payroll taxes
The CARES Act also makes allotments for both companies and self-employed people by allowing them to delay the payment of payroll taxes through the end of 2020. The US government allows those entities to deposit 50 percent of their payroll taxes before December 31, 2020, and the remainder by December 31, 2022.
Let us navigate the CARES Act
At the end of the day, the CARES Act is a dense 880-page document that will require the eyes of a professional to correctly decipher. For help reporting your finances with COVID-19 tax relief in Jamestown, ND, come to Craig S. Hanson, CPA.
Since we opened our doors all the way back in 1986, we have remained dedicated to every one of our clients. Whether you’re an established business, a growing company or a private individual, the team at Craig S. Hanson, CPA has the expertise you require. Visit us online or give us a call today to find out how we can help you—we look forward to assisting you soon!