Tax Incentives Play a Key Role in Assisting Businesses in the Coronavirus Stimulus Packages

Nothing in recent history will affect the U.S. economy to the same magnitude as the global Coronavirus (COVID-19) pandemic crisis.  The effect will reach government agencies, nonprofit organization, businesses and individuals throughout the country.

To date, 3 stimulus packages have been passed – with a 4^th likely in development.  The first, which President Trump signed March 3, provided $8.3 billion in funds for health agencies and testing, and for small-business loan subsidies.  The second, enacted March 18 and worth about $100 billion, had tax credits for employers offering paid sick leave, and increases to unemployment benefits and food assistance.  The third package of roughly $2 trillion, completed Friday, includes checks to households, bailouts for airlines and other distressed industries, and loans and grants for small business.

Businesses will need to evaluate and determine a plan to pursue the incentives that help them navigate these turbulent financial waters during this unprecedent time. 

Your Action Plan

It’s important you understand how to take full advantage of this overall opportunity.  The incentives are intended to provide capital to your business through tax savings that can be secured by (1) reducing your tax burden and leaving more money on hand and (2) give you the opportunity to receive more funds through refunds from tax paid in prior years. 

1. Explore opportunities provided in the Coronavirus stimulus packages to see what is applicable to your business.
2. Consider the potential benefit per program and overall because capturing one opportunity can preclude you from claiming another.
3. Understand you will likely be filing amended tax returns as a part of securing additional capital for your business. Many of the opportunities included in the stimulus package provides for changes where you can go back and claim additional expenses or credits to generate refunds. 
   1. Take this opportunity to consider generating additional losses and credits by capturing overlooked or under-utilized tax credits and incentives.
   2. Common areas surround employment incentives, research and development incentives and cost segregation.
4. Take advantage of the extended tax filing period to allow you to maximize existing credits and incentives to reduce your tax burden and leave more money on hand.
5. Develop a tracking document to help identify, assess and assign responsibilities to manage this overall effort.

Please note: This is our current analysis based on available information.  It is subject to change as additional information is released.