Paycheck Protection Program

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) which includes the Paycheck Protection Program (“PPP”) to provide relief to many small businesses impacted by the spread of Covid-19.

The PPP provides short-term cash flow assistance to small businesses to help these businesses and their employees deal with the devastating economic impact of the Covid-19 pandemic.  PPP loans are made by lenders certified by the SBA and guaranteed by the federal government. Generally, PPP loans can be as large as 250% of a business's average monthly payroll costs over the last 12 months, not to exceed $10 million. The borrowed fund will eventually be discharged or forgiven if the businesses keep their employees and pay them at least 75% percent of their prior-year compensation.

Generally, the PPP is available to small businesses with 500 or fewer employees.  Eligible small businesses also include sole-proprietors, independent contractors, or other self-employed individuals.

PPP loans must be made prior to June 30, 2020.

The SBA is expected to issue regulations within 15 days after the enactment of CARES Act.  Contact your bank or any SBA certified lenders for additional information.

CARES Act에 따른 세금 혜택

코로나바이러스에 피해를 입은 자들을 돕고 경제를 부양하기 위한 법안 (Coronavirus Aid, Relief, and Economic Security Act 의 앞 글자를 따 “CARES Act”라고도 불린다)이 수일내로 트럼프대통령의 서명을 거쳐 입법화가 될 것으로 예상되는 가운데, 이 법안에는 이번 코로나바이러스로 인해 피해를 입은 여러가지 개인과 법인을 돕기 위한 세금혜택이 포함되어 있다. 대표적인 몇가지 안은 다음과 같다:

이월결손금(Net Operating Loss 혹은 NOL)에 대한 일시적 제한 해지

기존에는 NOL이 과거로 소급공제 되지 않고 향후에 생기는 과세소득에만 사용이 가능했으나, 2018년도부터 2020년도까지 발생하는 NOL에 대해서 5년까지 과거로 돌아가 과거에 납부했던 세금을 환급 받을 수 있다. 또한, 2017년부터 2018년까지의 NOL에 대해서는 2년까지 과거로 돌아가 소급공제를 받을 수 있다.

초과 사업손실(Excess Business Loss)에 대한 제한 해지

2017년도 세제개혁으로 시작된 초과 사업손실에 대한 제한이 2020년도까지 해지된다.

이자비용공제에 대한 규정 Section 163(j)의 변경

현재로서는 사업상 이자비용의 공제는 감가상각비 및 세금 등의 조정을 한 과세소득의 30%까지로 제한된다. 이 법안이 통과되게 되면 2020년도까지 조정된 과세소득의 30%가 아닌 50%까지 이자비용이 인정된다.

최저한세 크레딧 (AMT Credit) 환급

기존에는 2025년도까지 나눠서 최저한세 크레딧을 환급받게 되었으나, 납세자가 선택을 하여 일시적으로 환급을 받을 수 있게된다.

급여세 납부 의무의 연장

이 법안이 통과되게 될 시에는 2020년도 급여세 (employer portion) 중 50%는 12/31/2021까지, 나머지 50%는 12/31/2022까지 납부할 수 있도록 납부의무를 이연시켜 준다.

Tax Reliefs included in the CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act” or “Act”), expected to be enacted by President Trump in the next few days, contains many tax relief measures for businesses to assist individuals and businesses impacted by the economic effects of the COVID-19 pandemic.  Here are some key provisions:

Net Operating Loss (“NOL”) Operating Rule Change

The Act will allow an NOL from tax years beginning in 2018 through 2020 to be carried back for five years.  The Act also allows two-year carryback of NOLs generated in the tax year beginning in 2017 and ending in 2018.

Excess Business Loss Limitation Suspension

The Act temporarily suspends the excess business loss limitation adopted as part of the 2017 Tax Reform through 2020.

Modification to Section 163(j) Business Interest Deduction Limitation

Currently, business interest deduction is limited to 30% of taxable income, adjusted by depreciation, amortization and tax.  The Act will temporarily increase this limitation percentage to 50% through 2020, allowing deduction that would have been otherwise limited.

Refundable AMT Credit

The entire amount of AMT credits that are currently scheduled to be refunded through 2025 can be refunded with an election.

Deferment of Employer Payroll Tax Payments

The Act defers payment date of 2020 employer payroll taxes. 50% of the deferred tax is to be paid by December 31, 2021 and the remainder by December 31, 2022.

The IRS Notice 2020-17 (the “Notice”), issued in connection with the President Trump’s Emergency Declaration relating to the coronavirus 2019, provides relief for certain taxpayers to make payments of federal income tax.  This relief from income tax payment deadlines is being provided to “affected taxpayers,” defined in the Notice as individuals and corporations with federal income tax payment due April 15, 2020.

Under this relief, individual taxpayers with federal income tax payment due April 15, 2020 may postpone the payment to July 15, 2020.  The applicable postponed payment amount is up to $1 million regardless of filing status.

Corporate taxpayers with federal income tax payment due April 15, 2020 may postpone the payment to July 15, 2020.  The applicable postponed payment amount is up to $10 million for each consolidated group or for each C corporation that in not filing a consolidated return.

Note that no extension is provided for the payment or deposit of any other type of Federal tax, or for the filing of any tax return or information return.

Please see additional detail in the Notice.  https://www.irs.gov/pub/irs-drop/n-20-17.pdf