Employee Retention CreditThe provision provides a refundable payroll tax credit for 50% of wages paid by an eligible employer to certain employees during the COVID-19 crisis. Employers eligible for the credit include those whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings, or those who have experienced a greater than 50% reduction in quarterly receipts (year over year). For employers with 100 or fewer employees, all wages are eligible for the credit, regardless of whether the employee is furloughed.
Delay of Payment of Employer Payroll TaxesUnder the CARES act, the due date for the employer's portion of payroll tax (Social Security and Medicare) for the period beginning on the date of the enactment of this bill through January 1, 2021, is deferred until December 31, 2021. Half of the payroll tax deferred during said period is due December 31, 2021, with the remaining half due December 31, 2022.
Temporary Repeal of the Taxable Income Limit for NOLs and Modification of CarrybackThe CARES act removes (temporarily) the taxable income limitation to allow an NOL to fully offset income. The amendments made apply to tax years beginning after December 31, 2017 and to tax years beginning on or before December 31, 2017 to which NOL's arising in tax years after December 31, 2017 are carried.
The act also provides that NOLs arising in tax years beginning after December 31, 2018 and before January 1, 2021 can be carried back to each of the five preceding tax years of such loss.
Bonus Depreciation for Qualified Improvement PropertyA technical correction was provided in the CARES act which designates QI Property as 15-year property for depreciation purposes, making the property eligible for 100% bonus depreciation. The amendments are effective for property placed in service after December 31, 2017.