COVID and Taxes: What Entrepreneurs Need to Know | NAWBO

Have taxes on your mind this month? Our partners at H&R Block and Small Business Roundtable do, too. During a recent webinar, they shared these key things that entrepreneurs need to know.

• Five most important pieces of tax legislation that include a variety of broad and directed COVID-19-related relief for individuals and in particular small businesses:   

  • FFCRA, enacted 3/18/20
  • CARES Act, enacted 3/27/20
  • PPPFA, enacted 6/5/20
  • CAA, enacted 12/27/20
  • ARPA, enacted 3/11/21

• Key provisions of these laws:

  • Paycheck Protection Program (PPP)
  • Employee Retention Credit (ERC)
  • Credits for paid sick and family leave
  • Economic Injury Disaster Loans (EIDLs)
  • Payroll Tax Deferral (PTD)
  • Net operating loss (NOL) changes
  • Targeted business relief (restaurants, venues, etc.)
  • Funding to states

• Other federal tax changes:

  • NOL changes allowed more refunds for prior years
  • Qualified improvement property depreciation period
  • Non-taxable targeted EIDLs
  • Non-taxable restaurant revitalization grants
  • Many program extensions (PPP, ERC) through EOY 2021
  • Expanded employer dependent care benefit limits
  • Full meal deductions (for 2021 and 2022)
  • Retroactive 2020 UI exclusion of up to $10,200

• Independent state relief programs:

  • Many states offering their own small business relief
  • ARPA includes additional funds for states
  • States do not always conform to all the new laws

• Potential tax issues of running a business from home:

  • States tax their businesses based on the concept of “nexus”
  • Some states could lose billions in income and sales tax revenue due to changes in business behavior
  • Has led some states and localities to adopt aggressive tax stances (consider if your business operates without a storefront or online; targets new customers in different locations than before; has remote employees; or changed its expenses)

• Looking ahead:

  • What are some new strategies to consider for your business?
  • Does this change tax preparation for your business?
  • What are lessons small business can learn?
  • Do you know enough about these new laws to feel confident come tax time?

WATCH THE WEBINAR NOW »