CARES Act – Coronavirus Tax Relief – Injury At Work Advice

Initially printed on April 2, 2020. Final up to date as of June 9, 2020.

On March 18, 2020, President Trump signed into legislation the Households First Coronavirus Response Act (H.R. 6201), and on March 27, 2020, he signed into legislation the Coronavirus Help, Aid, and Financial Safety Act (the “CARES Act”) (H.R. 748). This alert summarizes sure tax-related provisions of those new legal guidelines and has been up to date to replicate subsequent steering from the Inside Income Service (the “IRS”) on these provisions, and the Paycheck Safety Program Flexibility Act of 2020 (H.R. 7010).

Sick and Household Depart Credit. Starting April 1, 2020, non-public employers and nonprofit organizations with fewer than 500 workers are required to pay workers (i) their full wage, (as much as $511/day or $5,110 whole) if the workers are unable to work due to Coronavirus-related (self-)quarantine or as a result of they’ve Coronavirus signs and are looking for medical assist, or two-thirds of their common wage (as much as $200/day or $2,000 whole) in the event that they take time without work to take care of a member of the family that’s in (self-)quarantine due to Coronavirus or following a toddler’s college closing, in every case for as much as 10 days, and (ii) two-thirds of their common wage (as much as $200/day or a $10,000 most) if the workers are unable to work as a result of they should care for a kid. An employer’s obligation for paid sick depart ends when the employer has both paid the worker for the variety of hours that the worker typically works inside a two-week interval (as much as 80 hours), or when the worker has returned to work. To be eligible for paid depart, the worker should have labored for the employer for at the very least 30 days (i.e., been on payroll). An worker who’s laid off on or after March 1, 2020 and rehired by the identical employer earlier than the top of the yr is eligible for paid depart with out having to fulfill the 30-day requirement after being rehired as long as the worker glad this requirement earlier than being laid off.

A refundable payroll tax credit score is obtainable to employers via 2020 to cowl wages paid to workers whereas they take time without work underneath these new sick and household depart applications between April 1, 2020 and December 31, 2020, even when the wages are paid after this era. The sick depart credit score is for wages as much as $511/day or $200/day if the sick depart is to take care of a member of the family or little one following the kid’s college closing. The household depart credit score is for wages as much as $200/day (or a $10,000 most) whereas the worker is receiving paid household depart. The credit could be claimed every quarter. The credit are usually not accessible for employers receiving a credit score for paid household and medical depart underneath the 2017 Tax Lower and Jobs Act (the “TCJA”). Employers could obtain each these credit and the worker retention credit score (see under), however not for a similar wages. Employers receiving loans underneath the CARES Act as a part of the Small Enterprise Administration’s Paycheck Safety Program (the “PPP”) are eligible for the credit for paid sick and household depart.

The directions to Kind 7200, Advance Fee of Employer Credit Resulting from COVID-19, present that employers could use the sick and household depart credit to offset all federal employment taxes (together with federal withholding tax, and the employer’s and the worker’s share of social safety and Medicare taxes), and any extra credit are refundable. The IRS has posted additional steering on its web site on easy methods to receive the sick and household depart credit score. For additional data on this steering, please see our weblog publish.

The sick depart credit score covers 100% of a self-employed particular person’s certified sick depart equal quantity, or 67% of the person’s certified sick depart equal quantity if they’re caring for a sick member of the family, or caring for a toddler following the kid’s college closing. A self-employed particular person’s certified sick depart equal quantity is the variety of days in the course of the taxable yr that the person can’t carry out providers and is entitled to sick depart (as much as 10 days), multiplied by the lesser of common every day self-employment revenue (or 67% of that revenue if they’re caring for a sick member of the family or little one following a college closing), or $511/day to take care of the self-employed particular person ($200/day to take care of a sick member of the family or little one following a college closing). Self-employed people can obtain a household depart credit score for as many as 50 days multiplied by the lesser of $200 or 67% of their common self-employment revenue, as much as a most of $10,000.

Worker Retention Credit score for Employers. An employer is eligible for a refundable payroll tax credit score equal to 50% of sure “certified wages” (together with sure well being plan bills) paid to its workers starting March 13, 2020 via December 31, 2020 if the employer is engaged in a commerce or enterprise in 2020 and the wages are paid (i) whereas operation of that commerce or enterprise is absolutely or partially suspended attributable to a governmental order[1] associated to COVID-19 or (ii) in the course of the interval starting within the first quarter wherein gross receipts for that commerce or enterprise are lower than 50% of gross receipts for a similar calendar quarter of 2019 and ending on the finish of the primary subsequent quarter wherein gross receipts are greater than 80% for a similar calendar quarter of 2019. The worker retention credit score can be utilized to offset all federal payroll taxes, together with federal withholding tax, and the employer’s and worker’s share of social safety tax and Medicare, however not the federal unemployment tax (“FUTA”).

The operation of an employer’s commerce or enterprise is “partially suspended” attributable to a governmental order associated to COVID-19 if the employer is ready to “proceed some, however not all of its typical operations” on account of the governmental order.[2] If an employer’s office is closed by a governmental order for sure functions, however the employer’s office stays open for different functions or the employer is ready to proceed sure operations remotely, the employer’s operations are thought-about to be partially suspended.[3] Thus, even a necessary enterprise is eligible for the credit score if it will probably show that some portion of its operations have been suspended attributable to a COVID-19-related governmental order. Subsequently, though a hospital offers important providers, if elective surgical procedures have been suspended attributable to a governmental order, the hospital must be eligible for the credit score.[4] Nevertheless, a necessary enterprise will not be thought-about to be absolutely or partially suspended if a governmental order causes its prospects to remain at residence or the governmental order applies solely to non-essential companies, even when the governmental order could affect the extent of enterprise.[5] An employer that operates a commerce or enterprise in a number of places and is topic to state and native governmental orders limiting operations in some, however not all, jurisdictions is taken into account to have a partial suspension of its operations.[6] It’s much less clear that an employer’s operations are partially suspended if it continues to supply all providers to all prospects, however is unable to generate the identical degree of recent enterprise.

For employers with greater than 100 full-time workers, the CARES Act offers that the credit score is obtainable solely with respect to wages paid to an worker who’s “not offering providers” as a result of circumstances described in (i) or (ii) above. Thus, if an worker is being paid wages for a motive unrelated to the circumstances described in (i) or (ii) above (like paternity or maternity depart), the credit score is unavailable. Nevertheless, if an worker is unable to totally work attributable to one of many circumstances described in (i) or (ii) above, the credit score is obtainable for the portion of the worker’s time that the worker will not be working.[7] Accordingly, if an worker is working 25% of a pay interval, underneath the FAQ interpretation, wages eligible for the credit score would seem to incorporate the wages paid to worker for 75% of the interval throughout which the worker will not be offering providers as a result of circumstances described in (i) or (ii) above.

All individuals handled as a single employer underneath part 52(a) or (b) or part 414(m) or (o) are handled as one employer for all functions of the credit score, together with for functions of figuring out whether or not they exceed the 100 full-time worker threshold. First, corporations associated via better than 50% possession (by vote or worth) are handled as one employer for functions of the 100 full-time worker threshold. Second, chains of organizations (whether or not or not integrated) conducting trades or companies could also be handled as one employer if they’re widespread management. The check for widespread management is determined by the kinds of organizations within the chain of possession, however typically requires that companies be related via possession of better than 50% of the vote or worth of every company and partnerships be related via possession of greater than 50% of income or capital. In Solar Capital Companions III, LP v. New England Teamsters & Trucking Trade Pension Fund, 724 F.3d 129 (1st. Cir. 2013), the First District Courtroom of Appeals held {that a} non-public fairness fund would sometimes be handled as conducting a commerce or enterprise for functions of a management check underneath part 414 that’s just like the rule in part 52(b) except the fund can set up that its funding is really passive, which is a excessive bar. Subsequently, underneath the court docket’s holding, two companies greater than 50% of the vote or worth of every of which is owned by a personal fairness fund can be handled as a single employer for functions of the 100 full-time worker rule. In Solar Capital, the court docket handled parallel funds as one entity for tax functions the place the funds have been run by the identical sponsor, shared a single common accomplice, and invested almost identically.[8] Subsequently, underneath Solar Capital, if two parallel funds every personal 50% or much less of two companies, however the funds within the mixture personal greater than 50% of every company, each companies can be handled as a single employer. Nevertheless, underneath a second Solar Capital case, the place a single sponsor managed two funds that didn’t put money into parallel, the holdings of the 2 funds weren’t aggregated.[9] Lastly, part 414(m) incorporates particular guidelines for “affiliated service teams”.

The credit score is capped at $5,000 (50% of $10,000 certified wages) per worker for all calendar quarters. Part 501(c) tax-exempt organizations are eligible for the credit score, however governmental entities and corporations receiving PPP loans underneath the CARES Act are usually not. If an organization receives a PPP mortgage, all different individuals which can be handled as one employer with that firm underneath the foundations described above are ineligible for the credit score.

Deferral of Employer’s Share of Social Safety. Employers and self-employed people could delay cost of the 6.2% employer share of the social safety tax (however not the employer’s share of FUTA or the 1.45% employer share of the Medicare tax) via the top of 2020. The tax is payable over the next two years with half due by December 31, 2021 and the opposite half by December 31, 2022. These provisions can be found to everybody, no matter revenue. An employer that receives a PPP mortgage is eligible for social safety tax deferral.[10]

First and Second Quarter Estimated Tax Funds; Different Extensions. The Treasury and the IRS prolonged the due dates for the primary quarter estimated tax funds and the April 15 submitting date to July 15, 2020. This extension additionally applies to quite a lot of taxpayer deadlines and due dates for different filings and time-sensitive actions that fall between April 1, 2020 and July 15, 2020. Though the due date for second quarter estimated tax funds of self-employed people has been prolonged, employers required to deposit second quarter estimated tax funds for payroll taxes are nonetheless required to take action by the traditional due dates.

Extensions for Like-Sort Exchanges. If the final day of both the 45-day interval to determine substitute property for a piece 1031 like-kind alternate or the 180-day interval to shut on substitute property falls on or after April 1, 2020 and earlier than July 15, 2020, then the relevant interval is prolonged to at the very least July 15, 2020. Though the IRS steering granting this extension references Income Process 2018-58, which extends these durations to the later of (i) 120 days or (ii) the final date of the extension interval for a federally declared catastrophe (i.e., July 15, 2020 for the COVID-19 emergency), it’s not clear that the IRS steering extends the time interval past July 15, 2020.

Certified Alternative Zone Funds. If the final day of the 180-day interval for a taxpayer to speculate eligible achieve in a certified alternative zone fund falls on or after April 1, 2020 and earlier than July 15, 2020, the taxpayer has till July 15, 2020 to make the funding. If a certified alternative zone enterprise (a “QOZB”) is situated in a “certified alternative zone” inside a federally declared catastrophe, the QOZB could obtain as much as a further 24 months to eat its working capital belongings so long as it in any other case satisfies the necessities of the working capital protected harbor. A federally declared catastrophe features a catastrophe or emergency declared underneath the Stafford Catastrophe Aid and Emergency Help Act, Pub. L. 100-107 (the “Stafford Act”). On March 13, 2020, the President issued a letter declaring an “emergency” underneath the Stafford Act and has subsequently declared a catastrophe in each state. The Preamble to the ultimate alternative zone laws offers that the extension is obtainable provided that the QOZB is delayed in utilizing working capital belongings as a result of catastrophe, so a QOZB ought to preserve cautious data of any delays to doc how the COVID-19 pandemic has impacted its skill to make use of working capital belongings.

Partnership Audit Guidelines. Partnerships which can be topic to the centralized audit and have already filed a Kind 1065 and offered Schedules Okay-1 to their companions are permitted to file an amended partnership return for 2018 or 2019 in order that they will profit from the provisions within the CARES Act that present tax reduction in response to the COVID-19 pandemic. Partnerships which can be eligible to amend their returns should accomplish that and furnish corresponding Schedules Okay-1 to their companions by September 30, 2020.

NOLs; Extra Enterprise Losses. A company could carry again its losses from 2018, 2019, and 2020 for 5 years, and should apply its NOLs to totally scale back taxable revenue (moderately than solely 80% of taxable revenue underneath prior legislation). A REIT will not be permitted to hold again losses. These provisions will briefly reverse sure modifications made by the TCJA. Nevertheless, NOL carrybacks might not be used to offset revenue includible underneath part 965 (the deemed repatriation provision enacted within the TCJA). Company taxpayers that might be able to carryback losses inside a 120-day interval are permitted to make sure essential elections, together with the election to forego the carryback. The surplus enterprise loss provision of part 461(l)(1) (which disallows enterprise losses in extra of $250,000 for a single taxpayer and $500,000 for a married couple submitting collectively) can be retroactively suspended for 2018 via 2020.

Elevated Part 163(j) Limitation on Enterprise Curiosity Expense Deduction From 30% to 50%. The part 163(j) limitation on enterprise curiosity expense deductions is elevated from 30% to 50% for 2019 and 2020. Taxpayers could elect to make use of their 2019 adjusted taxable revenue for functions of calculating their part 163(j) limitation for 2020. Taxpayers can also elect out of the rise (for instance, to defer the deduction and keep away from producing or rising a web working loss which can once more be usable solely to the extent of 80% of taxable revenue starting in 2021; or to reduce the quantity of curiosity topic to the bottom erosion and anti-abuse tax or the “BEAT”). The rise within the limitation applies to companions in partnerships solely in 2020 (and never in 2019) however, for companions that don’t elect out of the availability, 50% of the surplus enterprise curiosity of a accomplice that’s accrued in 2019 is deemed to accrue in 2020 and isn’t topic to any limitation in 2020.

Small Enterprise Mortgage Forgiveness Does Not Give Rise To Cancellation of Indebtedness Earnings. The CARES Act features a mortgage forgiveness program underneath the PPP. Any cancellation of debt revenue underneath the PPP is tax-free (i.e., excluded from revenue), and doesn’t lead to a lack of tax attributes. Nevertheless, the IRS has held {that a} borrower whose mortgage is forgiven could not deduct the bills that relate to the forgiven quantity (i.e., the eight weeks of wages, worker advantages, curiosity, lease, and utilities that decided the forgiven quantity).[11] Senator Chuck Grassley (R., Iowa), the Chair of the Senate Finance Committee, has mentioned that the IRS misconstrued Congressional intent, and Consultant Richard Neal (D., Mass), the Chair of the Home Methods and Means Committee, has indicated that he intends to reverse the IRS steering and permit the deductions. An employer that receives a PPP mortgage is eligible for social safety tax deferral.[12]

Tax Remedy of Financial Stabilization Investments. The Treasury is permitted to make or assure as much as $500 billion in debt and fairness investments in companies, states, and municipalities affected by COVID-19. The IRS has been directed to difficulty steering offering that the acquisition of warrants, inventory choices, widespread or most well-liked inventory or different fairness underneath this system doesn’t lead to an possession change for functions of part 382. Whereas the brand new legislation doesn’t by its phrases stop investments from contributing to a piece 382 possession change, it seems according to the intent of the laws for the IRS to completely disregard investments for functions of figuring out whether or not a taxpayer has skilled a piece 382 possession change. Any loans made or assured by the Treasury underneath this system are handled for tax functions as debt issued at par, and acknowledged curiosity on these loans are handled as certified acknowledged curiosity. In consequence, loans issued or assured underneath this system are usually not handled as issued with unique difficulty low cost for tax functions, and money foundation taxpayers are usually not permitted to deduct curiosity on the loans till that curiosity is paid.

No Repeal of Downward Attribution. The CARES Act doesn’t embrace a provision from a previous model of the legislation that might have restored part 958(b)(4). (Earlier than its removing as a part of the TCJA, part 958(b)(4) prevented a United States individual from being handled as proudly owning the inventory owned by its international proprietor.)

Instant Expensing of Prices Related With Bettering Certified Enchancment Property. The CARES Act corrects an error within the TCJA that prevented companies from expensing sure prices for enhancements to “certified enchancment property”, and required the prices to be depreciated over the 39-year lifetime of the constructing. Certified enchancment property is any enchancment to the inside of a nonresidential constructing that’s positioned in service after the constructing is first positioned in service. Certified enchancment property doesn’t embrace enhancements which can be attributable to the enlargement of the constructing, elevators or escalators, or the interior structural framework of the constructing. The change is retroactive to the date of enactment of the TCJA.

Acceleration of Various Minimal Tax (AMT) Credit. The TCJA repealed the company AMT and allowed companies to assert company AMT credit over a number of years till 2021. Beneath the CARES Act, companies with excellent AMT credit are allowed to assert their credit instantly.

Financial Affect Funds. Particular person filers with adjusted gross incomes of $75,000 or much less (or $112,500 or much less for a head of family) are eligible for a refundable tax credit score for 2020 of $1,200, and married {couples} submitting collectively with adjusted gross incomes of $150,000 or much less are eligible for a refundable tax credit score for 2020 of $2,400. For people, heads of households, and married {couples} with adjusted gross revenue of $75,000/$112,500/$150,000 or much less, there’s a further $500 refundable credit score for every of their “qualifying youngsters”. Though the credit score is for 2020, a taxpayer is handled as if she or he had overpaid an quantity equal to the credit score in 2019 (or if the taxpayer has not but filed a 2019 tax return, 2018) in order that the taxpayer is eligible to obtain his or her refund instantly. No minimal revenue is important to obtain the credit score. For taxpayers with incomes over the $75,000/$112,500/$150,000 threshold, the credit score is decreased by 5% of the taxpayer’s adjusted gross revenue over $75,000/$112,500/$150,000. This leads to an entire section out for taxpayers who in 2019 made greater than $99,000 (people), $146,500 (heads of households), and $198,000 (joint filers). Taxpayers who haven’t filed a 2018 or 2019 tax return as a result of they weren’t required to take action, however who’re in any other case eligible to obtain an financial influence cost (i.e., U.S. residents or residents with a legitimate social safety quantity who fulfill the necessities above and haven’t been claimed as a dependent of one other taxpayer), could present the required data on the IRS web site to obtain their cost.

$300 Above the Line Charitable Contribution Deduction; Rest of the Charitable Contribution Limitation. A everlasting “above the road” charitable contribution deduction is allowed for as much as $300 of money contributions to sure part 501(c)(3) public charities starting in 2020, even when the person takes the usual deduction. The 50% adjusted gross revenue limitation is suspended for charitable contributions by people in 2020 (in order that people can obtain a charitable contribution deduction for as much as 100% of their 2020 adjusted gross revenue), and the 10% taxable revenue limitation on charitable contribution deductions for companies is elevated to 25%. Lastly, the cap on deductions for charitable contributions of meals stock in 2020 is briefly elevated from 15% to 25% of taxable revenue (within the case of a C company) or mixture web revenue for all related trades or companies (within the case of a person).

Worker Advantages. For modifications that have an effect on worker advantages, please see our ERISA Observe Middle weblog publish.

[1] Governmental orders embrace orders, proclamations, or decrees from the federal authorities, or any state or native authorities that restrict commerce, journey, or group conferences attributable to COVID-19 in a fashion that impacts an employer’s operation of its commerce or enterprise (together with orders that restrict hours of operation) and, if they’re from a state or native authorities, are from a state or native authorities that has jurisdiction over the employer’s operations. IRS, “28. What ‘orders from an acceptable governmental authority’ could also be taken into consideration for functions of the Worker Retention Credit score?”, COVID-19-Associated Worker Retention Credit: Common Info FAQs (April 29, 2020) (the “FAQs”).

[2] “3. When is the operation of a commerce or enterprise partially suspended for the needs of the Worker Retention Credit score?”, FAQs. The Joint Committee on Taxation (the “JCT”) has indicated {that a} restaurant in a state underneath a statewide order that eating places supply solely take-out providers or a live performance venue in a state underneath a statewide order limiting gatherings to not more than 10 folks would meet the governmental order check. An accounting agency that’s topic to a countywide directive from public well being authorities to stop all actions apart from minimal fundamental operations and that closes its workplaces and doesn’t require workers who can’t do business from home (e.g., custodial workers, mail room workers) to work additionally meets this check. Joint. Comm. Tax’n, Description of the Tax Provisions of Public Regulation 116-136, The Coronavirus Help, Aid, and Financial Safety (“CARES”) Act at 38 (Apr. 22, 2020), https://www.jct.gov/publications.html?func=startdown&id=5256 (the “JCT Report”).

[3] For instance, a restaurant enterprise is taken into account to be partially suspended if it should shut its restaurant places to in-room eating attributable to a governmental order closing all eating places for sit-down service, however is allowed to proceed meals or beverage gross sales to the general public on a carry-out, drive-through, or supply foundation. “34. If a governmental order requires an employer to shut its office for sure functions, however the office could stay operational for restricted functions, is the employer thought-about to have a suspension of operations?”, FAQs. Nevertheless, a software program firm will not be thought-about to be partially suspended if it closes its workplace in accordance with a citywide order closing all non-essential companies, however is ready to proceed operations corresponding to its operations previous to the closure by having its workers work remotely. “33. If a governmental order requires an employer to shut its office, however the employer is ready to proceed operations corresponding to its operations previous to the closure by requiring workers to telework, is the employer thought-about to have a suspension of operations?”, FAQs.

[4] A vital enterprise could also be thought-about to be partially suspended if the enterprise’s suppliers are unable to make deliveries of vital items or supplies attributable to a governmental order that causes the provider to droop its operations. “31. If a governmental order causes the suppliers to a necessary enterprise to droop their operations, is the important enterprise thought-about to have a suspension of operations?”, FAQs.

[5] “30. If a governmental order requires non-essential companies to droop operations however permits important companies to proceed operations, is the important enterprise thought-about to have a full or partial suspension of operations?” and “32. If a governmental order causes the purchasers of a necessary enterprise to remain at house is the important enterprise thought-about to have a suspension of operations?”, FAQs. The JCT report contains an instance of a grocery retailer in a state that typically imposes limitations on meals service, gathering measurement, and journey exterior the house however exempts grocery shops (and journey to and from grocery shops) from any COVID-19 associated restrictions as a result of they’re “important companies” which can be excepted from restrictions, and offers that the grocery retailer wouldn’t meet the governmental order check. Nevertheless, slight variations within the instance would possibly result in totally different conclusions. For instance, if the grocery retailer within the instance additionally have been to usually function a sit-down restaurant (with out supply service), it seems that the restaurant’s closure on account of a governmental order would qualify as a partial suspension of the operation of the shop’s commerce or enterprise, and subsequently the shop can be eligible for the credit score, and if the shop had greater than 100 workers, can be eligible for the credit score solely with respect to wages paid to the restaurant workers who have been unable to work due to the order.

[6] “33. If a governmental order requires an employer to shut its office, however the employer is ready to proceed operations corresponding to its operations previous to the closure by requiring workers to telework, is the employer thought-about to have a suspension of operations?”, FAQs.

[7] See “48. What’s the definition of ‘certified wages’?” and “52. Might an Eligible Employer that averaged greater than 100 full-time workers throughout 2019 deal with all wages paid to workers as certified wages?”, FAQs (offering an instance wherein an employer with greater than 100 full-time workers that’s compelled to droop its operations on the finish of the primary calendar quarter of 2020 is eligible for the credit score with respect to wages paid to workers who stopped working in the course of the portion of the quarter when the enterprise is suspended); JCT Report, supra observe 1 at 39-40 (offering two examples that clarify that an employer is entitled to credit for wages paid to workers for the portion of their time that they have been unable to work); “CARES Act: Worker Retention Credit score FAQ”, United States Senate Committee on Finance (Mar. 31, 2020), https://www.finance.senate.gov/chairmans-news/cares-act-employee-retention-credit-faq. (“[i]f an worker is performing providers on a decreased schedule, wages paid to the worker are solely handled as certified wages in the event that they exceed what the worker would have in any other case been paid for the providers carried out. In that case, employers will obtain a credit score for the distinction between the whole wages paid to the worker and the quantity the employer would have paid for the decreased hours or providers truly offered by the worker.”). Coverage causes help this interpretation. If the statute imposed a cliff impact, employers can be discouraged from having workers carry out any providers in order to profit from tax credit. This interpretation allows an employer to make use of workers as needed for its enterprise operations (and relieves the federal government of offering tax credit with respect to that use), with out penalizing the employer by denying credit for certified wages paid to the worker in the course of the interval she or he was not offering providers.

[8] One of many funds at difficulty within the Solar Capital case was truly comprised of two parallel funds, which the court docket handled as a single entity. See footnote Three of Solar Capital Companions III, 724 F.3d at 133 n.3; Solar Capital Companions III, LP v. New England Teamsters & Trucking Trade Pension Fund, 943 F.3d 49, 52 n.1 (1st. Cir. 2019).

[9] Solar Capital Companions III, LP v. New England Teamsters & Trucking Trade Pension Fund, 943 F.3d 49 (1st. Cir. 2019).

[10] Beneath the CARES Act, an employer that acquired a PPP mortgage was not eligible for the social safety tax deferral for taxes due after it acquired discover from a lender that the mortgage was forgiven. See IRS Information Launch, “Deferral of employment tax deposits and funds via December 31, 2020,” (Apr. 16, 2020). Nevertheless, on June 5, 2020, President Trump signed into legislation the Paycheck Safety Program Flexibility Act of 2020 (H.R. 7010), which eliminates this restriction and permits an employer to defer social safety tax deposits even after its PPP mortgage is forgiven.

[11] Discover 2020-32.

[12] Beneath the CARES Act, an employer that acquired a PPP mortgage was not eligible for the social safety tax deferral for taxes due after it acquired discover from a lender that the mortgage was forgiven. See IRS Information Launch, “Deferral of employment tax deposits and funds via December 31, 2020,” (Apr. 16, 2020). Nevertheless, on June 5, 2020, President Trump signed into legislation the Paycheck Safety Program Flexibility Act of 2020 (H.R. 7010), which eliminates this restriction and permits an employer to defer social safety tax deposits even after its PPP mortgage is forgiven.