The Tax Effects on C Corporations of Coronavirus-Related Stimulus Acts

Abstract

This paper discusses the tax effects, with a numerical case example, of the three new refundable payroll credits and the forgiven Small Business Interruption Loans created by the Families First Coronavirus Response Act (FFCRA) (2020) and the Coronavirus Aid, Relief and Economic Security (CARES) Act (2020) respectively. The CARES Act (2020) changed business tax provisions in three main areas: net operating losses, business interest expense deduction, and qualified improvement property. Through three case examples, this paper illustrates numerically how taxpayers can reduce their Federal corporation income tax liabilities by either filing amended returns for past tax years and/or strategically planning to take advantage of the changes in tax rules created by the CARES Act (2020).