We use cookies to improve your experience and optimize user-friendliness. Read our cookie policy for more information on the cookies we use and how to delete or block them. To continue browsing our site, please click accept.

Senate Republicans Release Draft of Phase 3 Coronavirus Legislation

On March 19, 2020, Senate Republicans released a draft bill intended to start the discussion with Senate Democrats on Phase 3 coronavirus legislation. The bill includes a lot of significant tax and non-tax provisions for individuals and businesses.

Let’s start with a summary of some of the more significant provisions affecting businesses.

  1. Provides loans to employers to cover payroll, and the loans are forgivable in a tax-free manner in certain circumstances.
  2. Delays the due date for estimated tax payments of corporations to October 15, 2020. [This is in addition to IRS Notice 2020-18, issued March 20th, that provides for a filing and payment extension to July 15, 2020 for 2019 income taxes and 2020 estimated income taxes due April 15, 2020.]
  3. Delays the payment of certain employer and self-employment payroll taxes.
  4. Temporarily eliminates the 80% income limitation on the use of NOLs and provides for a 5-year carryback of certain NOLs.
  5. Accelerates the refundability of AMT credits for C corporations.
  6. Temporarily expands the ability to deduct interest payments by limiting section 163(j) to 50% (from 30%) of adjusted taxable income. [Separately, the proposed section 163(j) regulations have cleared OIRA review, so the final the proposed section 163(j) regulations should be issued shortly.]
  7. Makes a number of technical corrections to provisions of the TCJA, including qualified improvement property, NOL effective date, adjusting the downward attribution rules for CFC purposes, and a change to section 965 (addressing repatriation).
If you have questions, please contact your Withum advisor or a member of Withum’s Tax Services Group.

Now for a summary of some of the more significant provisions affecting individuals.

  • Provides rebates of up to $1,200 for single filers and $2,400 for joint filers, with $500 increases for each child. Phase-outs start at AGIs of $75,000 for single filers and $150,000 for joint filers.
  • Delays estimated tax payments to October 15, 2020.
  • Waives certain early withdrawal penalties for coronavirus-related withdrawals from qualified retirement plans.
  • Allows up to $300 of charitable deductions for taxpayers taking the standard deduction for tax years beginning in 2020, and relaxes the limitation on taxpayers who itemize.

Once again, these provisions represent a Republican “wish list” and they do not include the priorities of Senate Democrats. We will monitor developments and keep you posted.

Tax Services

Previous Post
Next Post
Article Sidebar Logo Prepare for COVID-19 Impacts Visit Our Resource Center
X

Get news updates and event information from Withum

Subscribe