CARES Act – Business Tax Provisions

Patty Fleming

Congress has just passed a new bill called the CARES Act to provide stimulus and relief for the coronavirus situation.  There are many aspects of the bill here are some of the business tax provisions.  In this video, Chris Wittich, CPA and Partner with Boyum Barenscheer shares insights on the CARES Act tax provisions.

  1. Section 2303 modifies the rules around Net Operating Losses.NOLs created in 2018, 2019, 2020 can be carried back 5 years with no 80% limitations.  So the loss from 2018, 2019, or 2020 could be carried back 5 years and fully offset income in the prior years for both individuals and C Corps.
  2. Section 2305 modifies AMT credit rules for C Corporations.
  3. Section 2306 modifies the Section 163(j) interest expense limitations.They are modified to allow interest expense of 50% of adjusted taxable income instead of 30% for the 2019 and 2020 tax years. The 163(j) limitation returns to a 30% limit in 2021.
  4. Section 2307 fixes the TCJA definition for qualified improvement property so it will have the 15 year life that was originally intended.With a 15 year life on qualified improvement property 100% bonus depreciation would be allowed on the qualified improvement property, retroactive to 2018.  Amended returns could be filed for 2018 and 2019 if already filed.

Contact Chris Wittich, CPA at with questions.


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