On The Hill

Tax Update (April 6)

Apr 6, 2020 | SHARE

As the coronavirus continues to spread across the country, lawmakers begin work on a ‘Phase 4’ stimulus package. Both President Trump and House Speaker Nancy Pelosi (D-CA) have indicated they intend to include an infrastructure package in the stimulus. Majority Leader Mitch McConnell (R-KY), however, has warned that a large-scale infrastructure package could be stalled in the Senate.

For an overview of tax provisions in the CARES Act and a look forward, listen to “The CARES Act: What’s New and What’s Next” from Tax Notes Talk.

Coronavirus resources can be found on our website.

Extenders May be Included in ‘Phase 4’ Stimulus

Some lawmakers are looking towards Phase 4 as a vehicle to extend dozens of tax provisions set to expire in 2020. Tax credits being considered include: craft alcoholic beverages, electric vehicles, coal production, and carbon sequestration.

Lawmakers, however, have differing opinions on the necessity of including extenders. Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-AK) noted that while she anticipates extenders to move at some point, they could wait until the traditional December tax package. Others, like House Ways and Means member Rep. Dwight Evans (D-PA), have adopted a “wait and see” attitude.

“As far as I’m concerned, everything is on the table. We’ll have to be in a position to be mobile, to be flexible,” Evans said.^[1]

SBA/Treasury Release Guidance on PPP

This week, SBA and Treasury released final guidance for both lenders and borrowers on the Paycheck Protection Program (PPP), a program established under the CARES Act that authorizes $349 billion to provide guaranteed loans for small businesses to cover payroll and other qualified expenses (i.e. mortgage payments, rent, utilities).

In order to qualify for a loan, businesses must have fewer than 500 employees. Businesses in certain industries with over 500 employees may qualify, provided they meet SBA size standards for their respective industry. Independent contractors and 1099 employees are not intended to be included in employee count.