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Tax and Depreciation Benefits for businesses per the CARES ACT

Below are some provision of the CARES Act that provides tax and depreciation benefits for businesses:

Depreciation of Qualified Improvement Property.

Pursuant to the CARE Act Section 2307 “qualified improvement property” is eligible for 100% depreciation. This change to the previous code is retroactive and applies not only for 2020 but also to 2019 and 2018 tax years. However, an amendment to rax returns must be done to take advantage of the depreciation.

Five-Year Carryback for Net Operating Losses (NOLs).

Prior to the CARES Act Section 2303 net operating losses (NOLs) were capped at eighty percent (80%) of a business’ taxable income and could not be carried to previous years. The CARES Act also allows taxpayers to use their NOLs to offset hundred percent (100%) of taxable income in tax years 2018, 2019, and 2020. Additionally CARES Act allows the NOLs incurred in 2018, 2019 and 2020 to be carried back five taxable years.

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