New Announcement on Corporate Tax Benefits

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We would like to make sure you were aware of some of the provisions of the Consolidated Appropriations Act signed into law on December 27, 2020 which you could benefit from. Namely, the following items may affect you:

If your company elected to defer payroll taxes under the Presidential Memorandum issued on August 8, 2020, the repayment date for such taxes has been extended from April 30, 2021 to December 31, 2021.
If you received an initial round of PPP loan funds and used all such proceeds, you could be eligible to receive a second round of funds assuming you have fewer than 300 employees and can show a 25% gross revenue decline in any quarter in 2020 as compared to the same quarter in 2019. In addition, qualifying applicants who did not apply for the first round of funds could apply for funds now as well – the headcount threshold for such applicants is 500 rather than 300 and there is no need to demonstrate a reduction in gross receipts. In both scenarios, affiliation rules apply, meaning you would need to include all worldwide affiliate employees in the headcount. You also would be required to make a certification of economic necessity in either case.
The employee retention credit has been significantly expanded and extended through the first two quarters of 2021. Previously limited to business with fewer than 100 employees, the credit is now available to businesses with up to 500 employees (on an aggregate, worldwide basis). The qualified wage base was increased from $10,000 annually to $10,000 per quarter, the credit rate was also increased from 50% to 70%, and there is now only a 20% reduction in year-over-year gross receipts required rather than the previous 50% required to qualify. Lastly, the credit is also now available to companies that received a PPP loan.

We would be happy to discuss these opportunities and your eligibility for them in greater detail.

Please contact your Rödl & Partner representative for additional information and assistance.

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