Large retailers like
The stimulus package would provide swift tax relief for companies struggling to pay employees and operating costs. It also includes a tax break that could benefit distillers like Tito’s Handmade Vodka that are now making
Lawmakers also took the opportunity to fix an
The bill, which is scheduled for a Friday vote in the House , would provide tax credits, deductions and deferred payments for a wide swath of taxpayers, ranging from large multinational corporations to some low-income earners. The tax benefits are estimated to total more than $500 billion over a decade with more than half of that money going to individuals, according to a Senate Finance Committee Republican aide.
The Joint Committee on Taxation, a nonpartisan tax scorekeeper, has not yet released an estimate of the cost of all these tax breaks.
The bill provides a tax credit for companies that retain employees if they’ve been required to close during the epidemic or seen a significant drop-off in business as people self-isolate to avoid spreading the virus. Companies could delay paying employer-side payroll taxes they owe for up to three years. Businesses could defer half of the payments to 2021 and the remainder to 2022.
Restaurants and retailers, two sectors that have already seen sales plummet as governments limit business operations and consumers stay home, would specifically benefit from a more generous deduction for renovating their stores. Retailers and restaurants -- including Target,
An error in the 2017 tax law had required them to spread those costs over many years and Republicans since then have been trying to get Democrats to sign off on making that correction.
“We were supportive of that when it got added,” said
Distillers -- including
Hospitals, public buildings and retailers have faced large shortages of hand sanitizer as public health officials urge people to wash their hands or use a disinfecting gel more frequently. The widespread need for hand sanitizer has spurred many brewers and distillers, from local operations to Budweiser beer producer
The bill would also allow companies to use some losses to offset income they earned in previous years, giving them access to tax refunds to alleviate cash-flow problems. Companies that are due alternative minimum tax credits can get those more quickly. The legislation also allows companies to temporarily deduct more interest on the loans they owe.
There are some new tax breaks for individuals as well. People who have been diagnosed with the virus, have a family member who has fallen ill or has faced hardship because of the related economic slowdown can take up to $100,000 from their retirement account without paying penalties.
The legislation would also permit retirees with individual retirement accounts to temporarily not take mandatory distributions, so they wouldn’t have to pay income tax on that money. As an added benefit, those savers wouldn’t be required to withdraw that money when the stock market
Tax breaks for donating to charity in 2020 would also be more generous. Taxpayers who don’t itemize and aren’t typically eligible to write-off charitable gifts, can deduct up to $300 in donations of their 2020 taxes. The bill would also encourage big individual donors and corporations to give more by lifting some limits on how big of a tax break they can take for those contributions.
(Updates with Senate approval starting in the first paragraph)
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