Returning Value Blog

Are you wondering whether alternative energy technologies can help you manage energy costs in your business? If so, there’s a valuable federal income tax benefit (the business energy credit) that applies to the acquisition of many types of alternative energy property.

The tax policy changes proposed by the Biden administration would roll back many of the tax benefits provided by the Tax Cuts and Jobs Act (TCJA) enacted at the end of 2017. The most significant proposals include increasing the federal corporate income tax rate to 28% from 21%, raising the top personal income tax rate from 37% back to the pre-TCJA rate of 39.6%, reducing the estate tax exemption threshold, thus bringing more estates within the scope of the federal estate tax, and almost doubling the capital gains tax rates on individuals earning $1 million annually, from 20% to 39.6%. The Biden administration is also considering a phase-out of the Qualified Business Income (QBI) deduction applicable to both pass-through entities and real estate investment trusts for those deriving income that exceeds a certain threshold ($400,000)—the QBI deduction currently allows eligible taxpayers to deduct up to 20% of pass-through income.

On March 31, 2021, the Biden administration unveiled a job and infrastructure plan, the American Jobs Plan, to address the nation's pressing infrastructure needs. The plan calls for about $2 trillion in spending over eight years. To pay for these expenditures, the plan also includes a proposed overhaul of the corporate tax system that would increase the corporate tax rate and the global minimum tax, eliminate federal tax benefits for fossil fuel companies, and strengthen enforcement against corporations.

IRS Notice 2020-65 allowed employers to defer withholding and payment of the employee's Social Security taxes. This deferral applied to those with less than $4,000 in wages every two weeks or an equivalent amount for other pay periods. It was optional for most employers, although mandatory for federal employees and military service members. 

The American Rescue Plan Act of 2021 (ARPA), signed into law by President Biden on March 11, 2021, provides additional major relief to individuals and businesses that continue to be impacted by the COVID-19 pandemic. The ARPA includes the following provisions related to individual taxpayers:​

President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) on March 11. While the new law is best known for the provisions providing relief to individuals, there are also several tax breaks and financial benefits for businesses.

Are you a business owner thinking about hiring? Be aware that a recent law extended a credit for hiring individuals from one or more targeted groups. Employers can qualify for a tax credit known as the Work Opportunity Tax Credit (WOTC) that’s worth as much as $2,400 for each eligible employee ($4,800, $5,600, and $9,600 for certain veterans and $9,000 for “long-term family assistance recipients”). The credit is generally limited to eligible employees who began work for the employer before January 1, 2026.

On February 12, 2021, Alabama enacted HB 170 / Act # 2021-1. The new law makes several important changes to Alabama income taxes, including the following: formalizing the state’s treatment of Paycheck Protection Program (PPP) loans and related expenses in line with the governor’s prior proclamation, adopting a single-sales factor apportionment formula, addressing federal tax reform provisions that had caused issues for Alabama taxpayers and adopting an elective pass-through entity (PTE) tax regime similar to other states. The income tax reform is a mixed bag that will impact a wide range of Alabama taxpayers.

A number of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2021. Some stayed the same due to low inflation. And the deduction for business meals has doubled for this year after a new law was enacted at the end of 2020. Here’s a rundown of those that may be important to you and your business.

The Small Business Administration (SBA) announced that the Paycheck Protection Program (PPP) reopened the week of January 11. If you’re fortunate to get a PPP loan to help during the COVID-19 crisis (or you received one last year), you may wonder about the tax consequences.