Businesses Look to Congress to Extend 33 Tax Savings Provisions

Tax Extensions Critical to Helping Businesses During Financially Challenging Times

With 2020 being one of the most turbulent years on record, businesses are looking to congress for any help they can provide. The CARES Act of 2020 which included the Paycheck Protection Program was a lifesaver for many businesses, but there are still many challenges ahead. With deadlines approaching for extending much-needed tax provisions, congressional action is needed. Senators recently signaled that these tax extenders would be included as part of additional COVID relief packages.

Two of the provisions included in the expiring tax extender list are 179D and 45L. Both key business incentives deliver direct and lucrative results to our customers, and we are closely monitoring the situation so we can best guide our clients 2021 strategies. 

The following are just a few of the tax provisions set to expire Dec. 31, 2020, if not extended by Congress:

Business credits

  • Sec. 45A Indian employment credit.
  • Sec. 45D new markets tax credit.
  • Sec. 45N mine rescue team training credit.
  • Sec. 45S employer credit for paid family and medical leave.
  • Sec. 51 work opportunity credit.

Depreciation and expensing

  • Sec. 168(e)(3)(A) three-year recovery period for racehorses two years old or younger.
  • Sec. 168(e)(3)(C)(ii) seven-year recovery period for motorsports entertainment complexes.
  • Sec. 168(j)(9) accelerated depreciation for business property on Indian reservations.
  • Sec. 181 special expensing rules for certain film, television, and live theatrical productions.

Energy provisions

  • Sec. 25C 10% credit for qualified nonbusiness energy property.
  • Sec. 30B credit for qualified fuel cell motor vehicles.
  • Sec. 30C 30% credit for the cost of alternative (non-hydrogen) fuel vehicle refueling property.
  • Sec. 30D 10% credit for plug-in electric motorcycles and two-wheeled vehicles.
  • Sec. 40(b)(6) credit for each gallon of qualified second-generation biofuel produced.
  • Sec. 45(d) and Sec. 48 beginning-of-construction date for renewable power facilities eligible to claim the electricity production credit or investment credit in lieu of the production credit.
  • Sec. 45(e)(10)(A)(i) production credit for Indian coal facilities.
  • Sec. 45L credit for each qualified new energy-efficient home constructed by an eligible contractor and acquired by a person from the eligible contractor for use as a residence during the tax year.
  • Sec. 168(l) depreciation allowance equal to 50% of the adjusted basis of qualified second-generation biofuel plant property.
  • Sec. 179D deduction for energy-efficient commercial buildings.
  • Sec. 451(k) special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy for qualified electric utilities.
  • Sec. 6426(c) excise tax credits for alternative fuels and Sec. 6427(e) outlay payments for alternative fuels.

As political debate continues on COVID relief and tax extenders, business owners and tax professionals are hopeful that these extensions can be bundled with the legislation.

If you have any questions on this or any of the other commercial tax services we provide, please reach out to our tax professionals at (561) 257-3436.

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