Liquidity and cash management strategies during a pandemic

Businesses can also take advantage of substantial favorable tax provisions included in the new law, such as: * Employee retention credit; * Delay of payment of the employer portion of payroll taxes; * Allowing net operating losses (NOLs) arising in 2018,2019, and 2020 to be carried back five years and suspending the 80% taxable income limitation (which had been enacted by the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97); * Allowing corporations to accelerate alternative minimum tax (AMT) credit refunds into 2018 or 2019; * Suspending 2020 funding obligations for single-employer defined benefit pension plans until Jan. 1,2021 (with interest due); * Increasing the limitation on the deduction of business interest under Sec. 163(j) from 30% to 50% of adjusted taxable income for tax years beginning in 2019 and 2020 and allowing taxpayers to use 2019 taxable income to calculate the 2020 limit; * A technical correction to allow for bonus depreciation for qualified improvement property; and * Suspending the limitation on excess business loss deductions under Sec. 461(1) in 2018,2019, and 2020, so that it takes effect for the first time in 2021. Any application that contains material errors or omissions that cannot be corrected within 45 days may be disallowed, leaving the taxpayer to claim a refund on its income tax return.Taxpayers should also be careful they estimate their overpayment correctly. [...]the CARES Act allows corporations to immediately claim unused AMT credits. [...]while this discussion provides a general overview of the refund mechanisms available to taxpayers, taxpayers should carefully analyze specific issues and ensure they are compliant with their filings, based on the most up-todate IRS guidance in response to the CARES Act.