Business-owning clients will want to know about the employee retention credit, which is equal to the Social Security portion of payroll taxes on an employee’s first $10,000 in wages between March 13 and Dec. 31, Rosen said. Businesses can also defer the employer’s share of the Social Security tax. “The deferred employment tax would be due over the following two years, half in 2021 and half in 2022,” she said.
A survey of small businesses by Businesses For Responsible Tax Regorm, a coalition of busines owners, found that the economic impact of the pandemic has meant that almost all small businesses have been impacted by Covid-19—and that many have little time left before bankruptcy. To help, the CARES Act authorized $349 billion in Paycheck Protection Program (PPP) loans. But the program swiftly ran through its initial funding, and in a recent letter to Congress, John Rice, CEO of the National Society of Accountants, said that CARES inaccurately defines “small business” as possibly having more than 500 employees. He also said the implementation of the PPP inadvertently punishes small businesses that are not leveraged or in debt to a bank.
High-net-worth individuals may soon be at the center of other tax initiatives. Speiss foresees programs to encourage wealthy individuals to invest with tax advantages in public housing, pharmaceuticals and economic zones.
“At some point, we’ll need to pay for the enormous spending we’re seeing at both the state and federal level,” Colletti said. “With income tax rates on the wealthy at historically low levels, it’s reasonable to expect that the wealthy will be asked to pay more.”