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COVID-19 (coronavirus) Pandemic Tax Policies

As the U.S. federal, state, and local governments, as well as countries around the world, continue to implement measures to support their economies amid the coronavirus (COVID-19) pandemic, our experts are providing trusted analysis of the latest coronavirus tax developments to better inform policymakers, journalists, and taxpayers.

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A Neutral Tax Code Counts Unemployment Compensation as Taxable Income

Since 1987, unemployment compensation benefits have been subject to federal income tax and, in most states, to state income tax. According to the Congressional Research Service, such treatment—including unemployment compensation benefits in taxable income—is common across industrial nations.

4 min read
EU business tax reform, European Union business tax reform, European Commission EU business taxation framework

The EU Determined to Reform the Business Tax

The EU recently launched a consultation to reform the business tax system, which will outline the priorities for corporate taxation over the coming years to meet the needs of a globalized economy that struggles to recover from the consequences of the COVID-19 crisis. It will also set EU actions regarding the ongoing international discussion on the taxation of the digital economy and a global minimum tax.

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2021 tax season, tax refunds, IRS extends tax filing deadline to May 17

What to Expect During the 2021 Tax Season

The IRS recently announced the extension of tax filing and payment deadlines from April 15th to May 17th to help taxpayers navigating the many tax changes amid the pandemic and give the IRS opportunity to clear its backlog of tax returns and correspondence.

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Inflation Reduction Act stock buyback tax Making the expanded child tax credit permanent American Rescue Plan Act. House Democrats covid plan. House Ways and Means coronavirus relief legislation. House Ways and Means committee coronavirus relief legislation. Ways and Means Chairman Richard E. Neal coronavirus relief package. New coronavirus relief bill summary, Stimulus check round 2, unemployment benefits

Making the Expanded Child Tax Credit Permanent Would Cost Nearly $1.6 Trillion

As the Biden administration and Congress consider making the expanded child tax credit permanent, a nearly $1.6 trillion expansion of tax code-administered benefits, they should consider financing it in a way that doesn’t create significant headwinds to economic recovery.

3 min read
State business inventory tax. Does your state tax business inventory? Are businesses tax on inventory? Explore state business tangible personal property tax as of July 1, 2020,taxes on business inventory, inventory taxes

Does Your State Tax Business Inventory?

Inventory taxes are levied regardless of whether a business makes a profit, adding to the burden of businesses already struggling to stay afloat.

2 min read
Total Covid relief (Total Covid-19 relief) in the US. Total unemployment insurance and total unemployment benefits, including total covid relief families. How much money has the US spent on covid-19 Comparing covid relief packages

U.S. COVID-19 Relief Provided More Than $60,000 in Benefits to Many Unemployed Families

During the pandemic, an unemployment family of four previously earning $60,000 will have received $50,840 in federal and state unemployment benefits from April 1, 2020 to September 6, 2021, plus $11,400 in stimulus payments, plus $7,200 in Child Tax Credit, totaling $69,440 in combined COVID-19 relief benefits.

4 min read
American Rescue Plan state tax cuts, American Rescue Plan tax cuts State Unemployment Compensation Trust Funds, Elizabeth Warren wealth tax, Some tax hikes are more damaging than others, according to Congressional Budget Office (CBO) and new Tax Foundation economic modeling.

Does the American Rescue Plan Ban State Tax Cuts?

Senate amendments to the American Rescue Plan Act prohibit using any of the $350 billion in State and Local Fiscal Recovery Funds to cut taxes, but many are concerned that states which accept the funds could be prohibited from implementing tax cuts between now and 2024—an astonishing level of federal interference in states’ fiscal affairs.

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Gross Receipts Taxes 2021 State Gross Receipts Tax Rates Which States Have a Gross Receipts Tax What States Charge Gross Receipts Tax Texas Gross Receipts Tax

Does Your State Have a Gross Receipts Tax?

Moving away from state gross receipts taxes would represent a pro-growth change to make the tax code friendlier to businesses and consumers alike, which is especially necessary in the wake of the coronavirus pandemic.

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American Families Plan tax proposals American Family Plan Details and Analysis Biden American Families Plan Senate American Rescue Plan direct payments stimulus checks federal covid relief American Rescue Plan tax american rescue plan stimulus payments

Senate Direct Payment Design Would Create High Implicit Marginal Tax Rates

As the Senate debates the relief package and makes progress in the budget reconciliation process, policymakers should keep in mind the trade-off between targeted economic relief and increasing marginal tax rates in the tax code, which can distort incentives to earn income and induce taxpayers to creatively adjust their AGI to receive a payment in the next tax season.

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Tax Incentives for Digital Nomads and Remote Workers

Policy changes to attract foreigners are not without benefits, but governments should carefully weigh the costs of the tax incentives against opportunities to implement broader tax reforms. A more efficient income tax system is a better objective than just focusing on incentives for foreigners to change their tax residence.

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UK 2021 budget Rishi sunak 2021 UK budget 2021

An Investment Boost in the UK’s 2021 Budget

The UK’s Chancellor of the Exchequer Rishi Sunak released the 2021 budget, and most important for near-term growth is the significant boost to capital allowances.

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Evaluating Proposals to Increase the Corporate Tax Rate and Levy a Minimum Tax on Corporate Book Income

President Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations, to raise revenue for new spending programs. Our new modeling analyzes the economic, revenue, and distributional impact of these proposals.

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Which States Are Taxing Forgiven PPP Loans?

Congress chose to exempt forgiven Paycheck Protection Program (PPP) loans from federal income taxation. Many states, however, remain on track to tax them by either treating forgiven loans as taxable income, denying the deduction for expenses paid for using forgiven loans, or both.

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