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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The major tax-related benefits in the $1.9 trillion economic relief plan are a third round of direct payments, extended unemployment insurance (UI) benefits and a $10,200 unemployment insurance income exemption for 2020, and an expansion of the Child Tax Credit.
6 min read
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.
7 min read
The American Rescue Plan Act’s restriction on states’ Fiscal Recovery Funds being used to directly or indirectly offset a net tax cut is vague and raises difficult questions of interpretation and application. A broad interpretation of this prohibition may be unconstitutional.
19 min read
The government of Hartford County, Connecticut is in line to receive $173 million in local aid under the American Rescue Plan Act (ARPA). There’s only one problem: the government of Hartford County doesn’t exist, nor do any of Connecticut’s other counties have county-level government despite being allocated a collective $691 million under the bill.
4 min read
State and local tax policy have always mattered, but the rise of remote work is bringing tax burdens and economic competitiveness to the forefront. It is a development that states cannot afford to ignore.
5 min read
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
Policymakers must weigh the trade-offs of subsidizing unemployment with mitigating community spread of coronavirus.
6 min read
Even during the coronavirus outbreak, efforts to change the way digital business models are taxed continue. India announced this week that its tax aimed at foreign digital companies, the “equalization levy,” will be expanded.
4 min read
Denmark, a high-tax country with 5.5 million citizens, has implemented policies designed to avoid layoffs and bankruptcies and basically unplug the economy during the pandemic.
4 min read
Due to certain VAT exemption thresholds, many small businesses will not be able to benefit from the VAT changes being introduced throughout Europe to provide relief during the COVID-19 crisis.
2 min read
One idea under consideration is adjusting existing tax credits, such as the Child Tax Credit (CTC) or Earned Income Tax Credit (EITC), to provide financial relief during the crisis.
5 min read
To be eligible for federal funding, state expenditures must meet certain conditions. We break down the state aid coronavirus provisions in the latest federal bill.
5 min read
During the present crisis, remote work has become a necessity for many people. The tax implications, however, are very real and potentially quite complex.
7 min read
States will have to consider the effects of the COVID-19 pandemic on their excise tax revenues, including from gas taxes, tobacco taxes, and alcohol taxes.
7 min read
Countries around the world are implementing emergency tax measures to support their economies under the coronavirus (COVID-19) threat.
51 min read
In contrast to the sweeping economic relief plan being considered by the U.S. Congress, the approach taken by the Australian government is much more targeted to supporting individuals and small to medium-sized businesses.
2 min read
Norway passed a large coronavirus tax relief package to address layoffs and bankruptcies, which includes a reduced VAT rate, the introduction of a loss carryback provision, and targeted postponements for wealth tax payments, among other provisions.
5 min read
The proposed Take Responsibility for Workers and Families Act can be contrasted with the Senate Republican CARES Act, although they share some similarities by providing individual taxpayers with a rebate and modifying business tax provisions to provide liquidity for struggling firms.
5 min read
As lawmakers debate how to respond to the coronavirus crisis, they should focus the legislative response to the emergency at hand, using principled policy solutions to provide relief to those affected. Attempts to use the crisis to make other, unrelated policy changes should be avoided.
3 min read
The timing from enactment to distribution has varied from about one and a half months to more than two months, indicating that it has historically taken a significant amount of time for individual taxpayers to receive their rebates after the policies have been put in place.
4 min read
Unemployment claims are going to tax state unemployment compensation trust funds beyond their limits. We need to start thinking about what to do about it.
5 min read
The federal government moved tax day from April 15 to July 15 in response to the coronavirus pandemic, granting more time for both filing and payment. But for many taxpayers, it might not matter much if states don’t follow suit.
3 min read
The U.S. Treasury Department has pushed the April 15 tax payment deadline to July 15. However, taxpayers still have to file their tax returns by the usual April 15 deadline.
3 min read
During the coronavirus outbreak, Italy has been hit especially hard. Policymakers have introduced numerous measures to stem the spread of the virus and provide relief to businesses that are facing a severe downturn.
2 min readTax policy can help by giving businesses current access to future tax “assets”—deductions and credits the businesses will be allowed or owed over time any way under current law—instead of making them wait.
5 min read
The Great Recession provides some insight into how tax revenues declined during a deep recession. Across OECD countries, revenues fell by 11 percent from 2008 to 2009 with corporate income taxes seeing the steepest decline at 28 percent. Revenues from individual income taxes fell by 16 percent.
4 min read