PODCAST: The CARES Act deadlines not to miss

Written on May 14, 2020

By Jessica Salerno, OSCPA senior content manager

Now is the time for accountants to note several deadlines they shouldn’t miss for their clients or their businesses as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act.

“There are three general areas that were fixed or updated with the CARES act,” said Christopher Axene, CPA, principal at Rea & Associates and member of the OSCPA Federal Tax Committee. “That's the qualified improvement property fix, the NOL carrybacks and then for C-corps, an acceleration of the ability to claim AMT credit refunds.”

Axene joined the State of Business podcast this week to discuss those three areas and the deadlines that accountants need to know in the coming months.

“Within that there are some deadlines the IRS put out, most particularly for AMT credit carrybacks for 2018 as well as NOL carrybacks if they were generated in 2018,” Axene said. “The deadline to file so-called accelerated carryback is June 30.”

Accountants don’t want to miss this date, Axene said, because how quickly clients can get money is dependent on which filing method you go with, and that would be the Form 1139 for C-corps and 1045 for individuals. By filing those forms, the IRS must process those within a maximum of 90 days and issue the refund versus filing the amended return 1120-X or 1040-X, which has no statutory time period within which the IRS must process them and then issue a refund.

Another deadline not to miss is July 27, Axene said, which would be for a fiscal year C-Corp that that ended their year in 2018.

He said it straddled a timeframe during which the Tax Reform Act came into law. Under the old set of rules, if there was an NOL generated in that year, they could not use the NOL’s previous rules’ carrybacks, which would have been back two years and forward 20. And that loss then would have been subject to the 80% limitation going forward in terms of ability to offset taxable income.

“And so, they fixed that to where Congress said, ‘That's not really what we intended,’” Axene said. “(They) intended that – for that unique situation – that should have fallen under the old rules. And so, a loss generated in that year should be able to be carried back two years, and then would be carried forward for 20 years.

“So, there's a deadline for filing 1139 to carry back for that unique tax year set of circumstances, and which happened to be based on 120 days after the CARES Act was enacted. And that's what makes it July 27, 2020.”

Listen to the podcast now to hear more from Axene.

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