In addition , the Coronavirus Aid , Relief , and Economic Security ( CARES ) Act allows companies to carry back net operating losses from 2018 , 2019 and 2020 for five years . That enables them to effectively amend past tax returns and receive rebates for those losses , if it ’ s advantageous from a tax perspective for them to do so .
Because the corporate tax rate was at 35 % prior to the passage of former President Donald Trump ’ s Tax Cuts and Jobs Act at the end of 2017 , carrying current losses back now to previous years can help firms get back more of the taxes they may have paid under the higher rate , according to Gardner .
Tutor Perini ’ s 10-K offers a good example . “ Under the CARES Act , enacted on March 27 , 2020 , the NOL [ net operating loss ] generated in 2019 may be carried back up to five years , whereas under previous rules , NOLs were only allowed to be carried forward ,” the firm said in its 10-K filing . “ This allowed the company to realize the benefit of the tax rate differential by carrying back the NOL to tax years when the federal statutory tax rate was 35 % rather than the current rate of 21 %.” claimed $ 1.1 million .
All of the above methods are fully allowed within the tax system , tax experts interviewed for this series emphasized . “ There ’ s no indication that what these companies are doing is anything other than completely above board ,” Gardner said .
The tax code is set up for firms to seek out these kinds of deductions , to incentivize them to invest back in their businesses and employees and thus grow the economy at large .
“ You hear all the time about all these very large companies that pay zero tax , even though they make money ,” said Kahn . “ But obviously , in an effort to generate investment and progress , there are tax laws in place that allow you to more rapidly deduct things for tax purposes .”
5 . 179D Energy Efficiency Deduction
Another deduction particularly applicable to construction companies is the 179D incentive , which allows eligible builders to claim a tax deduction of up to $ 1.80 per foot for installing qualifying energy-efficient systems in buildings . First established in 2006 , it was recently made a permanent program as part of the Consolidated Appropriations Act of 2021 signed into law on December 27 , 2020 .
Jacobs took a $ 7.3 million deduction under the rule , while Comfort Systems USA
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