The Consolidated Appropriations Act of 2018 (P.L. 115-141) previously expanded its qualifications for businesses that took out a loan under the Paycheck Protection Program (PPP loan). This included borrowers from that initial round who were ineligible originally to claim this tax credit.
A business owner who claimed an amount larger than $10,000 and did not have an eligible business in the last year is now eligible for the full PPP loan amount of $10 million. Any portion of the loan which exceeds $10,000 and $150,000 combined for a given company that was apply for Employee Retention Credit issued between March 23 and April 30 is now subject to the 50 percent tax rate.
Under the IRS Code, the amount of tax refund or tax credit owed to a taxpayer is based upon taxable income. This is typically the amount of money the business earns. Taxpayers usually pay income tax using either the flat rate or the progressive rate system. Depending on the amount of their income, taxpayers can use the Flat Rate or Progressive Tax Structure to calculate their taxes.
The business can also make use of various business deductions. These include items such as rent, payroll, equipment and insurance costs. These deductions are subtracted from the total amount of taxable income. The tax that is left over is referred to as taxable income.