Republican Bill Proposes Tax Credits for Businesses
Providing Safety Measures to Protect Against Coronavirus

COVID-19 Business Update

Business Advisory Services Group

Lawmakers will be meeting in Washington, D.C. to consider another round of coronavirus relief legislation, which is expected to be the last package approved before the election. Included in the package is legislation created by both House and Senate Republicans that would give businesses refundable tax credits against payroll taxes to meet some of the expenses associated with reopening during the coronavirus pandemic.

The Healthy Workplaces Tax Credit Act was designed to help businesses safely reopen while ensuring the safety of employees and consumers through a refundable tax credit against payroll taxes for 50 percent of the costs incurred by a business for increased testing, personal protective equipment, disinfecting, extra cleaning and reconfiguring work spaces to adhere to social distancing guidelines.

The proposed Healthy Workplaces Tax Credit would be limited to a maximum of $1,000 per employee for a business’s first 500 employees, $750 per employee for the next 500 employees, and $500 for each employee thereafter in recognition of the disproportionate impacts of COVID-19 on small and medium sized businesses. The bill would encourage and enable businesses to take the recommended steps to prevent the spread of COVID-19 in their workplaces.

Additional legislation was also introduced that was paired with the above bill to provide a Workplace Testing Tax Credit. This component would give businesses a refundable payroll tax credit based on their average number of employees, capping the credit between $250 and $500 per employee depending on the size of the business. It would cover 50 percent of the COVID-19 testing costs for companies working to support and maintain a healthy payroll.

The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.