Business Tax Breaks Thanks to CAA Recently Enacted

The recently enacted Consolidated Appropriations Act offers valuable extensions and expansions of tax breaks for small-business owners. Below is a summary of the most relevant provisions to consider as you plan for the years ahead:

✅ Business Expense Deductions & Credits

• 100% Deduction for Business Meals
  Business meals (dine-in or takeout) provided by restaurants are fully deductible in 2021 and 2022.

• Work Opportunity Tax Credit (WOTC)
  Extended through 2025 for employers hiring individuals from 10 targeted groups.

• New Markets Tax Credit
  Qualifying investments may claim a 39% credit through 2025.

• Empowerment Zone Incentives
  Extended through 2025, though:

  • Enhanced first-year depreciation

  • Capital gains tax deferral
    are both eliminated beginning in 2021.

• Section 127 Student Loan Assistance
  Employers may pay up to $5,250 toward employee student loans (principal + interest) tax-free through 2025.

🏘️ Real Estate, Depreciation & Property Provisions

• 30-Year Depreciation (Elective)
  For residential rental property placed in service before 2018 (previously depreciated over 40 years), businesses may now use a 30-year straight-line schedule if they opted out of TCJA interest limitations.

• Motorsports Complex Depreciation
  Seven-year recovery period extended through 2025.

• Film, TV & Theater Production Write-Offs
  Qualified productions starting before 2025 are eligible for:

  • $15M first-year write-off limit

  • $20M limit in designated disadvantaged zones

• Racehorse Depreciation
  Racehorses two years old or younger placed in service in 2021 qualify for 3-year depreciation.

🌱 Energy Efficiency & Clean Tech Incentives

• Commercial Building Energy Deduction
  The per-square-foot deduction is now permanent:

  • $1.80/sq. ft. for energy-efficient improvements

  • $0.60/sq. ft. for partial qualifications

• Residential Energy-Efficient Home Credit
  Homebuilders may claim:

  • $1,000 or $2,000 per qualifying home through 2021

• EV Refueling Property Credit
  Businesses installing non-hydrogen alternative-fuel stations (e.g., electric vehicle chargers) can claim up to 30% of the installation cost through 2021.

• Hydrogen-Powered Vehicle Credit
  Businesses may claim up to:

  • $4,000 to $40,000 for qualifying hydrogen-fueled vehicles through 2021.

📉 Disaster Relief, Loans & Tax Treatment

• SBA EIDL Advances & Loan Assistance
  These funds are:

  • Non-taxable

  • Do not reduce tax attributes (like NOLs or basis)

• Farmer-Specific NOL Carryback Adjustment
  Farmers may elect a 2-year NOL carryback (instead of 5 years) retroactively, as if it had been in the original CARES Act.

📞 Need Help Navigating These Opportunities?

We can help you determine which tax breaks apply to your business and how to take full advantage of them.

Contact our office at 561-995-0064 to schedule a consultation.