The “Phase Three” COVID-19 economic stabilization package, H.R. 748, the ‘Coronavirus Aid, Relief, and Economic Security Act’ (the CARES Act) that President Donald Trump signed into law on March 27 features significant tax provisions relevant to the Asset and Wealth Management (AWM) industry. Separate from the CARES Act, the IRS on March 20 issued Notice 2020-18 extending to July 15, 2020, without penalties and interest, the April 15, 2020 due date for filing certain federal income tax returns and making federal income tax payments, and on March 24 the IRS posted to its website frequently asked questions (FAQs) related to Notice 2020-18.
The CARES Act includes a wide range of provisions that will impact the AWM industry. Numerous short-term and near-term cash incentives exist presenting opportunities for managers to optimize cash. Significant tax opportunities will arise relating to COVID-19 and other operational tax planning for the 2020 tax year. Loss planning strategies and minimizing taxable income will take on added significance. Asset managers should review and assess the potential application to their investors, general partners and investments. The President’s signature on March 27, 2020 was merely the first step in the government’s implementation of the significant new legislation. There remains a myriad of questions in all areas of the law surrounding intent, interpretation, and applicability. Managers will need to continue to assess how tax reform impacts their business and monitor guidance released in IRS notices and Treasury Regulations.
For a detailed discussion of the broader set of CARES Act provisions, access PwC’s Insight Senate passes ‘Phase Three’ COVID-19 economic stabilization legislation. For a discussion of the legislative and administrative activity, including the previously enacted ‘Phase One’ and ‘Phase Two’ packages, access PwC’s Insights Tax return filings delayed until July 15; Negotiations underway on COVID-19 ‘Phase Three’ economic stabilization legislation, Tax advantaged assistance to COVID-19 impacted employees, and President declares National Emergency; House passes COVID-19 relief bill; talks continue on additional tax measures. For more details regarding Notice 2020-18 and the associated FAQs, please access PwC’s prior Insight IRS issues FAQs on filing and payment relief. For a detailed summary of the state and local tax jurisdictions providing filing and payment extensions, access PwC’s Select state and local tax relief relating to Coronavirus.
Asset Management Tax Leader, PwC US