US Sec 163(j), 954(c)(6)
The Consolidated Appropriations Act, 2021 (CAA) and OIRA have advanced interesting developments for early 2021.
New Section 163(j) interest regulations have not yet been posted on the IRS website, thereby this fact is significant for calendar-year taxpayers as they will not have to diligently read, and strategize, such information for year-end 2020, dependent upon the approach to evaluation of new legislation and timing.
Additionally, the exceptions to related party payments for Section 954(c)(6) have been extended for 5 years in the CAA. This is a new, and welcome, certainty provision for multinationals. Most importantly, this provision may also add in scheduling future taxable income to evaluate positive and negative evidence for affixing a Valuation Allowance on deferred tax assets that will reverse in the future.
The Employee Retention Tax Credit has also been extended, and liberalized, for the first two quarters of 2021.