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CARES Act Tax Benefits Largely Unused by Manufacturers

Posted on May 29, 2020

Manufacturing companies aren’t taking advantage of tax incentives provided by Congress in coronavirus relief legislation, according to the results of a survey recently conducted by the National Association of Manufacturers.

Payroll tax deferral has been used the most, but only by 15 percent of the 604 small, medium-size, and large manufacturers polled from May 4 to May 15.

Other tax benefits afforded by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) — including the employee retention tax credit, changes to rules for net operating losses, and acceleration in the recovery of corporate alternative minimum tax credits — were used by less than 8 percent of respondents.

Members of Congress are considering an expansion of the employee retention credit, but only 7 percent of the manufacturers have used the credit — despite 39 percent stating that they’ve furloughed workers.

The Paycheck Protection Program, which has been modified and expanded by Congress since its original creation in the CARES Act, was popular among the respondents, with 61 percent saying they have taken advantage of the federal loan.

About 20 percent of the manufacturers said they haven’t used any provisions from the CARES Act.

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