COVID-19 Tax Relief for Landlords: A Comprehensive Guide

As a landlord, you're likely feeling the financial strain of the COVID-19 pandemic. With many tenants struggling to pay rent, you may be wondering how you can reduce your tax liability and stay afloat. In this guide, we'll cover the key tax relief options available to landlords during the COVID-19 crisis.

1. Delayed Payment of Taxes

One of the most significant tax relief options available to landlords is the ability to delay payment of taxes. The IRS has extended the deadline for paying taxes from April 15 to July 15, 2020. This means you can delay payment of your 2019 taxes until July 15, 2020, without incurring any penalties or interest.

2. Net Operating Loss (NOL) Carrybacks

If you're a landlord with a net operating loss (NOL) in 2020, you may be able to carry back the loss to previous years and receive a refund of taxes paid. The CARES Act allows landlords to carry back NOLs to the previous five years, which could result in a significant refund.

3. Depreciation and Amortization

As a landlord, you're likely to have significant depreciation and amortization expenses. The IRS has temporarily increased the depreciation and amortization limits for 2020, which could result in a larger tax deduction. Additionally, the CARES Act allows landlords to accelerate depreciation and amortization expenses in 2020, which could result in a larger tax deduction.

4. Business Use of Home

If you use your home as a rental property, you may be able to deduct a portion of your mortgage interest and property taxes as a business expense. The IRS has temporarily increased the business use of home deduction limit for 2020, which could result in a larger tax deduction.

5. Employee Retention Credit

If you have employees, you may be eligible for the employee retention credit. This credit is equal to 50% of the first $10,000 in wages paid to each employee, up to a maximum credit of $5,000 per employee. The credit is available for wages paid between March 13, 2020, and December 31, 2020.

6. Paycheck Protection Program (PPP) Loan Forgiveness

If you received a Paycheck Protection Program (PPP) loan, you may be eligible for loan forgiveness. The PPP loan forgiveness program allows landlords to have up to 100% of their loan forgiven if they use the loan proceeds to pay for certain expenses, such as payroll, rent, and utilities.

7. Other Tax Relief Options

In addition to the tax relief options listed above, there may be other options available to landlords. For example, the IRS has temporarily increased the limit on the deduction for charitable contributions to 100% of adjusted gross income for 2020. Additionally, the CARES Act allows landlords to deduct up to $100,000 in business losses in 2020, which could result in a larger tax deduction.

As a landlord, it's essential to stay informed about the latest tax relief options available to you. By taking advantage of these options, you can reduce your tax liability and stay afloat during the COVID-19 crisis.