Recent Federal Tax Laws and Post-COVID Changes

The post-COVID era reshaped tax law more than any comparable period since the 1980s. Most provisions were originally temporary — designed for pandemic relief. Some have expired; some have been made permanent; some have quietly been expanded. The result is a system that looks familiar but behaves differently than it did in 2019. Below is a guided tour of what every taxpayer in North Carolina and Georgia should know, in plain English, with specific implications for individuals and small businesses.

A year-by-year walkthrough of the major laws

The CARES Act (March 2020)

The CARES Act was the federal government's first sweeping pandemic response. For individuals, it authorized the original round of Economic Impact Payments (often called stimulus checks), expanded unemployment insurance with an extra $600 per week and extended benefits for self-employed workers, and created a temporary above-the-line charitable deduction of $300 per person. For businesses, it created the Paycheck Protection Program (PPP) — fully forgivable loans meant to keep payrolls intact — and established the Employee Retention Credit (ERC), an aggressive refundable credit that has since become one of the most heavily-audited provisions in recent history.

Two CARES provisions still matter today. First, it allowed businesses to carry back Net Operating Losses for up to five years, generating refunds for many struggling companies in 2020 and 2021. Second, it temporarily suspended limits on business interest deductions. Those limits have since been restored under TCJA rules, but the carryback opportunity occasionally resurfaces for clients with sudden losses.

The Consolidated Appropriations Act, 2021 (December 2020)

Passed almost simultaneously with the second stimulus package, this law extended many CARES provisions, funded a second round of $600 Economic Impact Payments, and restart of PPP, and — importantly for restaurants and entertainment venues — restored the 100% deduction for business meals that the 2017 TCJA had cut to 50%. That 100% deduction was only for 2021 and 2022, so business meals now revert to a 50% deduction in most cases. Anyone still applying 100% needs to revisit their 2023+ bookkeeping.

The American Rescue Plan Act (ARPA, March 2021)

ARPA's headline measure was a one-year expansion of the Child Tax Credit: up to $3,000 per child age 6–17 and $3,600 per child under 6, with full refundability. For most working families, the IRS paid half the credit in monthly installments from July through December 2021. In 2022 the credit reverted to its prior $2,000-per-child structure, but the income thresholds remained wider than pre-ARPA levels.

ARPA also temporarily expanded the Child & Dependent Care Credit (up to $4,000 for one qualifying person, $8,000 for two or more), broadened the Earned Income Tax Credit for workers without children, and extended enhanced ACA premium tax credits through 2025. The premium-credit extension alone has been the most consequential individual ARPA provision still in force — many marketplace plan holders now pay $0–$50 monthly premium instead of $400+.

The Inflation Reduction Act (August 2022)

The IRA was marketed as a climate bill, but its tax provisions are wide-ranging. For businesses, it created a 15% corporate Alternative Minimum Tax (CAMT) on extremely large corporations and a 1% excise tax on stock buybacks. For individuals, the IRA reshaped energy-related incentives: a 30% Residential Clean Energy Credit for solar, geothermal, wind, battery storage, and certain heat pumps (extended through 2034); new and used Clean Vehicle Credits (now with point-of-sale transfer for qualifying new EVs); and a 30% Energy Efficient Home Improvement Credit with annual dollar caps on specific categories.

The IRA also allocated roughly $80 billion in additional funding to the IRS, primarily for enforcement. Most of that funding is targeted at high earners, large partnerships, and complex returns. Practical implication: clients with side businesses, crypto activity, or rental properties should expect more letters and possible inquiries over the next several years. Clean books and contemporaneous documentation have never been more valuable.

The SECURE 2.0 Act (December 2022)

SECURE 2.0 is the most significant retirement-law update since the original SECURE Act of 2019. Major changes phased in across 2024, 2025, and beyond include: raising the required-minimum-distribution age from 72 to 73, then to 75; eliminating RMDs for Roth 401(k)s starting 2024; allowing employer-matching contributions to go into Roth accounts; creating emergency-savings accounts within 401(k) plans; allowing employer matches against student-loan payments; and indexing many of the IRA-related limits to inflation starting in 2024. Penalties for missed RMDs were also reduced from 50% to 25% (10% if corrected promptly).

What's expiring — and what to do about it

The single most consequential calendared change is the scheduled sunset of many TCJA individual provisions after 2025. Without congressional action, 2026 will see: the top individual rate revert from 37% to 39.6%; the standard deduction reduced by roughly half (a roughly $2,000–$3,000 per-adult drop); the personal exemption ($4,050 per person) return; the child tax credit shrink to $1,000 without refundability; the estate-tax exemption shrink to roughly half its 2025 level; and the 20% pass-through QBI deduction scheduled to end.

State-level changes that matter for NC and GA clients

North Carolina

• Individual income tax rate dropped from 5.25% in 2022 to 4.5% currently, on a multi-year schedule toward 3.99% by 2030.
• Standard deduction converged with the federal amount in recent years — fewer 'double calculations' than most states.
• Franchise tax on corporations and LLCs with NC nexus continues; calculation depends on net worth and is partially exempted for many small businesses.
• NC 529 Plan contributions are deductible on the state return (income limits apply).

Georgia

• Flat 5.39% individual income tax rate (reduced from 6% in recent years).
• Large retirement-income exclusion for filers 62+: up to $65,000 of qualifying retirement income per person, with phase-outs above certain income thresholds.
• Standard deduction typically more generous than federal — many filers claim the state standard even when itemizing federally.
• Sales tax economic-nexus and franchise / net-worth tax structures for businesses changed materially in 2023–2024 — current status should be confirmed each year.

Quick reference: when each major law matters most

Action checklist for the next 90 days

1. Pull a three-year federal and state return summary. Identify whether any prior-year positions (particularly ERC, R&D capitalization, or vehicle credits) deserve a defensive review.
2. Project your 2025 income and run both 'TCJA extended' and 'TCJA sunset' scenarios. The dispersion will be the planning opportunity.
3. Confirm any Roth-eligible contributions before the income limits are tested against MAGI, especially if you expect a bonus year.
4. For business owners: confirm S-corp reasonable compensation is documented against at least one market study for 2024+.
5. For high-income or high-net-worth: schedule a Roth-conversion or charitable bunching conversation before December 31. Both move more dollars under current rules than under post-2025 rules.
6. If you've recently claimed energy credits: validate that vendor and product documentation was retained, since the IRA-era credits have detailed substantiation rules.