The Rescue Plan

Big companies could see tax breaks

The stimulus includes several tax breaks that will largely benefit businesses — although it would not necessarily get cash to the companies most in need today. For instance, the bill would temporarily make it easier for big companies to take interest deductions and would roll back losses into older tax years, potentially leading to refunds.

HOW IT COULD PLAY OUT Companies that suffer enormous losses this year would be able to deduct those against profits from the past five years, potentially wiping out their old tax liabilities and generating cash refunds. If they had losses in 2018 and 2019 to offset taxes from profits in even older years, they could get quick cash refunds. But they would not see the cash from any refunds related to this year until at least early 2021.

“It is not targeted at the companies who are most in need today, so it is not an ideal way to allocate relief resources,” said Stephen Shay, a tax law professor at Harvard and former U.S. Treasury official. “It is clearly not the best way, but it’s reasonably fast compared to some alternatives.”

Stocks rose as Congress moved toward passing the aid package.

Stocks on Wall Street rose on Wednesday as investors sized up a $2 trillion coronavirus rescue package intended to shore up the American economy, but the gains faded late in the day as debate over the bill continued without a vote in the Senate.

The legislation would be the biggest fiscal stimulus package in modern American history, and more than double the size of the roughly $800 billion stimulus package that Congress passed in 2009, during the last recession.

The S&P 500 climbed more than 1 percent, adding to a 9.4 percent gain on Tuesday that had come as investors anticipated that Democrats and Republicans would reach a deal over the plans.

Some of the companies expected to benefit from government help led Wednesday’s gains. Boeing was up more than 20 percent, helping lift the Dow Jones industrial average. American Airlines and Carnival Corporation both jumped more than 10 percent.