29 Apr How Will the Lockdown Affect Truckers and Their Taxes?
In these vulnerable times, most people identify first responders, doctors, and nurses as the frontliners of the coronavirus pandemic. But what about the truckers who also risk their lives to deliver everything from relief goods to the food and supplies that keep shelves stocked?
While the rest of the world is on lockdown, observing social distancing measures, and in self-quarantine, many truckers are still on the road keeping the supply chain running.
On March 13th, 2020, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) issued a national emergency declaration for commercial vehicles delivering emergency COVID-19-related relief goods, such as medical supplies and equipment, food, and supplies for quarantine facilities and temporary housing.
For many truckers, this means more work than ever, with some working over 70 hours a week to ensure critical goods are delivered. But while the lockdown calls for quicker and more efficient shipping of essential items and equipment, it’s also caused a significant reduction in shipment volumes in the other industries, leaving many truckers idle. With the COVID-19 pandemic
forcing non-essential businesses to shutter for the unforeseeable future, the trucking industry also feels the sting as there is a lot less to haul.
Tax credits, Tax Deferrals, and Tax Deductions for Truckers Impacted by COVID-19
From week to week, both salaried and independent truckers are feeling the drop as it becomes harder to find loads. Beyond that, rates have also decreased to the point that making a trip is barely worthwhile. The COVID-19 pandemic is proving that trucking is not a recession-proof industry. To survive, the trucking sector is taking their concerns to the federal government to request relief from taxes and fees, such as the Unified Carrier Registration fee and the Heavy Vehicle Use Tax.
On March 25th, 2020, the U.S. Senate passed the Coronavirus Aid, Relief, and Economic Security Act which will provide economic assistance to small- and mid-sized motor carriers. The Act known as CARES earned the praise of the American Trucking Association, as most motor carriers in the country are small to mid-sized businesses.
The bill aims to help employers with payroll and other expenses. CARES also allows employers to defer payment of social security tax for up to two years. For employers whose operations have been suspended or significantly reduced due to the lockdown, the Act provides a refundable employee tax retention credit, with the maximum credit set at $5,000 per employee.
On April 28th, 2020, the American Truck Dealers (ATD) released a letter supported by a total of 116 organizations, including state trucking associations and national companies, pushing Congress to suspend the 12% federal excise tax (FET) on new heavy-duty trucks and trailers through 2021. The suspension of the FET would make new heavy-duty trucks and trailers, which are safer and cleaner, more affordable. So while many are looking for a bailout during these challenging times, it seems that many members of the trucking industry are preparing for recovery by modernizing their fleet with engines that use advanced technologies and cleaner fuel.
If you’re looking to learn more about how taxes work for truck drivers, feel free to check the Golden Tax Relief blog. If you require assistance from a professional tax resolution specialist, contact us through our site or by calling 844-229-8936.