Latest Government Pandemic Relief

SCROLL

Latest Government Pandemic Relief

On 12/31/20, Congress passed another large bill that includes several financial and tax provisions benefiting individuals and businesses.  On Sunday, 12/27/20 the president signed the bill into law.

The bill is quite lengthy—5,593 pages—but we have for now highlighted some of the most pertinent provisions of the bill below.

Second Round of Stimulus Funds

  • A new round of stimulus payments provides up to $600 per person.  Another bill recently passed by the House of Representatives proposes the amount be increased to $2,000.
  • Eligibility is tied to taxpayer income; individuals with higher earnings may not qualify for full or even partial stimulus funds.
  • Payments are expected to begin in the days ahead.
  • We will provide additional information on stimulus payments as more develops.

PPP Funds Taxability

This had been a huge issue but has now been clarified and resolved by the government.  In general—

  • PPP loan forgiveness will be considered non-taxable income.
  • Expenses paid with the PPP funds will still be deductible for tax purposes.
  • Note that some states’ laws may treat the PPP funds differently for taxes, however. Minnesota, for example, hasn’t yet adopted the federal treatment of PPP loan forgiveness.

New Round of PPP Loans

The second round will have some differences from the first round. 

  • Eligible borrowers must be able to show that their gross receipts decreased in any one quarter in 2020 by more than 25% compared to the corresponding quarter in 2019.
  • The list of eligible expenses qualifying for forgiveness is also expanded.
  • Food service industry businesses may qualify for greater PPP funding levels.

Simplified PPP Forgiveness for Loans Up To $150k

PPP loans not exceeding this amount can be forgiven under a simplified,  one-page application.

Government Payments On SBA Loans Not Taxable

The CARES Act provided that the SBA would make the principal and interest payments on certain SBA loans for 6 months. The new bill clarifies those payments are not taxable income.

Extension of Paid Leave Under the FFCRA

The credit for paid leave under the Families First Coronavirus Response Act is extended through March 31, 2021.

100% Deductible Business Meals

Business meals will be 100% deductible in 2021 and 2022. Previously, business meals had been 50% deductible.  Business entertainment expenses will still be nondeductible.

Employee Retention Credit

This has been extended through next June and now allows PPP recipients to claim the credit in certain circumstances.

Tax Extenders

Many tax provisions that would have expired on 12/31/20 have been extended.

Close Menu

Disclaimer

No Rendering of Advice
The information contained within this website is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant.

Presentation of the information via the Internet is not intended to create, and receipt does not constitute, an accountant-client relationship. Internet subscribers, users and online readers are advised not to act upon this information without seeking the service of a professional accountant.

Any U.S. federal tax advice contained in this website is not intended to be used for the purpose of avoiding penalties under U.S. federal tax law.

Accuracy of Information
While we use reasonable efforts to furnish accurate and up-to-date information, we do not warrant that any information contained in or made available through this website is accurate, complete, reliable, current or error-free. We assume no liability or responsibility for any errors or omissions in the content of this website or such If you wish to contact the webmaster of this website, please call CPA Websites Solutions at 802-655-1519.

Disclaimer of Warranties and Limitations of Liability
This website is provided on an “as is” and “as available” basis. Use of this website is at your own risk. We and our suppliers disclaim all warranties. Neither we nor our suppliers shall be liable for any damages of any kind with the use of this website.

Links To Third Party Websites
For your convenience, this website may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

Privacy Policy

Here is our Privacy Policy required by the Gramm-Leach-Bliley Act of 1999.

We collect nonpublic personal information about you from the following sources:

  • Information we receive from you on applications, tax organizers, worksheets and other documents;

  • Information about your transactions with us, our affiliates, or others;

  • Information we receive from a consumer-reporting agency.

We do not disclose any nonpublic personal information about our clients or former clients to anyone, except as permitted by law.

We restrict access to nonpublic personal information about you to those members of our firm who need to know that information to provide services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information.

Online information is stored on secure servers located in CPA Website Solutions SOC 1 certified data centers.

If you have any questions about this policy, please do not hesitate to contact us.