Last night President Trump signed the Consolidated Appropriations Act, 2021, the act includes $900 billion in Covid-19 Stimulus. While we are in the processing of studying the new law so that we can present a Webinar that lays out what it means and what to expect we wanted to a little preview of what the law contains.
- Expect to see an additional $600.00 per person in Economic Stimulus Payments for qualifying taxpayers including dependents under 17 years of age.
- Unemployment benefits paid by the federal government have been extended through March 14, 2021, at a rate of $300.00 per week.
- Charitable Contributions of $1,200.00 on Married Filing Jointly returns and $600.00 for all others may be deducted as an adjustment to income even if they don’t itemize for 2020 and 2021.
- Earned Income Credit & Child Tax Credits may be calculated using 2019 Earned income if it provides a larger credit than 2020 income.
- Qualifying businesses may not tax the Employee Retention Credit even if they received forgiveness on a PPP loan.
- Employee Retention Credit has increased from 50% to 70% and the revenue decrease required is lowered from 50% to 20%.
- Families First Coronavirus Response Act, credit extended to the first quarter of 2021.
- Business meals will be 100% deductible for 2021 and 2022 as long as the meal is provided by a restaurant.
- Expenses paid with funds from forgiven PPP loans will be tax-deductible and PPP loans forgiven will add to the tax basis of the owner.
- A Second round of PPP loans PPP2 will be available to business with less than 300 employees that has a 25% or more reduction in gross revenue in 2020 over 2019.
- The bill funds many the government along with many other programs that are not Covid-19 related for the coming year.