On December 27, 2020, Congress signed the Consolidated Appropriations Act for 2021. This new law provides a range of benefits to individuals and businesses who have been adversely affected by the coronavirus pandemic. The bill also outlines the intending funding to operate all areas of the government for the next fiscal year.
We’ve highlighted some of the key changes:
Individuals
- A second round of economic impact payments (stimulus payments) of $600.00 per individual.
- Payments begin to be phased out at $75,000 and $150,000 of adjusted gross income for single and joint filers respectively.
- Deductible teacher expenses now include PPE (personal protection equipment) and other supplies used to prevent the spread of Covid 19.
- Enhancement of the charitable contribution deduction has been extended through December 31, 2021, from December 31, 2020.
- Supplemental unemployment compensation of an additional $300 per week through March 14, 2021.
- Increase in the length of the unemployment benefit period to 50 weeks from 39 weeks.
- Medical deduction at a 7.5% adjusted gross income floor made permanent.
- Credit for non-business energy property extended through December 31, 2021.
Businesses
- Extension of employer’s payback of employee’s deferred payroll taxes to December 31, 2021, from April 30, 2021.
- Extension of paid sick and family leave credit from December 31, 2020, to March 31, 2021.
- Extension of employee retention credit from December 31, 2020, to June 30, 2021.
- Full deductibility of meals for the years ending December 31, 2021, and 2022.
- Clarification that expenses paid from PPP (paycheck protection program) funds are deductible while the forgiveness of the loan is not taxable.
- The second round of PPP funds will be made available, key points are:
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- Applicant must have a 25% decrease in gross revenue in the 2020 quarter compared to the same quarter in 2019
- Increased funding available to the hotel and restaurant industry
- $2 million maximum loan amount
- Expansion of the type of expenses that can be paid from PPP funds
- Simplified forgiveness process for loans under $150,000
- $25 billion for emergency rental assistance
Our team can help you or your business leverage the resources available in the wake of the coronavirus. For questions regarding the Appropriations Act, coronavirus relief, or to simply begin the process of tax preparation, contact us today at info@thehechtmangroup.com or call us at (847) 256-3100.