Congress Passes Additional Coronavirus Relief

Updated: 12/23/20

The $900 billion stimulus bill that Congress passed late last night is an important step toward providing pandemic relief aid to both businesses and individuals. The Consolidated Appropriations Act, 2021 (CAA), as its known, includes stimulus funding and additional assistance, as well as extends and expands several existing tax provisions. The CAA now makes its way to President Donald Trump, who is expected to sign it into law sometime next week.

Given how massive the stimulus bill is – it’s paired with a $1.4 trillion omnibus spending bill that funds the federal government through September – and its potential impacts on you and your business, we realize you likely have many questions and concerns. Your Rehmann team is here to help make sense of what we know now – and we’ll continue to provide insight and guidance as details and clarifications become available.

Here are some important highlights of these latest coronavirus relief measures. For more details and the latest updates, please visit our Empowered Planning page more resources.

Paycheck Protection Program (PPP) Round Two

An additional round of PPP loans will be made available to eligible businesses with 300 or fewer employees that can demonstrate a 25% reduction in gross receipts for any one quarter. The bill also expands the list of expenses eligible for forgiveness.

Paycheck Protection Program (PPP) Expense Tax Deductibility

Expenses paid with forgiven PPP loan proceeds would be fully deductible. This includes past forgiven PPP loans as well as any additional amounts forgiven from any subsequent PPP loans.

Employee Retention Credit Enhancements

The employee retention credit will be extended through June 30, 2021 and expanded to increase the amount of eligible qualified wages. In addition, businesses that received PPP loans will now be eligible to claim the credit.

Business Meals Fully Deductible in 2021 and 2022

All business expenses for food or beverages provided by a restaurant that are paid or incurred between Jan. 1, 2021 and Dec. 31, 2022 will be fully deductible.

Direct Payments to Individuals

Eligible individuals will receive $600 in direct payments and $600 per eligible child. The payments will begin to phase out once a taxpayer’s modified adjusted gross income exceeds $75,000 for single filers or $150,000 for joint filers.

Unemployment Assistance

Federal unemployment insurance benefits will be extended through March 14, 2021 and include an additional $300 weekly federal supplement.

Tax Extenders

Several tax provisions were either extended or made permanent including the Work Opportunity Tax Credit, the deduction for certain energy-efficient commercial property, look-thru rules for related controlled foreign corporations and various energy credits.

FFCRA Paid Leave and Related Tax Credits

Emergency paid sick leave and emergency paid family and medical leave requirements under the Families First Coronavirus Response Act (FFCRA) were not extended under the CAA past the original Dec. 31, 2020, expiration date. However, Congress extended employers’ ability to use the FFCRA tax credit until March 31, 2021, if employers voluntarily continue to provide FFCRA paid leave benefits to their employees. The CAA does not expand the amount of leave available to employees under the FFCRA  which prohibits employers from claiming the tax credit for employees who have already used all of their FFCRA leave entitlement. 

Rehmann is focused on providing practical guidance and insights to help empower organizations and individuals as we navigate through the uncertainty and complexity of this pandemic, together. For the latest updates and insight, please visit our Empowered Planning resources page on our website. Please click here to subscribe to our communications to ensure you remain up to date during these uncertain times.

Published in COVID-19

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