BHBM Tax Law Alert | COVID Relief Bill Receives Congressional Approval
WELCOME
Thank you for subscribing to our firm’s Tax Law Alert. If you have any questions pertaining to this information, please contact our tax law group.
FEDERAL UPDATE
COVID Relief Bill Receives Congressional Approval
On Monday, December 21, Congress voted to approve a $900 billion COVID relief package that promises to expedite vaccine distribution and deliver financial assistance to small businesses, individuals and health care workers.
The stimulus package is set to include direct payments of up to $600 per adult, enhanced unemployment benefits of $300 per week for 11 weeks (through March 14), roughly $284 billion in Paycheck Protection Program loans, $25 billion in rental assistance, and an extension of the eviction moratorium.
Key Provisions of the Consolidated Appropriations Act, 2021:
- Individual adults with adjusted gross income on their 2019 tax returns of up to $75,000 a year would receive a $600 payment, heads of household making up to $112,500 and a couple (or someone whose spouse died in 2020) earning up to $150,000 a year would get $1,200. People with incomes just above these levels would receive a partial payment that declines by $5 for every $100 in income. Individuals making more than $99,000 and couples earning more than $198,000 would be ineligible.
- Individuals with dependent children would also receive $600 per child.
- For those making above the eligible income level in 2019, but less in 2020, there would be a way for you to claim this money in the form of a refundable tax credit on your 2020 tax return.
- Payroll tax payments would be deferred throughout 2021.
- Unused 2020 flexible spending account (FSA) money could be carried over to 2021. The same would apply to unused 2021 money that you wish to carry over into 2022.
- The legislation would (1) ensure tax deductibility for business expenses paid with forgiven Paycheck Protection Program (PPP) loans, (2) provide fresh PPP funding, (3) make Sec. 501(c)(6) not-for-profit organizations eligible for loans for the first time, and (4) offer businesses facing severe revenue reductions the opportunity to apply for a second loan.
- The employee retention tax credit for businesses that keep workers on their payroll would be extended.
- The agreement would extend a moratorium on renter evictions through Jan. 31, 2021.
This bill is pending presidential approval and is subject to change.
If you have any questions regarding how this stimulus package might affect you and/or your business, please contact our tax law group.
To visit our COVID-19 Business Resource Center, including our previous Tax Law Alerts, click here.
If you would like to receive BHBM Email Tax Alerts to stay informed on the latest changes in tax law, subscribe here.
The information contained within this newsletter does not constitute legal advice and is not intended to create an attorney-client relationship. You should consult an attorney for individual advice regarding your own particular situation.
