Dear: Client

On Sunday, 27^th December, 2020, the Consolidated Appropriations Act, 2021 was signed into law. This Act has expanded upon the COVID-19 relief provided by the CARES Act earlier this year. The main COVID-19 relief features applicable to small businesses and individual taxpayers are outlined below:
PAYCHECK PROTECTION PROGRAM:

1. You are now able to deduct all the expenses you used PPP funds for, on your business tax return. Treasury guidance prior to this stated that businesses could not deduct PPP expenses, which would have increased business income and taxes for 2020. Now you are able to deduct all these expenses and take the full benefit of the relief funds provided to your business.
2. You do not need to deduct the EIDL Advance from the PPP forgiveness amount. This means that the EIDL Advance of up to $10,000 which your business received is additional money which you can utilize to meet business expenses. If you have already submitted your PPP forgiveness application, your bank should automatically adjust it for this amount. Revised forms for PPP forgiveness will be released soon.
3. $284 billion has been assigned to the second round of the PPP. The Paycheck Protection Program has expanded to allow certain hard-hit businesses to apply a second time for relief through the program. You qualify for the second round of PPP funding if your business has less than 300 employees, you have or will use the full amount of the first PPP loan, your gross receipts in any calendar of 2020 were 25% less than your gross receipts for the same quarter in 2019, and if you need the loan to support the ongoing operations of the business. The necessity provision means that if you are able to pay your bills without this additional help, you do not qualify for the loan. Applications are not open at the moment, since the PPP lenders are waiting for the SBA to disburse funds.
4. A new simplified form for those whose loans were under $150,000 is being drafted. Earlier this year, Form 3508S aided those businesses which had less than $50,000 in PPP funds, obtain forgiveness in an expedited manner. Now, a similar form will help those with loans of under $150,000. If your business obtained PPP funds of $50,001 to $150,000, you should wait for this form to be released before applying for forgiveness through your lender.
5. You need to keep a close eye on your bank’s PPP and PPP forgiveness webpages and emails, since each bank will have its own timeline for putting these changes into practice.

1. A new check of $600 will be sent out to all Americans whose Adjusted Gross Income for 2019 was less than $75,000. A check of $1200 will be sent to married couples whose AGI for 2019 was less than $150,000. An additional $600 will be provided for each dependent child.
2. These payments are supposed to be a credit for your 2020 tax return. If for some reason you do not receive the checks despite qualifying for them, you will be able to reduce your taxes for 2020 or obtain a larger refund when you file your return.
3. If your 2020 income is higher than your 2019 income and you receive the check when you should not have qualified, you do not need to return the money.

1. Unemployment benefits with additional federal coverage have been extended to March 14, 2021.
2. The total number of weeks for which unemployment benefits can be provided to an individual are 50 weeks, up from 39 earlier.
3. The additional federal amount for unemployment benefits will be $300 per individual per week.

COVID-19 SICK LEAVE, FAMILY LEAVE AND CHILD CARE LEAVE BENEFITS
Employers can now receive the federal tax credit for allowing employees to take unused FFCRA paid sick and family leave through March 31, 2021. The limits for maximum hours still apply. Any unused balances for these federal-mandated leaves will roll over to 2021 and continue until March 31^st.

CHARITABLE CONTRIBUTIONS

Individuals can donate 100% of their Adjusted Gross Income to charity in 2020 and 2021, even tax-exempt private foundations. IRA owners over the age of 59.5 can transfer unlimited amounts to charity from their IRAs. Non-itemizers can donate up to $300 per individual to charity.

As always, we are here to assist you with questions and concerns, so please feel free to contact us at any time. Thank you for your business - we appreciate it very much.