COVID-19 NEWSLETTER: Expansion into 2021

COVID-19 NEWSLETTER: Expansion into 2021

Details of COVID relief and legislation expansion into 2021 have been released. 

HERE you can view a Summary of Small Business Relief from the Consolidated Appropriates Act.  

HIGHLIGHTS

FFCRA Leave included: Extension of credits for paid sick and family leave. The provision extends the refundable payroll tax credits for paid sick and family leave, enacted in the Families First Coronavirus Response Act, through the end of March 2021. It also modifies the tax credits so that they apply as if the corresponding employer mandates were extended through the end of March 2021. This provision is effective as if included in FFCRA.

Payroll Tax Deferral Repayment: On August 8, 2020, the President of the United States issued a memorandum to allow employers to defer withholding employees’ share of social security taxes or the railroad retirement tax equivalent from September 1, 2020 through December 31, 2020, and required employers to increase withholding and pay the deferred amounts ratably from wages and compensation paid between January 1, 2021 and April 31, 2021. Repayment deadline is extended to December 31, 2021.

6 month expansion of Employee Retention Tax Credit: Up to $10,000 per employee per quarter, Increases the credit rate from 50 percent to 70 percent of qualified wages; Expands eligibility for the credit by reducing the required year-over-year gross receipts to 20% from 50%; Eligible for business with up to 500 employees; and will allow new employers who were not in existence for all or part of 2019 to be able to claim the credit.

PPP 2nd Loan: Creates a second loan from the Paycheck Protection Program, for smaller and harder-hit businesses, with a maximum amount of $2 million for businesses under 300 people with a 25% loss in revenue.

PPP Tax Treatment: Business expenses can be deducted for PPP paid expenses (IRS double-dip fix).

PPP Simplified Forgiveness: New 1 page summary of the loan to be forgiven if under $150,000.

EIDL Reduction: PPP forgiveness is not reduced by the amount of an EIDL payment reduction.

Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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