COVID Relief Package – What’s In and What’s Out
The US has been waiting for another COVID relief package and finally, we have one. The bill is massive, logging over 5,000 pages and $900 billion in pandemic relief. While I must admit I did not read the whole thing, I have the SparkNotes for you. Let’s take a look at what made it into the bill and what did not.
Paycheck Protection Program – the bill expands the PPP loan program to allow some businesses to receive an additional loan if they can show significant revenue decreases between 2020 and 2019. Loan forgiveness simplification was also expanded to loans of $150,000 or less. Also, PPP loan-related expenses will be tax deductible. Read that again, TAX DEDUCTIBLE. This is a huge win for businesses that need additional support this year. For new PPP loans, the bill expands how the PPP loan funds can be used, now including software expenses and worker protection costs.
Meals and Entertainment Tax Deduction – the bill allows for a 100% tax deduction for “restaurant” meals for 2021 and 2022. This is increased from the typical 50% meals tax deduction. We hope this is a big boost for the struggling hospitality industry.
Expansion of the Charitable Contributions Deduction – the CARES Act allowed a $300 deduction for charitable giving for those who do not itemize deductions in 2020. This bill increases the deduction to $600 for a married couple filing jointly in 2021.
Stimulus Checks – the bill will provide $600 per person stimulus checks for those with income under $75,000 or $150,000 if married filing jointly.
Unemployment Assistance – the bill extends the pandemic unemployment insurance programs and extends the federal supplement unemployment insurance benefits. The extended benefits are $300 per week, a decrease from $600 per week given by the CARES Act.
Tax Credits – the bill extends and improves the employee retention credit. It also allows individuals to calculate their Earned Income Tax Credit and Child Tax Credits on 2019 income amounts, potentially allowing for higher credits in 2020 for those whose incomes have decreased due to COVID.
Government Funding – the bill includes funding for health care and vaccine development, the airline industry, transportation industries, education, the Post Office, food assistance, and more.
Student Loan Extensions – the bill extends the federal student loan forbearance provisions.
Rental Assistance – the bill extends the eviction moratorium through January 21, 2021.
State and local funding
CARES Act corrections and clarifications on stimulus checks
Forbes has a ton of great articles on the new bill – a few links are provided below:
General Info: https://www.forbes.com/sites/kellyphillipserb/2020/12/20/congress-reaches-an-agreement-on-a-relief-package-including-new-stimulus-checks/?ss=taxes&sh=41ac7352c5e6
Reach out to us with any questions you may have.