COVID Relief Bill Passed

Late Monday, December 21, 2020, Congress passed the COVID-Related Tax Relief Act of 2020 as part of the Consolidated Appropriations Act of 2021.  The Acts provide over $900 Billion in relief to individual taxpayers and businesses.  President Trump is expected to sign the bill into law this week.  Among the provisions are these highlights:

• A $600 stimulus check to most Americans, based on the same income limits as the one earlier this year.
• These will be treated as additional payments based on 2019/2020 income.
• First checks could come out the week of December 28.
• Extended federal unemployment benefits of $300 per week for 11 weeks.
• Includes gig workers
• Regular unemployment benefits will be available for 50 weeks instead of typical 26.
• COVID-related paid leave refundable tax credits were extended through March 31, 2020.
• $280 billion in new PPP loans
• Congress is making clear that expenses used to generate PPP loan forgiveness (for both 2020 loans and 2021 loans) are deductible.
• Clarification that forgiven EIDL loans are not includable in income.
• Recipients of earned income credits and child tax credits can qualify based on 2019 income if that is more favorable than 2020 income.
• Multiple tax extenders, including allowing limited above-the-line charitable deductions for non-itemizers in 2021.
• Starting in 2021, businesses will be able to deduct restaurant meals in an attempt to help restaurant owners recover.
• Support for theater operators, airlines and some other small businesses.
• Rental assistance and increased food stamp benefits.

Watch this space for more detail on these and other items.  Please contact your DWD accountant if you have questions.

Contributed By: Mark Westerhausen, CPA | Director | DWD CPAs & Advisors