Changes from New Pandemic Relief Bill
The $900 billion pandemic relief that passed Congress in December was a compromise measure aimed at improving economic recovery. Some of its most important features are as follows:
- The Bill provides $600.00 stimulus payments for individuals making up to $75,000.00 per year and $1,200.00 for married couples making up to $150,000.00 per year, as well as a $600.00 payment for each child dependent.
- Federal unemployment insurance benefits for COVID-19 will be extended to March 14, 2021, with a $300.00 supplement payment each week, similar to the extra $600.00 supplement that expired last July. The Emergency Unemployment Compensation that provided up to 13 additional weeks of jobless benefits was extended as well.
- Business expenses paid for with forgiven PPP loans are deductible, in addition to the forgiveness being non-taxable income.
- Businesses are eligible for a second round of funding if they have 300 or fewer employees and can prove they experienced a 25% drop in revenue during one quarter of 2020 compared to the previous year.
- There is a continuation and expansion of the Employee Retention Credit. This allows PPP loan recipients to use the credit, increases the credit from 50% to 70% of qualified wages, with the cap on credit increased to $28,000.00.
The business must experience more than a 20% reduction in gross receipts when comparing a calendar quarter to the same quarter in 2019, or from the immediately preceding quarter.
- There is an extension of refundable payroll tax credits for paid sick leave and family leave, through March 31, 2021. The mandated paid sick leave and family and medical leave ended on December 31, 2020, but employers may voluntarily provide the paid leave and take the tax credit associated with the leave taken through March 31, 2021.
This is part of our February 2021 Newsletter.
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