Second Round of Relief with Good News for Small Businesses

 

Congress passed a bill approving a second round of $900 billion in coronavirus relief to be issued through mid-March of 2021.  In addition to more funds, the bill clarifies some very important key information for businesses.  The president is expected to sign the bill into law soon.

Here is a summary of the items that are most significant to your small business.

  • PPP expenses used towards forgiveness CAN be deducted on your business tax return. Based on prior regulation, the income was not taxable but the expenses could not be deducted, basically making it taxable. The bill addresses this and clarifies that you CAN deduct these expenses, therefore making the PPP forgiveness a non-taxable event.
  • There will be another round of PPP funding totaling $284 billion with modified rules. We are still waiting for further guidance on how to take part in this process. 
  • Employer Social Security payroll tax credits under the FFCRA are extended through March of 2021.
  • Business meals for the 2021 and 2022 tax years are 100% deductible.
  • The Work Opportunity Tax Credit is extended for 5 years.
  • $20 billion is allocated for additional EIDG (Economic Injury Disaster Grants) and EIDL (Economic Injury Disaster Loans), $43.5 billion for continued SBA debt relief payments, and $2 billion for enhancements to SBA lending.
  • There will be stimulus checks up to $600 per individual and qualified child, again with phase-out limits.
  • Unemployment insurance compensation benefits including the PUA (Pandemic Unemployment Assistance), FPUA (Federal Pandemic Unemployment Assistance), and PEUC (Pandemic Emergency Unemployment Compensation) will be extended by 11 weeks.

This is not all-encompassing report of the new bill, which is approximately 5,500 pages. We will learn more of the specifics in the coming weeks. In the meantime, here is a more comprehensive report about the new bill at TaxFoundation.org that provides more detailed information.

 

Contact

  • Address:DJL Accounting & Consulting Group, Inc.
    Cider Mill Professional Center, Building C-102
    1570 S Canfield Niles Road
    Youngstown, Ohio 44515 
  • Phone:330 779 0781

 

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