Congress Passes Covid Relief
As we reported ir our previous post, both chambers of Congress voted to pass the latest COVID relief legislation. The bill exceeds 5,500 pages and contains more tax implications than originally anticipated.
The special alert we posted previously details the latest on PPP loans (second round of loans and deductibility of business expenses), as well as a second economic impact payment of $600 for qualifying Americans and dependents. In addition to those items, highlights of the bill include:
Economic Injury Disaster Loan advance will no longer be taxable
Employee payroll tax deferral repayment extended to Dec. 31, 2021
Families First Coronavirus Response Act (FFCRA) credit extended through March 31, 2021
Allowance for taxpayer to claim employee retention credit (ERC) and receive a PPP loan
Business meals 100% deductible for 2021 and 2022
Increase from $300 to $600 for married couple filing jointly above-the-line charitable contribution for 2020 and 2021
Lookback to 2019 for eligibility of the earned income tax credit and portion of child tax credit for 2020
Flexible savings account (FSA) balances can be rolled into 2021
Permanent extension of the 7.5% floor for unreimbursed medical expenses
Permanent extension of energy efficient improvements to nonresidential rental
Increased income phaseout thresholds on the lifetime learning credit will replace the qualified tuition expenses deduction that expires at the end of 2020
Work opportunity credit extended to 2025
Additional details on these provisions, as well as others, will be included in our tax act summary, if the president signs the bill into law.
The president has until midnight Monday, Dec. 28, to sign the relief bill that is attached to an omnibus spending package needed to keep the government open. However, late Tuesday, the president tweeted his dismay for the bill – specifically the amount of the economic impact payment.
We know that more guidance will be provided as this rolls out, so STAY TUNED‼️