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Here is a summary of the new bill passed by Congress.
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Hey all,

               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.  The president is expected to sign the bill into law soon.

               Here is a summary of what we feel is most relevant to you:

  1. PPP expenses used towards forgiveness can be deducted on your business tax return. Based on prior regulation, we knew that the income was not taxable but that the expenses could not be deducted, basically then making it taxable. The bill addresses this and clarifies that you CAN deduct these expenses, therefore making the PPP forgiveness a non-taxable event.
  2. There will be another round of PPP funding totaling $284 billion with modified rules. We are still waiting on further guidance on how to take part in this process for the second round.  Stay tuned come 2021.
  3. Employer Social Security payroll tax credits under the FFCRA are extended through March of 2021.
  4. Business meals for the 2021 and 2022 tax years are 100% deductible.
  5. The Work Opportunity Tax Credit is extended for 5 years.
  6. $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.
  7. There will be stimulus checks up to $600 per individual and qualified child, again with phase-out limits, but adult dependents are not eligible.
  8. 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.

                Again, this is not all-encompassing report of the new bill.  It’s about 5,500 pages in total.  Our office plans on learning more of the specifics in the upcoming weeks.   But, if you’d like, you can visit this helpful link by Tax Foundation for now.

                We appreciate all of your patience as we all navigate through these changes resulting from 2020 crises.  Our offices will remain open with limited hours for the holiday season, but most of our staff will be out spending time with family and gearing up for what we hope to be a much better, smoother year in 2021.

Happy Holidays :-) ,

Tim


 
 
 

Tim Petrey, CPA, CGMA
Managing Partner
HD Davis CPAs,LLC
330.759.8522 ext. 103









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