What the New COVID Relief Bill Means for Businesses

YOUNGSTOWN, Ohio – In addition to a new round of funding for the Paycheck Protection Program and stimulus payments, the Consolidated Appropriations Act passed in late December includes other benefits for businesses.

The 5,500-page legislation includes clarification of how PPP loans will be taxed and offered assistance for loan forgiveness. 

It extended the payroll tax credits for paid leave created by the Families First Coronavirus Response Act – providing up to 80 hours of paid sick leave, 80 hours of paid sick leave at two-thirds the regular rate and 10 weeks of family and medical leave at two-thirds the regular rate – through the end of March. More details on the credit are available on the IRS website HERE

Also among the tax implications is the extension and expansion of credits for retaining employees (more details HERE), as laid out in the Cares Act, through June. It provides eligible employers a refundable credit equal to 50% of employee compensation, minus health insurance, up to $10,000 per employee. It also allows businesses that received PPP loans to claim the credit to cover payroll expenses not covered by that loan.

Three credits – the Work Opportunity credit, New Markets credit and family medical leave credit – were extended through 2025. Business meals provided by restaurants are eligible for a 100% deduction through 2022.

On the individual level, the Consolidated Appropriations Act made permanent the reduction of the gross income floor for medical expense deduction at 7.5%, extended non itemized deductions of up to $300 – or $600 for married couples filing jointly – for cash donations to charities in 2021, and extended the exclusion for employer payments of student loans through 2025.

On Jan. 13, The Business Journal and HD Davis CPAs will host a free webinar on what’s in the Consolidated Appropriations Act and what you need to know about it. Registration for the webinar is available HERE.

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