Concerned How The Recent CARES Act Legislation Will Effect Your Business? Continue Reading…
After months of negotiations in Washington, an agreement has been struck on a new aid package to address the ongoing fallout from the COVID-19 pandemic. The legislation has been passed by the U.S. House of Representatives and the U.S. Senate. President Donald J. Trump has signed the bill as well.
Included in the nearly 5,600-page Consolidated Appropriations Act of 2021, the package expands and extends several critical provisions of the CARES Act enacted in the spring of 2020 to deal with the emerging financial and health care crisis. The final bill includes neither the funding for state and local governments that Democrats sought nor the corporate liability protection from COVID-19-related lawsuits that Republicans favored.
Here’s a broad overview of some of the provisions that may affect you:
Key Provisions For Businesses And Employers
- Business expenses paid with forgiven PPP loans are tax-deductible. The bill clarifies that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided;”
- New funding for first-time and so-called “second draw” forgivable loans to eligible businesses under the Paycheck Protection Program (PPP), with dedicated set-asides for very small businesses and lending through community-based financial institutions;
- Expanded PPP-eligible expenses (for example, certain operating expenses, property damage costs, supplier costs and worker protection expenses);
- Expanded PPP eligibility for nonprofits, local newspapers, and TV and radio broadcasters;
- Clarification of tax treatment for other financial assistance under COVID-19 legislation;
- New targeted Economic Injury Disaster Loan grants from the Small Business Administration (SBA) for businesses in low-income communities;
- Continued SBA debt relief payments;
- Dedicated funding for live venues, independent movie theaters and cultural institutions;
- An extended and expanded retention tax credit for eligible employers that continue to pay employee wages during COVID-19 closures or after experiencing reduced revenue;
- Extended tax credits for paid sick and family leave;
- Extended mandatory paid sick and family leave for qualifying COVID-19-related reasons;
- 100% business meals tax deduction for 2021 and 2022 for food purchased from restaurants;
- Aid to farmers and ranchers;
- Enhanced Low Income Housing Tax Credit;
- Extended repayment period for deferred payroll taxes; and
- Extended Work Opportunity Tax Credit, New Markets Tax Credit and Empowerment Zone tax incentives.
Additional Details To Come
This is just a quick look at the latest COVID-19 aid package. TRP Sumner will continue to monitor and communicate the provisions most likely to affect you or your business in the near future. We encourage you to contact us with any questions or concerns regarding these new tax provisions affecting you and your business. We can be reached at one of our three locations in Fayetteville and Dunn, NC. Please visit our website at www.trpsumner.com for more information. We’re here to help! Be Well.