As an extension of the CARES Act, weekly unemployment benefits have been extended through Sept. 6, 2021, with a weekly amount of $300.
The first $10,200 ($20,400 if MFJ) of unemployment benefits for 2020 will be nontaxable for taxpayers with adjusted gross income of less than $150,000. If adjusted gross income is $150,000 or greater, the full $10,200 or $20,400 of unemployment compensation becomes taxable.
Reduces premiums payable by providing premium assistance from April 1, 2021, through Sept. 30, 2021. Federal subsidy coverage for COBRA premiums increases to 100%. If required to notify a group health plan, failure to do so may result in $250 penalty for each failure.
2021 recovery rebates for individuals (Stimulus)
A 2021 advance recovery rebate or a third economic impact payment (EIP3) of $1,400 ($2,800 MFJ) will be issued to each eligible individual plus $1,400 to each dependent (including adult dependents).
You will not receive the payment if your income reaches $80,000 for single filers, $120,000 for heads of household with one child, and $160,000 for joint filers or surviving spouse.
An eligible individual is anyone except: Any nonresident alien individual, Any individual who is a dependent of another taxpayer at the beginning of the calendar year, An estate or trust.
The recovery rebate credit is based on the 2019 or 2020 tax return and will be reconciled on the 2021 tax return.
For payments based on the 2019 return, the bill contains a provision that allows for an additional payment if the advance of the recovery rebate is greater based on the taxpayer’s 2020 return. We do not have information on the advancement at this time.
Child tax credit for 2021 tax year.
Expansion of the credit from $2,000 to $3,000 per eligible child under age 18 ($3,600 per child under age 6). The fully refundable credit, with 50% of the credit issued as advance periodic payments starting in July, will be reconciled on the 2021 tax return. For 2021, the amount goes down at $75,000 ($150,000 for MFJ and SS and $112,500 for head of household). Once the increased credit amount is reduced, the credit plateaus at $2,000, and the phaseout begins at $200,000 ($400,000 for MFJ).
Bookkeeping Plus is still available to assist with your tax return needs. For the health of you and others, we are taking new measures to help keep everyone safe. We now provide appointment options instead of coming into the office. This includes appointments via conference call, video conference or email to reduce office traffic. To protect your confidential information, we will utilize our secure online portal to send and receive tax documents. Reach out to our office for assistance.
This form is to be completed by the authorized representative of the applicant and submitted to your SBA participating lender. Submission of the requested information is required to make a determination regarding eligibility for financial assistance. Failure to submit the information would affect that determination.
Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave
New updates are being made as federal and state governments respond to the impact of the COVID-19 virus. We will add links as they become available.
IRS-2020-57 states that the Treasury, IRS and Department of Labor have announced a plan to implement Coronavirus-related paid leave for workers. The announcement also includes information regarding tax credits for small and midsize businesses to help recover the costs of the leave plan.
Payments for deceased parties are to be returned to IRS. Click on link below with reference to FAQ's #10 and #41 with details on what to do.
Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave.
As of Tuesday December 22, 2020, both the House and the Senate have passed legislation providing tax relief to both individuals and businesses. The bill is now awaiting the President’s signature for enactment. Following is a brief summary of the various tax provisions. Until signed by the President, it is not yet law. The bill also provides relief for community development, transportation, vaccine and community health support, schools, rental assistance, child care and other miscellaneous provisions. Join NSTP on Wednesday, January 6, 2021 during a special Town Hall Meeting at 4:30 pm EST to dive deeper into the tax provisions of the Act. Stimulus Payments - Up to $600 for individuals and $1,200 for a married couple filing jointly, plus $600 for each dependent under the age of 17. AGI phaseout starts at $75,000 for a single taxpayer and $150,000 for a married couple. Those taxpayers who have a Social Security number and file jointly with a person who uses an ITIN will be issued the stimulus payment, however, not the person with the ITIN.Payment Protection Program (PPP) Loans - for those who have not yet applied for forgiveness:
Second round of PPP Loans (§7(a)(37) of the Small Business Act) – expands the program and some business may be eligible for both PPP loans:
Forgiveness of the PPP Loans – deductions are now allowed for expenses paid with the proceeds of a forgiven PPP loan which is retroactive to the date of enactment of the CARES Act. Employee Payroll Tax Deferral – the repayment period for those employees who deferred the payment of the 6.2% Social Security tax has been extended to December 31, 2021 (from the original due date of April 30, 2021).Families First Coronavirus Response Act (FFCRA) – the provisions of the FFCRA, due to expire on December 31, 2020, have been extended through March 31, 2021 for both the paid sick leave and paid family leave provisions of the Act. Unemployment Insurance Benefits – an additional $300 per week for all workers receiving unemployment benefits has been included through March 14, 2021 and includes self-employed persons. Employee Retention Credit – the following changes have been added:
Business Meals Deduction – Section 274(n)(2) has been modified to allow for a 100% deduction of business meals purchased in both 2021 and 2022.Charitable Donations – extends several provisions of the CARES Act:
Lookback provisions for EITC and CTC - allows those eligible for the refundable credits to use their earned income from 2019 for those whose income dropped in 2020. This would allow for a larger refund that is consistent with their earnings from prior tax filings. Extenders –