Key Provisions of the New COVID-19 Relief Bill
Both chambers of Congress overwhelmingly passed a new $900 billion COVID-19 relief bill on Monday night. In addition to funding the federal government through September 2021, the legislation includes several provisions that will affect both individuals and businesses. Here are some of the highlights:
Businesses:
The bill provides for $325 billion in aid for small businesses dealing with pandemic-related economic hardships. Most of this money will be allocated for additional Paycheck Protection Program (PPP) loans, while a smaller portion will go toward Economic Injury Disaster Loan (EIDL) Grants to businesses in low-income communities.
The bill specifies that otherwise deductible business expenses paid with forgiven PPP loans are tax-deductible. This overrides recent IRS guidance that had indicated these expenses could not be deducted. This provision affirms the position of the AICPA and scores of other business groups who argued that Congress intended for these expenses to be deductible when they passed the first round of PPP funding in the CARES Act.
The bill also extends the employee retention tax credit and temporarily allows a 100% business expense deduction for meals provided by restaurants during 2021 and 2022. The current rules limit business meals to 50%.
Individuals:
The bill sets aside $166 billion for direct stimulus payments of $600 for individuals making up to $75,000 per year and $1,200 for married couples making up to $150,000 per year; and a $600 payment for each dependent child.
The bill includes $120 billion to provide $300 in weekly supplemental unemployment benefits through mid-March 2021, including extending the expansion of unemployment benefits to the self-employed, gig workers, and others in nontraditional employment.
The bill extends the nationwide moratorium on evictions through January 2021 and sets aside $25 billion for emergency rental assistance.
The bill extends the $300 above-the-line charitable contribution deduction for individuals who do not itemize through 2021.
Tax rules are complex and constantly changing. Schreiber Accounting and Advisory can help you lawfully minimize your tax liability with comprehensive tax compliance and tax planning services. Contact the firm for more information.
Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.